NARENDRASINH PRAVINSINH JADEJA,VADODARA V. THE INCOME TAX OFFICER, WARD-1(2)(4), VADODARA

ITA 697/AHD/2023

AI Insights

This case involves an appeal by Narendrasinh Pravinsinh Jadeja against the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld the additions made to his income for the assessment year 2011-12. The primary issues in the appeal were the validity of the notice issued under section 148 of the Income Tax Act and the correctness of the additions made as unexplained income. The assessee argued that the reasons recorded for reopening the assessment were not signed by the Assessing Officer and that the additions were not supported by sufficient evidence. The Tribunal, however, found that all procedural requirements were met, including the digital signing of the notices and the proper recording of reasons for reopening the assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361153 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2011-2012
• Other Referred Cases: PCIT vs. Prahalad Singh, Vikas Gupta vs. UOI
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N. J. VYAS
• Assessee Lawyers: MANISH J. SHAH; RUSHIN PATEL
• Keywords: TDS; Competent authority
• Section: 147; 148; 142(1); 68; 44AD; 139; 194C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER Narendrasinh Pravinsinh Jadeja, 1, Shreenath Sanidhya, Opp. Ratnakar Duplex, Gotri, Baroda-3902021 PAN: ADJPJ0879N (Appellant) Vs The Income Tax Officer, Ward-1(2)(4), Vadodara (Respondent) Assessee by: Shri Manish J. Shah, A.R. & Shri Rushin Patel, A.R. Revenue by: Shri N.J. Vyas, Sr. D.R. Date of hearing : 19-03-2025 Date of pronouncement : 21-05-2025 आदेश/ORDER This is an appeal filed against the order dated 11-08- 2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2011-12. 2. The grounds of appeal are as under:- “1. The Learned C.I.T.(Appeals) has erred in law and on facts of the case in upholding the validity of notice issued u/s.148 of the Act. 2. The Learned C.I.T. (Appeals) erred in law and on facts of the case in sustaining the addition of Rs.26,15,149/- as unexplained. 3. The appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise.” ITA No. 697/Ahd/2023 Assessment Year 2011-12 I.T.A No. 697/Ahd/2023 Narendrasinh Pravinsinh Jadeja, A.Y. 2011-12 2 3. No return was filed by the assessee u/s. 139 of the Act. The assessee’s case was reopened after issuance of notice u/s. 148 of the Act after taking necessary approval of the competent authority. In compliance to the notice issued u/s. 148, the assessee filed return of income on 15-04-2018 declaring total income at Rs. 1,13,910/-. Notice u/s. 143(2) and 142(1) of the Act were issued on 22-06-2018 and served upon the assessee. Copy of the reasons was also supplied to the assessee. No reply was filed by the assessee. The show cause notice dated 26-10-2018 was issued and served upon the assessee on 16-11-2018. The assessee uploaded certain details such as letter dated 16-10-2017, along with cash book, profit and loss account, balance sheet, copy of bank statement etc. The Assessing Officer observed that the assessee has total receipts during the year to the tune of Rs. 28,84,211/-. Out of which the cash deposits of Rs. 14,19,857/-. In the bank book furnished by the assessee, the assessee has shown unsecured loan of Rs. 9,75,000/- on 28-09-2010. The Assessing Officer observed that no unsecured loan was shown in the return of income filed by the assessee nor any repayment is shown. The amount of Rs. 9,75,000/- was immediately debited by cheque of Rs. 4,50,000/- and Rs. 5,25,000/- on 01-10-2010 to one Mr. Vijay R. and Mahipal B. Therefore, the Assessing Officer rejected the claim of the assessee regarding unsecured loan and made addition of Rs. 26,15,149/- as unexplained income. I.T.A No. 697/Ahd/2023 Narendrasinh Pravinsinh Jadeja, A.Y. 2011-12 3 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the copy of reasons recorded and given to the assessee was not signed. The Ld. AR further submitted that as per Section 282A of the Act, the same should be signed by the Assessing Officer then only it is valid reasons. The Ld. AR relied upon the decisions of Hon’ble Punjab and Harayana High Court in case of PCIT vs. Prahalad Singh (ITA No. 91 of 2019 order dated 27.02.2020) and the decision of Hon’ble Allahabad High Court in case of Vikas Gupta vs. UOI (2022) 142 taxmann.com 253 (All.HC). Thus, the Ld. AR submitted that the reasons upon which the reopening was done are not valid as the same are not signed by the Assessing Officer. Hence, the reopening u/s 147 of the Act itself becomes bad in law. As regards the merits of the case, the Ld. AR submitted that the CIT(A) has not considered any documentary evidences filed by the assessee. The Ld. AR submitted that as per show cause notice dated 11.10.2018, the addition intended for deposit of cash was Rs. 14,90,857/- and not Rs. 28,84,211/- for which credits were available in the assessment order. By way of alternate ground, the Ld. AR submitted that the addition of Rs. 9,75,000/- is made for deposit of cheque of Rs.9,75,000/- on 28.09.2010 which was not part of the show cause notice. The Assessing Officer has not demanded anything to prove genuineness of cash credit u/s 68 of Income Tax Act, 1961. I.T.A No. 697/Ahd/2023 Narendrasinh Pravinsinh Jadeja, A.Y. 2011-12 4 Therefore, the Assessee was not aware to give the reply or submissions to that extend at the time of assessment proceedings to satisfy the Assessing Officer regarding the cash credit u/s 68 of the Act for said Rs. 9,75,000/- and therefore, the said addition needs to be deleted as being not part of the reasons recorded and show cause notice. The other alternate ground, the Ld. AR submitted was that the Assessing Officer has deducted income declared from the return of income for Rs. 1,13,912/- which was declared u/s 44AD of Income Tax Act, 1961 which means he has accepted turnover as declared by the assessee and also accepted the profits declared by the assessee from the said business, then the assessing Officer cannot make the addition by partly accepting and partly not accepting said turnover without bringing any material on record. Assumption that TDS is not deducted for labour payment is not valid ground because for every labour payment provisions of Section 194C are not applicable. The Ld. AR further submitted that how the Assessing Officer arrived at the figure of Rs. 28,84,211/- is not enumerated in assessment order. The Ld. AR submitted that there is not requirement to show acceptance of loan or repayment of loan in return of income. Thus, the Ld. AR submitted that the addition made by the Assessing Officer regarding the balance amount of Rs. 16,40,149/- (Rs.26,15,149 – Rs.9,75,000) is also not consonance with provisions of law and has to be deleted. I.T.A No. 697/Ahd/2023 Narendrasinh Pravinsinh Jadeja, A.Y. 2011-12 5 6. The Ld. DR submitted that the reasons are digitally signed and therefore, the contentions of the assessee that the reasons are not signed, does not sustain. The Notice u/s 148 of the Act as well as the orders were also signed digitally. Thus, the Ld. AR’s contention that notice issued u/s 148 is not valid and therefore, assessment order itself is bad in law, is not correct. The Ld. DR relied upon the findings of the CIT(A) as well. 7. The Ld. AR submitted that the order-sheet is also not signed and date of notice as well as timing on the digital signature is also not mentioned. 8. We have heard both the parties and perused all the relevant material available on record. At the time of hearing, the Ld. DR produced the documents related to the complete copy of reasons recorded for reopening the assessment as well as the copy of the approval accorded by the concerned authorities u/s 151 of the Income Tax Act, 1961 during the course of hearing. The order-sheet details were submitted for approval as noted in the order-sheet attached to the said documents. It is pertinent to note that the reasons were duly signed by the Assessing Officer and the show cause notice dated 11.10.2018 was signed digitally by the same Assessing Officer and the timing for the same is mentioned at the bottom of the said document/show cause notice itself. Thus, the contentions of the Ld. AR does not sustain as the relevant reasons and the subsequent show cause notice and statutory notices were rightly signed digitally by I.T.A No. 697/Ahd/2023 Narendrasinh Pravinsinh Jadeja, A.Y. 2011-12 6 the Assessing Officer. The case laws relied upon by the Ld. AR that of Hon’ble Punjab and Harayana High in case of PCIT vs. Prahalad Singh (ITA No. 91 of 2019 order dated 27.02.2020) and the decision of Hon’ble Allahabad High Court in case of Vikas Gupta vs. UOI (2022) 142 taxmann.com 253 (All.HC), both will not be applicable in the present assessee’s case as the reasons as well as the reasons were duly signed by the Assessing Officer and the show cause notice dated 11.10.2018 was signed digitally by the same Assessing Officer. Thus, the Assessment order is valid and there is no need to interfere with the findings of the CIT(A). 8.1. Now coming to the merits of the case, as per show cause notice dated 11.10.2018, the addition intended for deposit of cash was Rs. 14,90,857/- and not Rs. 28,84,211/- for which credits were available in the assessment order. At the same time during the assessment proceedings, the assessee was called upon the details of cash deposits in the bank account and the sources of such deposits. Thus, the contention of the Ld. AR that Rs. 28,84,211/- was not mentioned in the show cause notice does not sustain, as the Assessing Officer after receiving the details from the assessee has verified the amount and has taken into account the entire cash deposit in the bank account. The contention of the Ld. AR that the Assessing Officer has not demanded anything to prove genuineness of cash credit u/s 68 of Income Tax Act, 1961 is not justified once, the assessee was asked to give the source of the I.T.A No. 697/Ahd/2023 Narendrasinh Pravinsinh Jadeja, A.Y. 2011-12 7 deposits as mentioned in Notice u/s 142(1) dated 22.06.2018. Therefore, this contention is also rejected. Besides this the Ld. AR also submitted that TDS is not deducted for labour payment is not valid ground because for every labour payment provisions of Section 194C are not applicable. This contention of the Ld. AR required the details upon which the assessee can prove that Section 194C will not be applicable for the payment below the threshold limits as prescribed under Income Tax Act which the assessee failed to prove. Therefore, the CIT(A) was right in dismissing the appeal of the assessee. There is no need to interfere with the findings of the order of the CIT(A). The appeal of the assessee is dismissed. 9. In result, appeal of the assessee is dismissed. This Order pronounced in Open Court on 21/05/2025 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad : Dated 21/05/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "