RANJEET SINGH,PATNA V. ITO, WARD- 5 (5), PATNA

ITA 304/PAT/2024

AI Insights

The case involves an appeal by Ranjeet Singh against the order of the Commissioner of Income Tax (Appeals) - NFAC, Delhi, which was passed in relation to the assessment year 2017-18. The primary contention was regarding the non-service of notice under section 148 of the Income Tax Act, 1961, and the validity of the reassessment proceedings. The assessee argued that the notice was not served, and thus the proceedings were vitiated. The Tribunal examined the procedural aspects of notice issuance and service, the nature of the deposits made during the demonetization period, and the subsequent additions made by the AO. The Tribunal's decision emphasized the need for proper procedural compliance in tax assessments, particularly concerning the service of notices and the opportunity for the assessee to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46687 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: ACIT v. Geno Pharmaceuticals Ltd., Pr. CIT v. Silver Line, Travancore Diagnostics (P.) Ltd. v. ACIT, Raj Files & Stationers P. Ltd. v. ITO, CIT v. United Commercial and Industrial Co (P.) Ltd, CIT v. Precision Finance (P.) Ltd, CIT v. Durga Prasad More, Sumati Dayal v. CIT, Gonuguntla Nirmala Devi Vs ACIT, CIT Vs. Mintu Kalita, Smt. S. Nachiar Vs. ITO and Others, Commissioner of Wealth-tax vs. Sri Jagdish Prasad Choudhary, R.K. Upadhyaya vs. Shanabhai P. Patel
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SAYING
• Keywords: Set aside; Business income; Opportunity of being heard; Unexplained cash credit; Gift; Period of limitation; Competent authority
• Section: 147; 148; 144; 143(3); 142(1); 292BB; 143(2); 119; 250; 251; 48; 68; 208; 133(6); 13; 69A; 72

Judgement Text

"आयकर अपीलीय अधिकरण पटना पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH AT KOLKATA [वर्चुअल कोटु] [Virtual Court] श्री संजय शमाु, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI SONJOY SARMA, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh Vs. ITO, Ward-5(5), Patna (Appellant) (Respondent) PAN: BXUPS0267H Appearances: Assessee represented by : A. K. Rastogi, Adv. Department represented by : Ashwani Kr. Singal, JCIT. Date of concluding the hearing : December 17th, 2024 Date of pronouncing the order : March 17th, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated Page | 2 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 2 of 19 10.01.2024, which has been passed against the assessment order u/s 147/143(3) of the Act, dated 09.12.2019. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that the Ld. CIT(A), NFAC has erred in partly allowing the appeal. 2. For that the Ld. CIT(A), NFAC has erred in shifting the onus upon the appellant to prove the non-service of notice u/s 148 of the Act. 3. For that the Ld. CIT(A), NFAC has failed to appreciate that the onus is on the department to prove the service of notice u/s 148 and in absence thereof the whole proceedings is vitiated in law. 4. For that the Ld. CIT(A), NFAC has erred in holding that the appellant has not raised objection regarding non-service of notice u/s 148 any time during assessment proceedings. 5. For that the Ld. CIT(A), NFAC has erred in not allowing opportunity of virtual hearing as mandated u/s 250(2) of the Act read with Sub-section (6B) and the guidelines prescribed in the Faceless Appeal Scheme, 2021 vide notification dated 28.12.2021.7 6. For that the Ld. CIT(A), NFAC has erred in confirming addition of Rs. 12,00,000/- out of total addition of Rs. 14,50,000/-. 7. For that the Ld. CIT(A), NFAC has erred in restoring addition of Rs.8,00,000/- for verification by the Assessing Officer out of total addition of Rs. 16,00,000/-. 8. For that the Ld. CIT(A), NFAC has no power to set aside any addition for verification by the Assessing Officer and hence the restoration of addition for verification by the Assessing Officer is colorable exercise of power and contrary to the mandate of law. 9. For that the Ld. CIT(A), NFAC has erred in sustaining addition of Rs.8,00,000/- out of total addition of Rs. 16,00,000/-. 10. For that the Ld. CIT(A), NFAC has erred in upholding the action of the Assessing Officer of extending the scope of assessment which was limited to deposit during demonetization and not deposits during the period other than demonetization. 11. For that the Ld. CIT(A), NFAC has erred in approving the order of the Assessing Officer as far as addition of Rs. 16,00,000/- for which there was Page | 3 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 3 of 19 no mandate in CASS and no permission / sanction / approval from higher authorities were taken as mandated in administrative instruction / circular of CBDT dated 30/11/2017 in F. No. DGIT(Vig.)/HQ/SI/2017-18. 12. For that the Ld. CIT(A) has failed to appreciate that the appellant’s income has not exceeded the maximum amount chargeable to tax and hence, there was no return was filed for the year under consideration. 13. For that the Ld. CIT(A), NFAC has erred in upholding invocation of Section-115BBE and consequentially taxation @60%. 14. For that sustenance of addition of Rs. 12,00,000/- and Rs.8,00,000/- u/s 69A are wrong, illegal and unjustified in the facts and circumstances of the appellant’s case. 15. For that the appellant reserves its right to furnish detailed written submission along with documents and evidences on or before date of hearing. 16. For that the appellant may be given opportunity of personal hearing physically/virtually at the time of hearing of the appeal. 17. For that the whole order is bad in fact and law of the case and is fit to be annulled and/or restored back to the file of Ld. CIT(A), NFAC. 18. For that the other grounds, if any, shall be urged at the time of hearing of the appeal.” 3. The Statement of Facts as per Form No. 35 filed before the Ld. CIT(A) and as extracted from the order of the Ld. CIT(A) is as under: “In the present case assessee is an individual having no source of income. During the relevant year under consideration the appellant was found to have deposited Rs. 30,50,000/- bearing A/C No. 2078104000009492 in IDBI Bank, Anishabad Branch, Patna. Out of Rs. 30,50,000/- a sum of Rs. 14,50,000/- was deposited during the period of demonetization and balance amount of Rs. 16,00,000/- was deposited in the rest of period of relevant year under consideration. During the course of assessment proceeding nature and source of above deposit was explained as gift from father. The appellant father is an agriculturist having 7 acres of well fertile and irrigated land. In support of above assertion, a copy of land revenue receipt with detailed description crops which is grown on the aforesaid land were furnished. Besides that, additional sources of father income were stated to be milk sold by him as result of cow farming. Further the learned A.O. was requested to take statement of oath of father. But the learned A.O. disbelieved arbitrarily and discarded the aforesaid positive evidence Page | 4 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 4 of 19 without bringing cognate evidence on record which could contradict the above positive evidence. Above all the learned A.O. falsify the above evidence produced in support of sources of father’s income in signal word that reply submitted in connection with source of income is not satisfactory and thus acted mechanically in order to justify his action treating deposit appeared in bank account was unexplained. In the instant case was reopened u/s 147 of the income tax Act 1961. A notice u/s 148 dated 01.08.2018 has been alleged to have been served on the assessee. But such notice was neither served on appellant on any occasion nor intimated regarding issuance of such notice to the appellant even after lapse almost nine months. The department-maintained silence for complete nine months. The appellant was never asked to show cause as to why not he filled return in response to notice u/s 148. All of sudden in the month May, 2019 he issued notice u/s 142(1) of the income tax Act, 1961. But it is apparent from perusal of assessment order that he did not ever serve any notice u/s 143(2) of income-tax Act, 1961 which is mandatory requirement for assuming jurisdiction u/s 148. Thus, validity reassessment proceeding is questionable and is not sustainable in the eye of law. In the absence of issue and service of notice u/s 143(2) the assessment become null and void. The appellant would like to place reliance on the decision of the Hon’ble High Court in the case of ACIT v. Geno Pharmaceuticals Ltd. [32 taxmann.com 162] wherein it has been held that notice u/s. 143(2) is mandatory and in the absence of service of notice Assessing Officer cannot proceed to make an enquiry on return filed in compliance with notice issued u/s 148 of the Act. Ld. the appellant further relying on the decision of the Hon’ble Delhi High Court in the case of Pr. CIT v. Silver Line [65 taxmann.com 137] submitted that Hon’ble High Court held that merely because assessee participated in proceedings pursuant to notice u/s. 148 of the Act, it would not obviate mandatory requirement of Assessing Officer to issue notice u/s. 143(2) before finalizing the assessment. However relying on the decision of the Hon’ble Kerala High Court in the case of Travancore Diagnostics (P.) Ltd., v. ACIT [74 taxmann.com 239] submitted that the Hon’ble High Court held that, in case of proceedings-initiated u/s. 143(3) r.w.s. 147 requirements to issue notice u/s. 143(2) is mandatory and Section 292BB does not in any manner grant any privilege to Assessing Officer in dispensing with issue of notice u/s. 143(2) of the Act. Appellant also placed reliance on the decision of the Tribunal in the case of Raj Files & Stationers P. Ltd. v. ITO in ITA. No. 7553/Mum/2016 dated 05.07.2017 wherein the Tribunal following the decision of the Hon’ble Bombay High Court in the case of ACIT v. Geno Pharmaceuticals Ltd., (supra) quashed the assessment framed in the absence of notice u/s. 143(2) of the Act. Page | 5 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 5 of 19 After all, in the above case re assessment was complete on 09/12/2019 making addition of Rs. 30,50,000/-. Being aggrieved from order passed by learned the learned A.O appellant prefers this appeal before your honor for equitable justice.” 4. Brief facts of the case are that from OCM data of ITBA module, a large value of cash deposit was found in IDBI Bank, Anishabad Branch, Patna A/c No. 2078104000009492 during the demonetization period in the name of the assessee. Since the assessee had not filed any return of income, proceeding u/s 147 of the Act was initiated after obtaining prior approval of the competent authority and a notice u/s 148 of the Act dated 01.08.2018 was generated and issued to the assessee for filing the return of income within 30 days from the service of the notice. But the assessee did not comply to the notice. Subsequent notices u/s 142(1) of the Act dated 02.05.2019 and a reminder letter dated 23.05.2019, another notice u/s 142(1) of the Act dated 08.07.2019 and reminder letters dated 25.07.2019 and 01.08.2019 were issued but there was non-compliance to all the notices as no response appears to have been filed by the assessee. Finally, as a last opportunity a show cause notice dated 09.10.2019 was issued for compliance on 16.10.2019 in response to which the assessee filed the reply giving explanation for the cash of Rs. 14,50,000/- deposited in his account during the demonetization period which was stated to be given in cash by his father who is an agriculturist. The nature and source of the said amount was stated to be past saving of agriculture income from 7 acres of irrigated land. This reply was not found to be satisfactory as the assessee had not submitted sufficient proof in this regard. The Ld. AO also issued notice u/s 133(6) of the Act to the Manager of the concerned bank and the bank statement received showed that the assessee’s account was also found to be credited with an amount of Rs. Page | 6 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 6 of 19 16,00,000/- during the FY 2016-17 apart from the cash deposited during the period of demonetization. Accordingly, a sum of Rs. 30,50,000/- was treated as unexplained money of the assessee u/s 69A of the Act and the total income was assessed at Rs. 30,50,000/-. 5. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated 10.01.2024 partly allowed the appeal. Before the Ld. CIT(A), the assessee raised the issue of non-service of the notice u/s 148 of the Act and filed written submission on various grounds of appeal although no compliance was made to the notice for hearing issued on 18.02.2021 but in response to the notice issued on 20.12.2023, a written submission was filed on 24.12.2023 which has been discussed by the Ld. CIT(A). The Ld. CIT(A) has discussed the submission of the assessee and confirmed the addition of Rs. 30,50,000/- subject to the verification by the Ld. AO in respect of double addition made, if any, vis-à-vis the bank account of the assessee. The Ld. CIT(A) after discussing the submission of the assessee decided and partly allowed the appeal. 6. Rival contentions were heard and the submissions made have been examined. 7. During the course of the appeal, the Ld. AR emphasised upon the fact that the notice has to be served u/s 148 of the Act and the assessee was denying service of the notice u/s 148 of the Act. Our attention was drawn to para 7.1 of the order of the Ld. CIT(A) in which the service of the notice was disputed. It was also disputed that no notice u/s 143(2) of the Act was issued. The assessment order was sent by Post but the same was not sustainable. Apparently, no such issue was however Page | 7 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 7 of 19 raised before the Ld. AO but was raised before the Ld. CIT(A) for the first time. The finding of the Ld. CIT(A) is as under: “7.1 In the Ground No.1 to 4 of the appeal, the assessee has raised objection basically on two issues the first being that notice u/s.148 was never served on to him and no notice u/s.143(2) was ever issued to him by the AO. Though, the appellant is making open statement that notice u/s148 was never served upon him but he is completely silent as to whether this issue was ever raised by him before the AO while participating in the assessment proceedings. If so, is there any written document/letter available with him and why the copy of same is not being filed during the course of appeal proceedings. From the body of assessment order, it is clear that a notice u/s.148 dated 01.08.2018, was duly generated and issued by the AO. It is also clear from the assessment order that in response to show cause notice dated 09.10.2019, the appellant did file written submission thereby participating in the assessment proceedings. His participation in the proceedings and his action of not having raised any objection before the AO regarding the service of notice u/s.148 is in complete contradiction to the statement(s) made by him at the appellate stage. Nevertheless, even if the assessee chooses to raise such a contradictory issue at the stage of appeal, the same should have been supported by way of some kind of a cogent evidence such as a certificate from the postal authorities and or extracts of his e-mail ID registered with the Department etc. Prima-facie the objection of the assessee of not having served with a notice u/s. 148, that too not supported by way of any evidence, appears to be a self-serving statement which cannot be taken cognizance of. 7.1.1 The assessee submits that the assessment order is bad in law as no notice u/s. 143(2) was issued to him. On the identical issue the Hon'ble Bench of ITAT, Hyderabad in the case of Gonuguntla Nirmala Devi Vs ACIT (ITAT Hyderabad) in the Appeal Number: ITA No. 412/Hyd/2022, pronounced recently on 17/08/2023 has held that the absence of a Section 143(2) notice did not affect the proceedings when no return was filed by the assessee within the stipulated time. In the case under consideration, the fact remains that the assessee has never filed any income-tax return in response to notice u/s.148 and the AO issued notices u/s.142(1) from time to time and hence, there is no infirmity in the action of AO in completing the assessment proceedings. The appellant in his submission, as reproduced above under para 6 of this order has repeatedly stated that issuance of notice u/s.143(2) is a prior requisite for completing the assessment proceedings for which the reference to several case-laws has also been made. However, in all the cases referred by the Page | 8 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 8 of 19 assessee, the income-tax return was duly filed in response to notices u/s.148 thereafter, it was mandatory on the AO to issue notices u/s.143(2)/142(1). Accordingly, the facts of the case-laws referred are different form the facts of the case under consideration. As a result, Ground Nos.1 to 4 of the appeal are dismissed. 8. Now, coming to the main issue of the addition of Rs. 30,50,000/- made by the AO u/s.69A of the Act/which is raised vide ground No.5 of the appeal. Since the only issue involved is of addition made u/s 69A on account of unexplained cash/credits found credited in the bank account of appellant. It is imperative to look upon the ratios laid down by the various Hon'ble Courts in respect of unexplained credit/money found credited in the books/bank accounts of the assessee. 8.1 The fundamental question involved is that whether or not the AO was justified in making the addition of Rs.30,50,000/- under section 69A in the hands of the assessee, and the most critical thing to be examined in this regard is explanation of the assessee with respect to these credits. There is no, and there cannot be any, dispute on the fundamental legal position that the onus is on the assessee to prove 'bonafides' or 'genuineness' of the money credited in his bank account. This approach finds support from the scheme of Section 68/69, which provides that where any sum is found credited in the books/bank accounts of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, such sum may be charged to income tax as the income of that assessee for that previous year. The burden is thus on the assessee to prove the nature and source thereof, to the satisfaction of the Assessing Officer. Everything thus hinges on the explanation given by the assessee and on how acceptable is the explanation so given by the assessee. The next question is as to what the kind of explanation that the assessee is expected to give. 8.2 As noted by Hon'ble Delhi High Court, in the context of issuance of share capital and in the case of PCIT Vs Youth Construction Pvt Ltd [(2013) 357 ITR 197 (Del)], \"it involves three ingredients, namely, the proof regarding the identity of three applicants, their creditworthiness to purchase the shares and the genuineness of the transaction as a whole\". 8.3 That is the approach adopted by Hon'ble Courts above all along. In the case of CIT v. United Commercial and Industrial Co (P.) Ltd [1991] 187 ITR 596 (Cal)], Hon'ble Calcutta High Court has held that under the scheme of Section 68 \"it was necessary for the assessee to prove prima facie the Page | 9 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 9 of 19 identity of creditors, the capacity of such creditors and lastly the genuineness of transactions\". 8.4 Similarly, in the case of CIT v. Precision Finance (P.) Ltd [1994] 208 ITR 465 (Cal)], it was observed that \"it is for the assessee to prove the identity of creditors, their creditworthiness and genuineness of transactions\". 8.5 While examining the issue of genuineness of the transactions entered into by the assessee, it is also important to keep in mind Hon'ble Supreme Court's observation, in the case of CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)], to the effect that \"Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities\". 8.6 Similarly, in a later decision in the case of Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)], Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, \"This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities. Similarly the observation ...that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available.....In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably\". 8.7 An addition under Section 69A can be made where any sum is found credited in the bank account for any previous year, and the assessee either offers no explanation about the nature and source as regards the same, or the explanation offered by him in the opinion of the assessing officer is not found to be satisfactory. That before adverting further, the relevant extract of the aforesaid statutory provision, viz. Section 69A, which reads as under:- \"Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him Page | 10 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 10 of 19 is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.\" 8.8 That a bare perusal of the aforesaid deeming sections therein reveals that an addition under the said statutory provision can be made where the assessee is found to be the owner of a bank account in which the credits were recorded outside the regular books of account maintained for any previous year. Thus, the very sine qua non for making of an addition under Section 69A pre supposes a credit of the aforesaid amount in the 'bank account' held for the previous year. This is the settled position of law that a statutory provision has to be strictly construed and interpreted as per its plain literal interpretation, and no word howsoever meaningful it may so appear can be allowed to be read into a statutory provision in the garb of giving effect to the underlying intent of the legislature. 8.9 Now, the appellant has filed a brief submission wherein it is submitted that out of the total cash deposits/credits of Rs.30,50,000/-, the cash of Rs.14,50,000/- was given to by his father Shri. Satguru Singh, who is a farmer earning income from agriculture and the impugned amount was out of his past savings. However, it is not made clear by the assessee as to why his father kept such a huge amount of cash at home. It is not conceivable that any prudent person will keep on sitting at home with such huge cash, despite having a bank account at least in the name of his family members. Such a behaviour is not normal and it defies the probability. As has been stated above in this order, the principle of preponderance of probability will assume a crucial role, in the absence of availability of direct evidences. The appellant has not stated any reason or purpose for which such huge cash was kept at home by his father which represents his so-called past savings. The appellant is completely silent on this aspect. Thus, prima-facie it appears that the submission of appellant is nothing but an attempt to try to explain the source of cash deposit by making self-serving statements. 8.9.1 The appellant has submitted that Rs.14.50 lacs was the past savings of his father who is an agriculturist. Now, it is a matter of common knowledge, that every person saves money/ funds received by them, for the rainy days. In fact, considering this aspect into mind, the Hon'ble Prime Minister during the Demonetization Scheme 2016, had declared that the revenue will not probe the accounts of individuals. housewives if the deposits made in the bank account were below Rs.2,50, 000/-. The CBDT too issued a public notice dated 18th Nov 2016 and guidelines for Verification of Cash deposit during demonetization to the AO, vide Instruction No. 03/2017 Dated 21st of February, 2017 and annexure thereof issued under section 119 of Income Tax Act. The relevant excerpts Page | 11 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 11 of 19 of F.No.225/100/2017/ITA-11, Annexure \"Source Specific General Verification Guidelines is reproduced as under: \"1. Cash out of earlier income or savings 1.1 In case of an individual (other than minors) not having any business income, no further verification is required to be made if total cash deposit is up to 2.5 lakh. In case of taxpayers above 70 years of age, the limit is Rs.5.0 Lakh per person. The source of such amount can at can be either household savings/savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut-off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc.\" 8.9.2 Thus, the Hon'ble PM and thereafter CBDT, considering the above said aspect in mind and showing their concern had issued instruction under section 119 to AO, and assured that the individual assessee and house wife having no business income, would not be questioned if the bank deposits during the demonetization were found to be less than Rs.2,50,000/ (exemption limit of Income tax for the FY 2016-17). 8.9.3 Thus, the fact of availability of cash out of past savings with the Individuals was acknowledged during the demonetization in 2016. It was acknowledged by the CBDT that cash available with the Individuals out of their past savings at any time of year is acceptable, even in the absence of any specific explanation/source, up to the exemption limit of the income tax. In line with the spirit of CBDT Instruction No. 03/2017, it can safely be presumed that cash in hand to the extent of Rs.2,50,000/- might have been available with the appellant's father who is an agriculturist and accordingly, relief to that extent is given. Hence the AO is directed to reduce the amount of Rs.2,50,000/- from the total amount of cash deposits of Rs.14,50,000/- in making the addition. To that extent, this ground of appeal is partly allowed. Moreover, in respect of other credits in the bank account of Rs. 16,00,000/- added by the AO, the appellant has submitted as below:- \"The other addition is of Rs. 16,00,000/- which has been deposited during the period other than demonetization. This addition was made by the A.O. without requiring any explanation and/or confrontation on this issue as would be evident from the show cause notice 09/10/2019 (at page 15-16 of PB). The bank account is already in possession of the A.O. (copy at page 19-21 of PB). It would be evident from the said bank account that the clearing of Rs.8,00,000/- on 19/09/2016 was reversed by debit of the same amount on that very day due to return of the cheque for the reason \"Image Page | 12 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 12 of 19 not clear” and the bank has directed to present the instrument of Rs.8,00,000/- again and accordingly Rs.8,00,000/- was credited on 21/09/2016. Thus, the A.O. without proper examination and verification of the bank account has added Rs. 16,00,000/- as against actual credit of Rs.8,00,000/- on 21/09/2016.\" In support, the appellant has submitted the copy of impugned bank account, the perusal of which prima-facie shows the contention of the appellant to be correct. It appears that the credit amount of Rs.8,00,000/- on 19.09.2016 vide Instrument No.45970, was reversed due to some technical issue and the same was again credited on 21.09.2016. Thus, if the both credit amounts are are being brought to tax by the AO, the same will tantamount to double addition of the same amount. Accordingly, the AO is directed to verify the contention of the appellant vis-à-vis the bank account and allow relief if the claim of the appellant is found correct. Further, regarding the source of this Rs.8,00,000/, the appellant simply submits that the same was the gift from her maternal aunt namely Manorama Devi, without submitting any Gift Deed, Affidavit or the bank account of Smt. Manorama Devi. Even the extract of statement of Smt. Manorama Devi filed by the appellant nowhere indicate that any gift was given by her to the assessee. In the absence of any cogent evidence the claim of the appellant of having received gift cannot be accepted and hence the addition made by the AO on this account is upheld. To sum up the decision on the issue of additions of Rs.30,50,000/- is as below:- (i) Out of the addition of Rs. 14,50,000/- on account of cash deposits, relief to the extent of Rs.2,50,000/- is given and the balance addition of Rs. 12,00,000/- is upheld. (ii) Out of the addition of Rs. 16,00,000/- on account of credits in the bank account, the AO is directed to verify vis-à-vis the bank account of the appellant as to whether an amount of Rs.8,00,000/- has been considered twice while making addition and if so, to provide relief to the appellant to the extent of Rs.8,00,000/-. In the result, this ground of appeal is partly allowed. 8.9 Having considered entire facts of the case, and the case laws cited above, it is apparent that the appellant has completely failed to offer any explanation either before the AO during assessment proceedings or before me during appellate proceedings, despite affording sufficient number of opportunities and hence, I find no infirmity in the order of AO. Accordingly, the addition made of Rs.30,50,000/- is confirmed, subject to the verification by the AO in respect of double addition made, if any vis-à-vis the bank account of the appellant. The appellant is also directed to furnish all the Page | 13 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 13 of 19 requisite document, bank statements for the purpose of verification before the AO. Accordingly, this ground of appeal is Partly Allowed. 9. In the result, appeal is Partly Allowed. Order passed u/s 250 r.w.s 251 of the I.T. Act, 1961.” 8. As regards the merits of the case, it was submitted that the matter may either be remitted to the Ld. CIT(A) to decide the issue or to the Ld. AO to check and the Ld. CIT(A) had shifted the onus to the assessee which was a negative onus and could not be proved. No virtual hearing was provided and it was requested that the assessee may be allowed the opportunity of virtual hearing under sub-section (2) of section 250 of the Act as no hearing was provided. 9. At this point it is imperative to examine the provision relating to hearing which as per section 2(23C) of the Act is as under: “(23C) \"hearing\" includes communication of data and documents through electronic mode.” 10. The Ld. DR countered this argument of the assessee by saying that the assessee was mixing two issues. Subsection (2) of section 250 of the Act provides a right of an opportunity of being heard which was done by the Ld. CIT(A) by issuing the notices and the assessee filed the reply in electronic mode. The request for virtual mode was not made and if the same was not asked for it could not have been granted. The Ld. AR relied upon the decision of Hon'ble Jurisdictional High Court in the case of Commissioner of Wealth-tax vs. Sri Jagdish Prasad Choudhary [1995] 211 ITR 472 (Patna)[19-05-1994] in this regard. As regards notice u/s 143(2) of the Act the Ld. CIT(A) has discussed this issue in his order in para 7.1.1 (supra) that if no return was filed in response to the notice u/s 148 of the Act there was no requirement of Page | 14 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 14 of 19 issuing any notice u/s 143(2) of the Act. The provisions of section u/s 143(2) of the Act are as under: “143(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.” 11. It is also imperative to understand the provisions of section 292BB of the Act which are as under: “292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was— (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment.” 12. Apparently, no such objection was raised before the Ld. AO therefore the assessee was precluded from raising any such objection subsequently. The assessee has relied upon the decision of Hon'ble Supreme Court in the case of R.K. Upadhyaya vs. Shanabhai P. Patel Page | 15 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 15 of 19 [1987] 33 Taxman 229 (SC)/[1987] 166 ITR 163 (SC)/[1987] 62 CTR 17 (SC)[28-04-1987] in support of the claim that no notice u/s 148 of the Act was served upon the assessee. The submission made in this regard is as under: “Section 34, conferred jurisdiction on the Income-tax Officer to reopen an assessment subject to service of notice within the prescribed period Therefore, service of notice within limitation was the foundation of jurisdiction. The same view has been taken by this court in Jani v. Induprasad Devshanker Bhatt [1969] 72 ITR 595 as also in CIT v. Robert [1963] 48 ITR 177 (SC). The High Court, in our opinion, went wrong in relying upon the ratio of Banarsi Debi v. ITO [1964] 53 ITR 100, in disposing of the case in hand. The scheme of the 1961 Act so far as notice for reassessment is concerned is quite different. What used to be contained in section 34 of the 1922 Act has been spread out into three sections, being sections 147, 148 and 149, in the 1961 Act. A clear distinction has been made out between \" issue of notice\" and \"service of notice\" under the 1,961 Act. Section 149 prescribes the period of limitation. It categorically prescribes that no notice under section 148 shall be issued after the prescribed limitation has lapsed Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. In this case, admittedly, the notice was issued within the prescribed period of limitation as March 31, 1970, was the last day of that period. Service under the new Act is not a condition precedent to conferment of jurisdiction on the Income-tax Officer to deal with the matter but it is a condition precedent to the making of the order of assessment. The High Court, in our opinion, lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Debi v. ITO [1964] 53 ITR 100. As the Income-tax Officer had issued notice within limitation, the appeal is allowed and the order of the High Court is vacated. The Income-tax Officer shall now proceed to complete the assessment after complying with the requirements of law. Since there has been no appearance on behalf of the respondents, we make no orders for costs. Appeal Allowed.” {emphasis supplied} Page | 16 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 16 of 19 13. It is further stated that the aforesaid judgment of Hon'ble Apex Court has unanimously been followed while dealing with assessment/reassessment under the provisions of 1961 Act and the assessee has relied upon (i) (2002) 253 ITR 334 (Gau) - CIT Vs. Mintu Kalita and (ii) (2010) 326 ITR 77 (Mad) - Smt. S. Nachiar Vs. ITO and Others. 14. We have gone through the facts of the case. Neither in the assessment order nor before the Ld. CIT(A) the assessee has filed any affidavit in regard to non-service of the notice but has disputed the same before the Tribunal as was also done before the Ld. CIT(A). In the assessment order while the issue of the notice u/s 148 of the Act dated 01.08.2018 is mentioned and which is not disputed by the assessee, however no mention is made about the service of the same upon the assessee. In the decision relied upon of the Hon'ble Supreme Court in the case of R.K. Upadhyaya vs. Shanabhai P. Patel (supra), a clear distinction has been made out between \"issue of notice\" and \"service of notice\" under the 1961 Act. It is stated that section 149 prescribes the period of limitation for issue of the notice while section 148(1) of the Act provides for service of notice as a condition precedent to the making of the order of assessment and the limitation of making the assessment is governed from the date of service of the notice. It is also held by the Hon'ble Supreme Court in the case cited (supra) that once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. Further, in this case the Ld. CIT(A) has partly allowed the appeal and has set aside the matter related to double addition in the guise of verification by the Ld. AO, which power is not available to the Ld. CIT(A) with effect from 01.06.2001 hence Ground Nos. 7 and 8 of the appeal are allowed. Even though section Page | 17 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 17 of 19 292BB of the Act deems the notice to be valid in certain circumstances, however, since there is no evidence of service of the notice nor any mention in the assessment order and the assessee responded only in response to the final show cause notice issued but did not respond to any of the earlier notices therefore, it cannot be said that the notice was validly served upon the assessee. Since the notice was allegedly not served, this could justify the non-filing of the return of income. However, the assessment has been made u/s 143(3) of the Act while it ought to have been made u/s 144 of the Act as the notice u/s 148 of the Act was not complied with. Since the notice was validly issued and the limitation for making the assessment starts from the date of service of the notice and the two events are different, it would be in the fitness of things and in the interest of justice if the notice issued u/s 148 of the Act on 01.08.2018 is served upon the assessee after the assessee files an affidavit of non-service before the Ld. AO as the jurisdiction was vested in the Ld. AO on account of the notice u/s 148 of the Act being validly issued but for making an assessment the service of the notice is mandatory as in the absence of the service, the assessee could not file the return of income. Therefore, in the interest of justice and fair play to both the assessee as well as the Ld. AO, the Ld. AO is now directed to get the notice issued u/s 148 of the Act dated 01.08.2018 served upon the assessee and thereafter, after considering the submission of the assessee in regard to cash deposits and after granting an opportunity of being heard as per law, make the assessment in regard to cash deposited in the bank account. The assessee contends that no statement of his father was recorded by the Ld. AO and is also relying upon certain other statements recorded in the course of the proceedings of the relatives in the submission made before the Ld. CIT(A). The Page | 18 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 18 of 19 assessee shall be at liberty to make all submissions in order to justify the source of cash deposited in the bank account. With these directions, both the orders of the Ld. AO as well as the Ld. CIT(A) are hereby set aside and the Ld. AO is directed to make the assessment de novo after ensuring the service of the notice u/s 148 of the Act after verifying whether the same was served or not and allowing the assessee to file the return of income during time specified in the notice to be served and thereafter, consider the reply of the assessee and make the assessment as per law. It may be emphasised that while the notice u/s 148 of the Act is held to be validly issued, the service of the notice is being challenged which is a procedural requirement and the Ld. AO is directed to comply with the procedural requirement as per the directions issued. Thereafter, the assessee is required to file the return of income and the Ld. AO shall make the assessment after following statutory provisions in this regard as regards the issue of notice u/s 143(2) of the Act, if any return of income is filed in response to the notice u/s 148 of the Act. With these directions, Ground No. 17 is partly allowed. All other grounds are not being adjudicated as the assessment is being directed to be done de novo. 15. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 17th March, 2025. Sd/- Sd/- [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 17.03.2025 Bidhan (P.S.) Page | 19 I.T.A. No.: 304/PAT/2024 Assessment Year: 2017-18 Ranjeet Singh. Page 19 of 19 Copy of the order forwarded to: 1. Ranjeet Singh, 3, Betaura, Anisabad, Patna, Bihar, 800002. 2. ITO, Ward-5(5), Patna. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Patna Bench, Patna. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "