Danabhai Bharvad, Vadodara V. The Income Tax Officer, Ward-1(3)(1), Vadodara

ITA 844/AHD/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5602 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-07-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FORTHEASSESSEEATTHEOUTSETSUBMITTEDTHATTHE; FORTHEASSESSEETHATSINCETHEASSESSEEWASHAVING; FORTHEASSESSEESUBMITTED; FORTHEASSESSEERELIEDONTHE; SHRISANJAYJAIN
• Assessee Lawyers: SHRIMAYURTHAKKAR; FILINGANAPPEALBEFORELD. A ONTHEGROUNDSTHATITIS

Judgement Text

THEINCOMETAXAPPELLATETRIBUNAL AHMEDABAD“SMC”BENCH Before:ShriRamitKochar,AccountantMember DanabhaiBharvad, BlockNo.15 RajeshwarBungalow, BesidesBalajiHeights Harni Vadodara-390022 Gujarat PAN:BFBPB2754P (Appellant) v. TheIncome-tax Officer, Ward-1(3)(1), Vadodara- 390007,Gujarat (Respondent) Assesseeby:ShriMayurThakkar,Advocate Revenueby:ShriSanjayJain,Sr.D.R. Dateofhearing:10-07-2024 Dateofpronouncement:26-07-2024 आदेश/ORDER ThisappealinITANo.844/Ahd/2024forassessment year2010-11,filedbytheassesseewithIncomeTaxAppellate Tribunal,AhmedabadBench,Ahmedabad,hasarisenfrom theappellateorderdated28-02-2024passedbyld. ITANo.844/Ahd/2024 AssessmentYear2010-11 I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 2 CommissionerofIncome-tax(Appeals),NFAC,Delhiu/s.250of theIncome-taxAct,1961inDIN&OrderNo.ITBA/NFAC/S/ 250/2023-24/1061662541(1),whichappealbeforeld.CIT(A) inturnhasarisenfromtheassessmentorderdated28-11- 2017passedbytheAssessingOfficeru/s.144r.w.s.147of theIncome-taxAct1961. 2.Thegroundsofappealraisedbytheassesseeinmemoof appealfiledwithTribunal,readsasunder:- “1.TheAssessingOfficerandCommissionerAppealhaveerredin lawandinfacts,inconsideringthecashdepositasun-explained cashdeposit. 2.CommissionerAppealhasdismissedtheappealforareason thatthetaxdeterminedbyAOwasnotpaidwithoutgoingintothe meritsofthecase. 3.Ipraytoyoutoallowustoadd,editordeleteanyofthe groundofappealduringhearing.” 3.Thebrieffactsofthecasearethataspertheinformation availablewithRevenue,theassesseehasmadecashdepositof Rs.11,65,300/-inhissavingbankaccountduringtheyear underconsideration.Theassesseedidnotfiledreturnof incomefortheimpugnedassessmentu/s139.Thereasons forreopeningoftheassessmentwererecordedbytheAO,and thecaseoftheassesseewasreopenedbytheAOu/s147. Noticeu/s.148oftheActwasissuedbytheAOtothe I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 3 assessee,on25/03/2017requiringassesseetofilereturnof incomeinpursuancetonoticeu/s148.Theassesseedidnot filereturnofincomeinpursuancetonoticeissuedbytheAO u/s148.Statutorynoticesu/s142(1)wasissuedbytheAO fromtimetotimeduringthecourseofreassessment proceedings.Inresponsethereof,noneappearedonbehalfof theassesseebeforetheAO,andnosubmissionswerefiledby theassessee.TheAOalsoinvokedprovisionsofSection133(6) andcalledforthebankstatementdirectlyfromBankofIndia, SavliBranch.Therewerethreesavingbankaccounts maintainedbytheassesseewithBankofIndia,asfollows: Sr.No.BankNameBranchAccountNo. 1.BankofIndiaSamlaya,Tal.Slavi250910100004603 2.BankofIndiaSamlaya,Tal.Salvi250976310000013 3.BankofIndiaSamlaya,Tal.Savli250976210000013 3.2TheAOobservedthattheassesseehastotalcreditsof Rs.23,70,635/-intheabovethreebankaccounts,duringthe yearunderconsideration.TheAOproceededtoframebest judgmentassessmentu/s.144oftheAct,andissuedShow causenotice(SCN)totheassessee.Theassesseedidnot appearbeforetheAOnormadeanysubmissionsinthisregard. TheAOfinalisedthebestjudgmentassessmentu/s144on thebasisofmaterialavailableonrecord,andbroughttotax incomeofRs.21,20,635/-inthehandsoftheassesseebeing undisclosedincomewithrespecttocreditsintheaforesaid threebankaccountsmaintainedbytheassessee I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 4 undertheprovisionsofsection69oftheAct,vide reassessmentorderpassedbytheAOu/s28.11.2017u/s144 readwithSection147ofthe1961Act.Therewasanentryof returnedchequeofRs.2,50,000/-on09.02.2020inthebank account,whichwasnotaddedbytheAO. 4.Aggrieved,theassesseefiledfirstappealwithLd.CIT(A), whodismissedtheappealoftheassessee,videappellateorder dated28.02.2024,onthegroundthattheassesseehasnot paidadvancetaxontheassessedincome,byinvokingthe provisionofsection249(4)oftheAct.Theld.CIT(A)observed thattheassesseedidnotfilereturnofincome.TheAOhas passedassessmentorderu/s144readwithSection147.The noticeofdemandu/s156wasissuedbytheAO,callingupon assesseetodepositRs.15,57,920/-.Theassesseedidnot depositthesaiddemandinpursuanceofnoticeofdemand issuedbytheAOu/s156.Theld.CIT(A)observedthatevenat thetimeoffilingoftheappealbeforeld.CIT(A),thesaid demandremainedunpaid.TheassesseesubmittedbeforeLd. CIT(A)thattheassesseeisnotliabletopayadvancetax,as theassesseehasearningsfromagricultureincome,andthe assesseeprayedfortheadmissionofitsappeal.This contentionwasrejectedbyLd.CIT(A)onthegroundthatthe AOhasassessedtheincomeunderthehead‘incomefrom othersources’otherthan‘incomefromagriculture’.Theld. I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 5 CIT(A)dismissedtheappealoftheassesseeasnotliabletobe admittedandwasdismissedas‘infructuous’,asinviewofld. CIT(A),theassesseehasnotfiledreturnofincomeaswellnot paidanamountequaltotheamountofadvancetaxwhich waspayablebytheassessee. 5.TheassesseefiledsecondappealwiththeTribunal.The Ld.Counselfortheassesseeattheoutsetsubmittedthatthe Ld.CIT(A)hasdismissedtheappealoftheassesseeonthe groundthattheassesseehasnotdepositedadvancetax,and hencetheappealoftheassesseebeforeLd.CIT(A)isnot maintainable.ItwassubmittedbyLd.Counselforthe assessee,thattheassesseeisfarmer,andduringthe assessmentproceedingsex-partereassessmentorderwas passedbytheAO.Itwassubmittedthatnoreturnofincome wasfiledbytheassesseeonthebonafidebeliefthatthe assesseeisnothavingtaxableincomeandthereisnoliability todepositadvancetax.Itwasfurthersubmittedbyld. Counselfortheassesseethatsincetheassesseewashaving agricultureincome,noreturnofincomewasfiledu/s.139 and148oftheAct.Itwasalsosubmittedthatnoreturnof incomewasfiledfortheearlieryearalso.Theld.Counselfor theassesseesubmittedthattherewassomedelayinfilingof theappealbeforeld.CIT(A). I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 6 5.2.TheLd.Sr.DRsubmittedthattheassesseedidnotfiled anyevidenceoftheearningofagricultureincomebeforeld. CIT(A).Itwassubmittedthattheassesseedidnotfileany writtenapplicationbeforeld.CIT(A)requestingforexemption fromdepositingofadvancetaxasiscontemplatedu/s 249(4)(b). 5.3Atthispoint,theLd.Counselfortheassesseesubmitted inrejoinderthatinthestatementoffactsfiledbytheassessee beforeld.CIT(A),theasseseehasclearlystatedthatthe assesseeishavingagricultureincome.Itwassubmittedthat theassesseealsoenclosed/uploadedlandrecords7/12and 8A,evidenceofagriculturalincomeandbankstatementalong withFormNo.35filedwithld.CIT(A),whichwereadditional evidencesu/r46AofIncome-taxRules,1962(para12and 12.1ofFormno.35).Itwassubmittedthattheassesseeisan illiteratefarmer,andhetogetherwithotherfamilymembersof thefamilyowns60Vighasoffertileandcultivableagricultural landatVillagesPratpanagarandSamlaya,Tal.Salvi.The assesseealongwithhisfamilymembersisengagedin cultivationoftheaboveagriculturallandandvariouscrops likecotton,jira,castor,riceandotherfoodgrainslikewheat, jowaretc.areproduced.Inadditiontothesecrops,vegetables arealsoproduced.Theassesseewasnotawareofthe assessmentproceedingswhichweredecidedex-partebythe I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 7 AO,anditisonlywhenthebankaccountwasattachedbythe Income-taxdepartment,theassesseebecameawareofthe proceedings.TheLd.Counselfortheassesseereliedonthe decisionofITAT,SuratBenchinthecaseofDishant ChimanbhaiMangroliyav.ITO,dated30.04.2024,inITA No.217/Srt/2024dated30/04/2024. 6.Ihaveconsideredthecontentionoftheboththeparties andperusedthematerialsavailableonrecord.Ihaveobserved thatthattheassesseehasnotfileditsreturnofincome u/s.139(1)oftheAct.Thecaseoftheassesseewasreopened bytheAObasedontheinformationavailablethatthereisa cashdepositofRs.11,65,300/-inthesavingbankaccount maintainedbytheassesseewithBankofIndia.TheAO recordedreasonsforreopeningoftheassessment,andnotice wasissuedbytheAOu/s.148oftheActon25.03.2017, requiringassesseetofilereturnofincome.Theassesseedid notfileanyreturnofincomeinpursuancetonoticeissuedby theAOu/s148ofthe1961Act.TheStatutorynotices u/s.142(1)wereissuedbytheAOfromtimetotimeduringthe courseofreassessmentproceedings,buttherewasno complianceonthepartoftheassessee.TheAOinvoked powersu/s133(6)andcalledforbankstatementsdirectly fromtheBankofIndia.Thebanksuppliedtherequisitebank I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 8 statementsandtheassesseewasmaintainingthreebank accountswithBankofIndia,Samlaya,Tal.Savli,asunder: Sr.No.BankNameBranchAccountNo. 1.BankofIndiaSamlaya,Tal.Slavi250910100004603 2.BankofIndiaSamlaya,Tal.Salvi250976310000013 3.BankofIndiaSamlaya,Tal.Savli250976210000013 Thereweretotaldeposit/creditsofRs.23,70,635/-inthe aforesaidthreebankaccountsmaintainedbytheassessee. TheAOinvokedprovisionsofSection144oftheActand proceededtoframebestjudgmentassessment,andtheshow- causenotice(SCN)wasissuedbytheAOtotheassessee,but stilltherewasnoreply/responsebytheassessee.TheAO framedbestjudgmentassessmentu/s.144r.w.s147ofthe Act,whereintotalcreditsintheaforesaidthreesavingbank accountsmaintainedbytheassesseewithBankofIndia, Samlaya,Tal.Savli,tothetuneofRs.21,20,635/-were broughttotaxasundisclosedincomeoftheassessee.There wasonechequedepositedbytheassesseeinthebankaccount butreturnedunpaidbythebankofRs.2,50,000/-inthe bankaccountnumber250910100004603maintainedbythe assesseewithBankofIndia,Samlaya,Tal.Savli,whichwas notaddedbytheAOtotheincomeoftheassessee.The assesseefiledfirstappealbeforeld.CIT(A)whodismissedthe appealoftheassesseeonthegroundsthattheassesseedid notdepositedtheadvancetaxamountontheassessed I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 9 income,keepinginviewprovisionsofSection249(4)(b)ofthe Act.TheassesseehasclaimedbeforeLd.CIT(A)inthe statementoffact(SOF)filedthattheassesseeisnothaving anytaxableincomeastheassesseeisagriculturist/farmer havingearningsofincomefromagriculture.Theassessee claimedthatheisnotrequiredtofilereturnofincomeorto payincome-tax,andhencenoreturnofincomewasfiled u/s.139and148oftheAct,keepinginviewthattheassessee washavingincomefromagriculture.Theassesseehasclaimed tohaveuploaded/encloseddocumentssuchasLandRecords 7/12and8Aaswellevidenceofagriculturalincomealong withFormNo.35,asanadditionalevidencesunderRule46A ofthe1962Rules.Theassesseehaselaboratelysubmittedin SOFfiledwithFormNo.35thattheassesseealongwithhis familymembersholds60Vighasoffertileandcultivable agriculturallandatVillagePratapnagaandSamlaya,Tal.Savli. Theassesseehasstatedthatthecropsgrownbytheassessee alongwithfamilymemberswerecotton,castor,jira,riceand otherfoodgrainssuchaswheat,jowaretc.Thesecropsare soldinlocalmarketsandsalesproceedsarereceivedincash, whichstooddepositedinthebankaccountmaintainedbythe assesseewithBankofIndia.Theassesseehasalsosubmitted beforeld.CIT(A)thattheassesseeishavingonlyincomefrom agricultureandthereisnotaxliabilityoftheassesseeduring theyearundertheconsideration.Theassesseehasclaimed I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 10 thatheisilliterateandwasnotawareoftheincometax reassessmentproceedingsgoingonwiththeAOu/s147/148 inhiscase,andthatisthereasonsforhisnoncompliancesto thenoticesissuedbytheAO.Itisalsoclaimedthatnonotices aswellissuedbytheAO,werereceivedbytheassessee.Itis alsoclaimedthatonlywhentheassessee’sbankaccountwas attached,theassesseecametoknowofthereassessment framedagainsthimandtaxdemandraisedbytheAO.Itis alsoclaimedthatevenintheearlieryears,theassesseewas havingagriculturalincomeandnoreturnofincomewasfiled bytheassessee.enjoyingagricultureincome.Itistruethat theassesseedidnotfileditsreturnofincomeu/s139aswell u/s148.Thereasonsgivenbytheassesseethatbeing agriculturisthewasnothavinganytaxableincomeand/or liabilitytopayincome-tax,andtherewasnorequirementto filereturnofincomeu/s139.Bethatitmaybeasitissubject toverificationbyauthorities,but,inanycasetheassessee wasrequiredtofilereturnofincomeinpursuancetonotice u/s148issuedbytheAO.Theassesseehassubmittedthathe isanilliteratefarmer/agriculturistandhewasnotknowing aboutthereassessmentproceedings,andevennoticeswere notreceived.Itisonlywhenthebankaccountisattached,the assesseecametoknowaboutthereassessmentproceedings. Theexplanationfurnishedbytheassesseeareplausible I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 11 explanation.Allthecontentionsandclaimsmadebythe assesseerequiresverificationbytheassessee.Ifthe contentionsoftheassesseethatsincehewasonlyhaving incomefromagricultureandsomeminorinterestincomefrom bankandnoliabilitytopayincome-taxand/ortofilereturnof incomeu/s139,arefoundtobetrueandcorrect,theninmy consideredview,therewasnoliabilityontheassesseeto depositadvancetaxkeepinginviewprovisionsofSection10(1) ofthe1961Act.However,theassesseewasliabletofilereturn ofincomeinpursuancetonoticeu/s148.Thelanguageof Section249(4)(b)isclearthatwhennoreturnofincomeisfiled bythetax-payer,thentheappealcanonlybeadmittedbyld. CIT(A)onlywhenthetax-payerhaspaidanadvancetaxwhich waspayablebyhim.Section249(4)(b)issubjecttoproviso whichempowersldCIT(A)toexemptanytax-payerfromthe operationofSection249(4)(b),providedonanapplication madebythetax-payer,goodandsufficientreasonsareshown. Intheinstantcase,noreturnofincomeisfiledbythe assesseebutclaimismadethatthereisnoliabilitytopaytax andfilereturnofincomebytheassessee,inviewofthe assesseehavingonlyincomefromagricultureandsomeminor incomefrominterestfrombankaccount.Theassesseeby filingitsappealbeforeld.CIT(A)ingroundsofappealaswell StatementofFacthasclaimedthatthereisnoliabilitytopay taxand/ortofilereturnofincomeu/s139,inviewof I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 12 assesseehavingmainlyincomefromagricultureandsome minorincomefrominterestfrombank.Theassesseehas challengedanddisputedtheadditionsmadebytheAOvide reassessmentorderpassedu/s147r.w.s.147,bytreating thecashdepositedinbankaccountsasundisclosedincome. Ifthatcontentionoftheassesseeistruethen,inmy consideredview,eveniftheAOhasmadetheadditionsby treatingthesameasincomefromothersourcesotherthan incomefromagriculturalactivitieswhicharenowadisputed additionsastheverybasisofchargeabilitytotaxofanexempt incomeisraisedbytheassesseewillnotdebartheassessee byfilinganappealbeforeld.CIT(A)onthegroundsthatitis hitbySeciton249(4)(b)keepinginviewtheprovisotoSection 249(4)(b),asnoadjudicatingauthoritiesareseizedofthe mattertoadjudicateontheissueofthetaxabilityofanincome whichisclaimedtobeanexemptincomeu/s10(1),whichgot taxedowingtoanexpartebestjudgmentreassessmentorder u/s144readwithSection147.Sufficientreasonsfornon appearance/noncompliancebeforetheAObytheassessee duringreassessmentproceedings,arealsodemonstratedby theassessee.Now,Isetasidetheappellateorderpassedbyld. CIT(A)anddirecttheld.CIT(A)tomakenecessarypreliminary enquiryastotheassessee’sclaimtohavefiledadditional evidencesbeforeld.CIT(A)bywayofLandRecords7/12and 8A,evidenceofagriculturalincomeetc.,andifthat I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 13 befoundtobeprima-facietrue,thenld.CIT(A)shalladmitthe appealasgoodandreasonablecauseasarestipulatedunder provisotoSection249(4)(b)isshownbytheassesseetoseek exemptionfromdepositofadvancetax,beforefilingappeal withld.CIT(A).Theld.CIT(A)shallgivefindinginwritingon theclaimoftheassesseew.r.t.admissionofappealkeepingin viewprovisionsofSection249(4)(b)readwithprovisoto Section249(4)(b),bypassingareasonedandspeakingorder onthisissue.Iftheld.CIT(A)decidestoadmittheappealof theassesseekeepinginviewprovisionsofSection249(4)(b) readwithproviso,thentheld.CIT(A)shallproceedto adjudicatetheappealoftheassessee,onmeritsinaccordance withlaw,bypassingaspeakingandreasonedorder,keeping inviewprovisionsofSection250(6)ofthe1961Act.Theld. CIT(A)shalladmittheadditionalevidencesfiledbythe assessee,whileadjudicatingtheappealoftheassessee.Asper section250(6),theCIT(A)hastostatethepointsfor determination,decisionthereofandreasoningthereof.Iclarify thatIhavenotcommentedonthemeritsoftheissuearising intheappeal.Intheresult,theappealfiledbytheassesseeis allowedforstatisticalpurposes. 7.Intheresult,theappealoftheassesseeinITA No.844/Ahd/2024forassessmentyear2010-11isallowedfor statisticalpurposes. I.T.ANo.844/Ahd/2024A.Y.2010-11PageNo. DanabhaiBharvadv.ITO 14 8.OrderpronouncedinaccordancewithRule34(4)ofthe IncomeTaxAppellateTribunalRules,1963atAhmedabadon 26.07.2024. Sd/- (RAMITKOCHAR) ACCOUNTANTMEMBER (TrueCopy) Ahmedabad:Dated:26/07/2024 आदेशकीप्र्ि्िअगे्ेर/CopyofOrderForwardedto:- 1.Assessee 2.Revenue 3.ConcernedCIT 4.CIT(A) 5.DR,ITAT,Ahmedabad 6.Guardfile. Byorder/आदेशसे, उि/सहायकिंजीकार आयकरअिीिीयअ्िकरण, अहमदाबाद