KATIK RAM KURREY, BILASPUR,BILASPUR V. .INCOME TAX OFFICER, WARD-2(1), BILASPUR, BILASPUR

ITA 221/RPR/2024

AI Insights

Katik Ram Kurrey appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the Assessing Officer's decision treating a cash deposit of Rs. 54,00,500 in his bank account as unexplained income. The Assessing Officer had initially reopened the assessment under section 147 of the Income-tax Act, 1961, due to non-filing of income tax return and unexplained cash deposits. The Tribunal dismissed the appeal, noting the assessee's failure to provide any substantial evidence or explanation regarding the source of the deposits during both the assessment and appellate proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35680 (ITAT-RAIPUR)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: YOGESH SETHIA
• Keywords: Corroborative evidences; Reopening of assessment; Principle of natural justice; Non compliance
• Section: 147; 148; 144; 142(1); 250; 271(1)(c); 68; 139; 191

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 221/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2013-14 Katik Ram Kurrey, Uslapur, Bilaspur, 495001 Chhattisgarh PAN : CWSPK4214Q .......अपीलाथȸ / Appellant बनाम / V/s. Income Tax Officer, Ward-2(1), Aaykar Bhawan, Vyapar Vihar, Bilaspur 495001 Chhattisgarh. ……Ĥ×यथȸ / Respondent Assessee by : Shri Yogesh Sethia, CA Revenue by : Dr. Priyanka Patel, Sr. DR. सुनवाई कȧ तारȣख / Date of Hearing : 28.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 09.12.2024 2 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 आदेश / ORDER PER Bench: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) u/s 250 of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.12.2023, which in turn arises from the order passed by the Assessing Officer (A.O.) under Section 144/147 of the Act, dated 15.11.2018 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal before us: “Ground No. 1: In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in deciding the appeal ex-parte without proper service of the notice as per provisions of the Act and without following the principles of natural justice. Ground No. 2: In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming action of Ld. Assessing Officer initiating proceedings w/s.147 r.w.s. 148, 149 and 151 of the Income-tax Act, 1961 without fulfilling stipulated conditions, for verification of financial transactions. Ground No.3: In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming action of Ld. Assessing Officer in not recording requisite satisfaction but concluded. escapement of income merely on the ground that the appellant has deposited Rs.54,00,500/- in bank account and it is unexplained cash deposit. Ground No.4: In the facts and circumstances of the case, the Ld. Commissioner of Income- tax (Appeals), NFAC has erred in confirming the addition of Rs.54,00,500/- as unexplained cash deposit. Ground No. 5: The impugned order is bad in law and on facts. Ground No. 6: The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice.” 3 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 2. The A.O based on information that the assessee had during the year under consideration made cash deposits of Rs.54,00,000/- in his savings bank account, but had not filed his return of income, thus, initiated proceedings u/s. 147 of the Act. Notice u/s. 148 of the Act, dated 31.08.2017 was issued by the A.O. However, the assessee failed to file any return of income in compliance to the notice issued u/s. 148 of the Act. 3. As the assessee despite repeated reminder had failed to come forth with and file his return of income in compliance to notice u/s. 148 of the Act, dated 31.08.2017, therefore, the A.O proceeded with to frame the assessment vide an ex- parte order. As the assessee had not filed any explanation as regards the source of the cash deposits of Rs.54 lacs (supra) made in his bank account, therefore, the A.O vide his order passed u/ss/.144/147 of the Act, dated 15.11.2018 held the same as unexplained cash deposit and determined his income at the same amount. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. 5. After considering the contentions of Shri Yogesh Sethia, Learned Authorized Representative (for short, Ld. AR) for the assessee, who in the backdrop of the “affidavit”, dated 05.06.2024 he had explained the reasons leading to the delay of 80 days in filing of the present appeal, we are of the view that the same had occasioned for bona-fide reasons. Accordingly, the delay involved in filing of the appeal by the assessee is condoned. 4 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 6. Apropos the addition of Rs.54,00,500/- made by the AO by treating the cash deposits of the said amount in the assessee’s bank account as having been sourced out of his un-explained sources, the Ld. AR has assailed the same. 7. Ld. AR states that as the subject cash deposits were sourced out of the sale proceeds of agricultural land which the assessee had sold during the year under consideration, thus there was no justification in treating the same as unexplained cash deposits as was so done by the AO and sustained by the Ld. CIT(A). However, the Ld. AR failed to substantiate his claim by placing on record a copy of the sale deed/agreement or any material which would support the same. 8. Dr. Priyanka Patel, Learned Senior Departmental Representative (for short, Ld. SR.DR) has supported the orders of the lower authorities. 9. We have heard the learned authorized representatives of both the parties, perused the orders passed by the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. AR. 10. We have thoughtfully considered the contentions advanced by the Ld. AR and find no substance in the same. 11. At the threshold, we may herein observe, that though it is the claim of the assessee that the cash deposits in question were sourced out of the sale proceeds of the agricultural land which the assessee had sold during the year under consideration but no copy of any sale deed/agreement had been placed on record 5 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 to substantiate the same. As it is discernible from the record that the assessee had failed to participate in the proceedings before the AO, therefore, the latter was constrained to frame the assessment vide an ex-parte order passed u/s 144 r.w.s. 147 of the Act, dated 15.11.2018, wherein, after treating the cash deposits of Rs. 54 lacs (approx.) as having been sourced out of unexplained sources, he had determined the income of the assessee at the said amount. 12. On appeal, we find that the assessee despite having been afforded six opportunities, had except for seeking adjournment on one day i.e. on 04.08.2022, had on the earlier occasions and thereafter not put any appearance/participated in the proceedings before the CIT(Appeals). Accordingly, Ld. CIT(A) in absence of any material on record found favour with the view taken by the AO, and dismissed the appeal. For the sake of clarity, the observations made by the CIT(A) are culled out as under: “Discussion and Decision 10. In Ground of appeal Nos.1, 2 and 4 the appellant has objected to the re-opening of assessment u/s.147 of the Act by issuing notice u/s.148 without recording requisite satisfaction, being bad in law and without jurisdiction. The relevant excerpt of the assessment order is produced as under: \"In the instant case, the information available in ITD/ITBA/AIMS application systems relevant to financial year 2012-13, as per AIR information, the assessee has deposited cash of Rs. 54,00„500/- in his Indian Bank saving bank account. 2. A system generated letter for non-filing of Income-tax Return for Assessment year 2013-14 has been issued to the assessee. In response to the notice the assessee has submitted online response as \"No taxable income, agriculture income and sale of agricultural land. Not taxable.\" However, neither return of income for assessment year 2013-14 has been filed nor any supporting 6 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 evidences of his claim have been submitted by the assessee. It clearly indicates that the assessee failed to comply. Therefore, it is held that the assessee has actually no explanation to offer in respect of his source of the said cash deposits in saving bank account. 3. This case was reopened u/s. 147 of the Income Tax Act, 1961 after recording the reasons and notice u/s. 148 of the Income-tax act, 1961 was issued on 31/08/2017 after obtaining necessary approval from JCIT, Range-2, Bilaspur and duly served to the assessee. In response to the notice u/s. 148 of the Income-tax Act. 1961, no return of income has been filed by the assessee till date. 4. Further letters/notices have been issued on 16.05.2018, 12.06.2017, 10.07.2018 & 07.08.2018 to file the Income-tax return in response of Notice u/s. 148 of Income-tax 1961, which was issued on 31.08.2017, but no response has been received. 10.1 I have carefully considered the facts and circumstances of the case. In the absence of appellant's reply to hearing notices u/s. 250 of the Income-tax Act, 1961 the appellant's grounds of appeal and other Statement of facts are perused as made available on ITBA portal/Form 35 etc. Further other details on ITBA involving assessment order u/s. 144 of the I.T. Act dated 15.11.2018 against which this appeal is filed, is carefully perused. On perusal of these facts apparently the appellant is contending that, being a farmer having income from agriculture operations he is not required to file any return of income as his total income for this A.Y. is much below the maximum amount not chargeable to tax. Further, contended that, however the A.O had initiated 148 proceedings as per the information with AO as obtained from annual information reporting (AIR) filings available with the I.T. Department. Appellant also contends that the notices were not served resulting in non-compliance and ultimately finalization of assessment exparte. The appellant also stated that the fact of the matter is that the said notices were never served on the appellant and substantiates that the appellant has no information about referred assessment proceedings and accordingly he could not make compliance. Accordingly, the appellant holds to the ground that the AO has erred in initiating re assessment proceedings u/s. 147 of the I.T.Act. Keeping in view these contentions/objections of the appellant, it is noteworthy from the bare facts as available on record/emanating from A.Os assessment order u/s. 144/147 dated 15.11.2018. This order as extracted above clearly show visible facts of the case as different from the objections of the appellant. 10.2 I do not concur with the submission of the appellant as the notice under sec. 148 has been issued after duly recording the 7 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 reasons for escapement of assessment. As noted by the AO, the notice under sec. 148 of the Act issued on 31.08.2017 has duly been served upon the assessee as also further, letters/notices under sec. 142(1) of the Act issued on 16.05.2018, 12.06.2017, 10.07.2018 and 17.08.2018. Finally, notice under sec. 142(1) of the Act was also issued on 12.10.2018 as a final show cause notice. All the notices were served on the appellant. The cash deposits in the appellant's bank account maintained with Indian bank, Branch Bilaspur (C.G.), remained unexplained as apart from merely holding to the view that the cash deposited related to sale of agricultural land, no proof /evidences were submitted by appellant. Thus the contention that the appellant was not aware of the assessment proceedings does not hold good. The ex-parte assessment has been made after following the due procedure in accordance with law after allowing adequate opportunity to the appellant. 10.3 It is very important to mention that with advent of statutory mandated e-filing of returns/forms, e-communications, e- assessment and appeal process through faceless mode, the assessees have been mandated by the Department to provide their correct digital contact details to enable near instantaneous, 24 x 7, 365 day global outreach. To ensure such direct 24 x 7, 365 days global access between the assessee and the Department, the Department had enabled in the profile page of the e-filing account for every assessee, to provide its Primary email id and Primary mobile number. In addition to this, if an assessee desires to also include communication to be sent to its Authorized Representative or any other contact, a facility to provide the secondary email and mobile number with relationship identified has been enabled. All communication by the Department is legally mandated using these contact details provided by the assessee. The assesses are duty bound to ensure they correctly comply accordingly. Additionally, a copy of every statutory communication sent to the assessee are placed in the e-filing account of the assessee, so that assessee at its leisure can access and comply with such communication 24 x 7, 365 days from across the globe. 10.4 In recent judgement by ITAT C Bench Chennai, in case of M/s K.S. M agencies Vs ITO -ward (2) Thanjavur dated 5.06.2023 has supported this view that its assessee's duty to mention correct contact particulars including email-id. Therefore, the ground relating to legality of the assessment is rejected. Thus Ground Nos. 1, 2 and 4 are dismissed. 11. Ground No.3 is against the addition of cash deposit of Rs.54,00,500/-.As noted earlier that notice u/s 142(1) of the Act was issued to the appellant, however, the appellant failed to furnish return provided under the Act. Further, the appellant was 8 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 given sufficient opportunities in the form of issue and service of Notices u/s148/142(1) show cause notice etc., of the Act whereas the appellant failed to furnish the details called for necessary for completing the assessment. Therefore, the assessment was completed u/s 144 of the Act. The AO had specific information that the appellant had deposited cash amounting to Rs. 54,00,500/- in his bank account maintained with Indian Bank. The relevant excerpt of the assessment order is produced as under: \"5. The reason for reopening of case was to verify the financial transactions that have been received through AIR. During the year under consideration, the assessee has deposited cash of Rs 54,00,500/- in Indian Bank, Branch- Bilaspur (CG) during the F.Y:2012-13 (i.e. Assessment year 2013-14) Cash deposit by the assessee has not been disclosed as the assessee has not filed his income tax return for the A.Y. 2013-14 and is treated as escaped income. 6. Regarding this issue and information available in record is insufficient to verify the true affairs of his income earning activities and sources of cash deposits. The notices/letter were issued and served to the assessee and was asked to file return of income alongwith supporting evidences for proper assessment of his income. The undersigned has given proper opportunity for fair estimation of his income but the assessee failed to file the return of income and provide other documents. 7. Further, vide this office letter dated 12/10/2018, it was made categorically clear that \"notice u/s. 148 of the Income-tax Act, 1961 dated 31/08/2017 for the A.Y. 2013-14 to file Income-tax Return against notice u/s. 148 of the I.T.Act, 1961 dated 31/08/2017 for the A.Y. 2013-14 to file Income-tax Return against notice u/s. 148 of the I.T.Act, 1961 within 30 days from the receipt of Notice. But till date you have not filed Income tax return in response to notice u/s. 148 of the I.T.Act, 1961. Thereafter reminders were issued to you on 16/5/2018, 12/06/2018, 10/7/2018 and 07/08/2018, but you have not complied till today. Hence, I propose following addition for the A.Y. 2013-14 of your total income. \"You have deposited cash of Rs. 54,00,500/- in your Saving Bank Account of Indian Bank, Branch Bilaspur (C.G.). This is the final opportunity given to you for compliance of this notice within 7 days of receipt of this letter. If you do not comply, your case will be completed adding deposit amount of above Saving Bank Account of Rs. 54,00,500/- in your total income for the A.Y. 2013- 14 as best judgment assessment u/s. 144 of the Income-tax Act, 1961.\" 9 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 8. As the assessee failed to file his return of income, other documents and explanations which had been requested vide this office various notices dated 31.08.2017, 16.05.2018, 12.06.2017, 10.07.2018 & 07.08.2018 & 12.10.2018 to file the Income tax return in response of Notice u/s. 148 of Income Tax 1961, which was issued on 31.08.2017, but no response has been received, the undersigned has no option except to pass the order on the basis of the facts available on record u/s. 144 of the I.T.Act, 1961. 9. In the circumstances keeping in mind the status of case, the undersigned has sufficient reason to justify that income to the tune of Rs. 54,00,500/- in Indian Bank, Branch-Bilaspur(C.G) during the F.Y. 2012-13 (i.e. Assessment Year 2013-14) on account of unexplained cash deposited in saving Bank account, has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. Therefore, Rs. 54,00,500/- is hereby treated as income for the year under consideration and penalty proceedings initiated u/s 271(1)(c) are separately initiated for this concealment Penalty u/s 271(1)(b) of the Income-tax Act, 1961 is hereby initiated due to the non compliance of notice u/s 142(1) of the LT.Act, 1961 which was issued on 12.10.2018 10. Subject to the above discussion, total income of the assessee is computed as under Income as returned/assessed Rs. 54,00,500/- ------------------- Total income Rs. 54,00,500/- ------------------- Assessed income of Rs. 54,00,500/- u/s 144/147 of the I.T.Act, 1961. Charge interest u/s. 2344, 2348 and 234C of the Income-tax Act, 1961. Issue Demand notice to the assessee. Issue penalty notice u/s. 271(1)(c) & 271(1)(b) of the Income-tax Act, 1961 separately to the assessee.\" 11.1 In the instant case, the appellant had deposited cash appearing in the bank accounts stated above of Rs.54,00,500/-. The appellant has claimed that the cash was deposits out of the sale proceed of agriculture land but he failed to adduce any evidence to substantiate his version. Thus the nature and source of such deposits made in the bank accounts were not explained. The appellant is found to be the owner of the money as established from the statement obtained from the bank and the appellant didn't offer any acceptable and cogent explanation regarding the source of such money found in his bank account. As the return of 10 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 income is not filed for the year under consideration, therefore, the income earned has not been offered and taxes due are not paid. 11.2 To sum up the above, the analysis of the cash deposited in the appellant income is as under:  The appellant failed to furnish the return of income either u/s 139 or any other provision as envisaged in the Act.  The appellant deposited cash of Rs.54,00,500/- in the bank accounts maintained by the appellant.  The appellant found to be the owner of the money as established through statement received from bank.  The nature and source of the cash deposited found in the bank statement were not explained by the appellant.  The income earned by the appellant is not offered for taxation purposes and taxes due thereon are not paid.  The appellant failed to offer any explanation during assessment proceedings as well as appellate proceedings, therefore, the cash deposit appearing in the bank statement remained unexplained and thus liable to be added u/s. 68 of the Act. 11.3 The appellant failed to offer any explanation during assessment proceedings as well as appellate proceedings. The burden of proof lies on the appellant to explain the nature and source of bank deposits. Where the onus is upon the assessee to prove the fact, the assessee must place all relevant material to prove that fact whenever he is asked to furnish the same. The Hon'ble Supreme Court in the case of Calcutta Discount Co [41 ITR 191 (SC.)] has held that it is the duty of assessee to produce the books of account as well as all primary facts necessary for making the assessment at the earliest point of time. 11.4 Therefore, in the prevailing circumstances of the case, I find no infirmity in the action of the AO of addition of Rs. 54,00,500/-, Consequently, the Ground No. 3 is dismissed. 12. Through Ground No. 5 the appellant craved leave to add, alter, omit all or any of the above grounds at the time of hearing. No such option has been exercised. Hence, this ground of appeal is also dismissed. 13. Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court (Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions 11 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions made by the AO is sustained in terms of the observations herein-above. 14. In the result, the appeal of the appellant is dismissed.” 13. As the assessee in the present case had neither before the lower authorities nor before us placed on record any material which would irrefutably substantiate to the hilt that the cash deposits in question were sourced out of his explained sources, therefore, we find no reason to dislodge the addition made by the AO. 14. Resultantly, the appeal filed by the assessee being devoid and bereft of any merits is dismissed. Order pronounced in open court on day 09th December, 2024. Sd/- S Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 09th December, 2024. *#Hem/SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. The Pr. CIT, Raipur-1 (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File 12 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.221 /RPR/2024 आदेशानुसार / BY ORDER, /////True Copy // //True cop Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "