SMT. KUSUM MUDALIYAR, AMBIKAPUR,AMBIKAPUR V. .INCOME TAX OFFICER-1, AMBIKAPUR, AMBIKAPUR

ITA 434/RPR/2024

AI Insights

The case involves Smt. Kusum Mudaliyar, who appealed against the orders of the Commissioner of Income-Tax (Appeals) and the A.O, which confirmed the addition of Rs. 11,45,000 as unexplained money under Section 69A of the Income-tax Act, 1961. The addition was initially based on cash deposits allegedly made in the assessee's bank account, which she denied. The A.O and the CIT(Appeals) upheld the addition due to the assessee's non-compliance and failure to provide satisfactory explanations or evidence during the proceedings. The Tribunal found that the specific bank account in which the deposits were made was not identified in the lower authorities' orders and directed a re-examination of the matter.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46701 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Other Referred Cases: CIT vs. B.N. Bhattacharya (1977) 118 ITR 461 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: G.S. AGRAWAL; MAKING
• Keywords: Reassessment proceedings; Rectification of order; Assessment record; Revision of order
• Section: 147; 144; 142(1); 154; 69A

Judgement Text

"आयकर अपीलीय अधिकरण न्यायपीठ “एक-सदस्य” मामला रायपुर में IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR श्री रवीश सूद, न्याययक सदस्य क े समक्ष BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.434/RPR/2024 यििाारण वर्ा / Assessment Year : 2013-14 Smt. Kusum Mudaliyar Ward No.4, Gandhinagar, Veer Sawarkar Marg, P.O. Ambikapur, Dist. Sarguja PAN : BNXPM2580G .......अपीलार्थी / Appellant बिाम / V/s. The Income Tax Officer-1, Ambikapur (C.G) ……प्रत्यर्थी / Respondent Assessee by : Shri G.S. Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 13.12.2024 घोषणा की तारीख / Date of Pronouncement : 20.12.2024 2 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 21.08.2024, which in turn arises from the order passed by the A.O under Sec. 144 r.w.s. 263 r.w.s. 144B of the Income-tax Act, 1961 (in short ‘the Act’) dated 26.03.2022 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal: “1. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals) erred in confirming the Order of the Ld. Assessing Officer who made the addition of Rs.11,45,000/- for so-called cash deposit into Bank Account, rejecting the explanation that no such deposit was made by the Appellant in her Bank Account and for that Bank Statements of relevant Bank Accounts were filed, and also not informing the Bank Account which the Ld. Assessing Officer is referring. Prayed that the addition of Rs.11,45,000/- for so-called cash deposit into Bank is purely under presumption and surmises and is arbitrary and be deleted. 2. That under the facts and. the law, the Ld. Commissioner of Income Tax (Appeals) further erred in confirming the Order of the Ld. Assessing Officer who passed the Order u/s.144 though the Appellant has filed the Return of Income, which was also considered in assessing the income, and has also filed written submission. Prayed that the Assessment Order is against natural justice and be annulled. 3. That under the facts and the law, the initiation of proceedings u/s 148 is void ab-initio as there is no reason to form satisfaction that Rs.11,45,000/- was deposited into Bank as there does not exist such deposit and it is on the basis of borrowed opinion. Prayed to annul the Assessment Order. 3 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 4. That under the facts and the law, the Order of the Ld. Commissioner of Income Tax (Appeals) confirming the Order of the Ld. Assessing Officer who made the arbitrary addition of Rs.11,45,000/- has caused great hardship to the Appellant who is aged about 79 years and had paralytic attack at right side and is bed-ridden and husband is cancer and heart patient. Prayed that great injustice has been done to the Appellant by making the above addition arbitrary and raising demand by charging tax at special rate u/s.115BBE. Prayed to annul the Assessment Order.” 2. Succinctly stated, the A.O observed that though the assessee had made cash deposits of Rs.11.45 lacs in her bank account with Central Bank of India, Branch: Ambikapur but she had not filed her return of income u/s. 139 of the Act. Accordingly, the A.O initiated proceedings u/s. 147 of the Act. 3. Original assessment was framed by the A.O vide his order passed u/s. 144 r.w.s. 147 of the Act, wherein after treating the subject cash deposits of Rs.11.45 lacs as the assessee’s unexplained money u/s. 69A of the Act, the income of the assessee was determined by him at the same amount. 4. Subsequently, the assessee filed her return of income for the subject year on 01.05.2018, declaring an income of Rs.84,550/-. The A.O after considering the return of income filed by the assessee, vide his order of rectification passed u/s. 154 of the Act, dated 20.05.2019 reduced the assessed income of the assessee to the income that was now returned by her i.e Rs. 84,550/-. 4 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 5. The Pr. CIT, thereafter, called for the assessment records of the assessee. The Pr. CIT was of the view that as the A.O without verifying the “nature” and “source” of the cash deposits of Rs.11.45 lacs (supra) made in her bank account, had vide his order passed u/s.154 of the Act, dated 20.05.2019 vacated the addition and accepted her returned income, thus, the same had rendered his order as erroneous in so far it was prejudicial to the interest of the revenue. Accordingly, the Pr. CIT vide his order passed u/s. 263 of the Act, dated 18.03.2021 directed the A.O to make adequate enquiries as regards the genuineness of the business, source of cash deposits and credit entries in the bank account of the assessee and, thus, set-aside the assessment order to his file for fresh adjudication. 6. The A.O vide his order passed u/s. 144 r.w.s. 263 r.w.s. 144B of the Act, dated 26.03.2022 in absence of any explanation forthcoming from the assessee as regards the “nature” and “source” of the cash deposits of Rs.11.45 lacs (supra), thus, held the same as her unexplained money u/s. 69A of the Act and assessed the income at Rs.12,29,550/-. 7. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success. As the assessee had failed to participate in the proceedings before the first appellate authority, therefore, the latter finding no infirmity in the view taken by the A.O, approved the same, observing as under: 5 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 “6.1 During the course of assessment proceedings, the Assessing Officer in his assessment order dated 26/03/2022, has stated that- \"In this case, as per AIR information, the assessee had deposited cash amounting to Rs.11,45,000/- in her bank account with the Central Bank of India, Ambikapur. Further, the assessee had not filed her original return of income as per the provisions of Section 139 of the Act. Therefore, the case of the assessee was reopened and reassessment proceedings were finalized vide order passed u/s. 144 r.w.s. 147 of the Act by making an addition of Rs. 11,45,000/- u/s 69A of the Act. Subsequently, assessing officer passed rectification order u/s 154 of the Act revising income of the assessee from Rs. 1,45,000/- to Rs. 84,550/-. Thereafter, the Ld. PCIT took up the case for revision and passed order u/s. 263 of the Act on 18.03.2021. In the revision order, the Ld.PCIT treated the rectification order passed by the assessing officer as not in accordance with law and found prejudicial to the interest of revenue. Accordingly, vide order passed u/s 263 of the Act issued direction to examine / verify the nature of business and source and nature of cash transactions in this case. 1. Thereafter, notices u/s 142(1) of the act were issued to the assessee on 28.09.2021, 07.12.2021, 06.01.2022, 25.01.2022 and 03.02.2022. However, the assessee remained non-responsive to all these notices. 2. Due to repeated non-compliance on part of the assessee, a show cause notice u/s 144 of the Act was issued to the assessee on 02.03.2022 proposing therein as to why cash deposit amounting to Rs. 11,45,000/- in Central Bank of India should not be treated as unexplained money u/s 69A of the Act and accordingly added to the total income of the assessee. 1. The assessee submitted reply on 03.03.2022. The reply submitted by the assessee have been perused and found to be general in nature. On the issue of cash deposit, the assessee stated that she had not deposited any cash in bank and submitted copy of bank account statement maintained with the SBI and has not deliberated upon the cash deposit made in the bank account with Central Bank of India, which was duly made part of the show cause notice issued to the assessee. 2. Thereafter, draft assessment order and computation of income was sent to the assessee along with the show cause notice issued to the assessee on 22.03.2022 with compliance date of 25.03.2022. The notice was duly delivered upon the assessee through mail on the very same day. However. the assessee again failed to comply 6 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 with the notice till date. Therefore, assessment proceedings in the case is being finalized accordingly. 3. In view of the above mentioned facts and circumstances, it can safely be assumed that the assessee has no plausible explanation with regard to source of cash deposit amounting to Rs. 11,45,000/- in the account maintained with the Central Bank of India. Therefore, for want of source of cash deposit, the said amount of Rs. 11,45,000/- is treated as unexplained money of the assessee u/s 69A of the Act, subject to tax as per the provisions of section 115BBE of the Act.(Addition of Rs. 11,45,000/- )\" 6.2 In light of the above details of non-compliance and. non- pursuance of appeal, reference is made to the following judicial ruling of the Hon'ble Apex Court. In CIT vs. B.N. Bhattacharya (1977) 118 ITR 461 (SC), the Hon'ble Supreme Court while dealing with the issue of pursuing of appeal has stated that \"The appeal does not mean only filing of memorandum of appeal but also pursuing it effectively\". The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the following maxim- \"vigilantibus non dormientibusjurasubveniunt\". 7. In the present case, more than sufficient opportunity was given to appellant at the time of appellate proceedings to furnish the necessary details/documentary evidences in support of his case but the appellant has failed to produce any supporting material in this regard. In the absence of any evidence to the contrary, the analysis of the AO in assessment order dated 26/03/2022 is clearly against the claim of the appellant. Accordingly, the assessment order of AO is upheld and the appeal of the appellant is hereby dismissed. 8. In the result, appeal is dismissed. 8. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 9. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. 7 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 10. Shri G.S. Agrawal, Ld. Authorized Representative (for short ‘AR') for the assessee, at the threshold of hearing, submitted that both the lower authorities had based on perverse observations made/sustained the addition of Rs.11.45 lac (supra) u/s. 69A of the Act. Elaborating further on his contention, the Ld. AR submitted that the A.O in the case of assessee’s husband, viz. Shri Beeraswamy Yogeshwar Mudaliar had also based on same fact i.e there was a cash credit of Rs.11.45 lac in his bank account from undisclosed sources, vide order u/s. 144 r.w.s. 147 of the Act, dated 15.12.2018 determined his income at Rs.11.45 lacs. The Ld. AR submitted that Shri Beeraswamy Yogeshwar Mudaliar (supra) also had, thereafter, filed his return of income declaring an income of Rs.3,02,680/-. The Ld.AR submitted that the A.O considering the aforesaid returned income of Shri Beeraswamy Yogeshwar Mudaliar (supra) had vacated the addition of Rs.11.45 lacs and accepted the returned income that was disclosed by him in his return. The Ld. AR submitted that the Pr. CIT vide his order passed u/s. 263 of the Act, had thereafter also set-aside the assessment order in the case of assessee’s husband and based on the same, the A.O vide his order passed u/s. 147 r.w.s. 263 r.w.s. 144B of the Act dated 28.03.2022 had re-determined his income at Rs.14,47,680/- (i.e. after making an addition u/s. 69A of Rs.11.45 lacs). 11. The Ld. AR submitted that the assessee does not hold any such bank account in which cash deposits of Rs.11.45 lac (supra) was made by her 8 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 during the year under consideration. The Ld.AR submitted that the assessee holds three bank accounts, viz. (i). Savings bank account No.33273 with State Bank of India, Branch: Ambikapur; (ii) Joint account No.550337 with her husband Shri Beeraswamy Yogeshwar Mudaliar (supra) with Central Bank of India, Branch: Ambikapur; and (iii) Joint account No.73227 with her husband Shri Beeraswamy Yogeshwar Mudaliyar (supra) with State Bank of India, Branch: Ambikapur. The Ld. AR submitted that there was no cash deposits made in the assessee’s savings bank account No.31835833273 with State Bank of India, Branch: Ambikapur during the subject year, Page 2 & 2A of APB. As regards the Joint bank account No.168550337 with Central Bank of India, Branch: Ambikapur, the Ld.AR submitted that the total cash deposits in the said account aggregated to Rs.2.80 lacs, Page 3 to 5 & 15 of APB. As regards the Joint bank account No.10906073227 with State Bank of India, Branch : Ambikapur, it was submitted by the Ld.AR that the total cash deposits in the said account during the subject year aggregated to Rs.3.90 lacs, Page 6 to 12 & 14 of APB. Elaborating further on his contention, the Ld.AR submitted that the assessee does not hold any bank account in which cash deposits of Rs.11.45 lac (supra) were made during the subject year. The Ld. AR to buttress his aforesaid claim had as per direction of the bench placed on record an “affidavit”, dated 16.12.2024 of the assessee which reads as under (relevant extract): 9 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 It was thus, the claim of the Ld.AR that both the lower authorities without pointing out any such bank account in which she had made cash deposits of Rs. 11.45 lac (supra) during the year under consideration, had most arbitrarily made/sustained the addition to the said extent in her hands. 12. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. However, the Ld. DR on being queried as to in which bank account cash deposits of Rs.11.45 lac (supra) was made by the assessee during the subject year, failed to come forth with any reply. 13. I have thoughtfully considered the facts involved in the present case in the backdrop of the contentions advanced by the Ld. Authorized 10 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 Representatives of both the parties. Ostensibly, it is the Ld. AR’s claim that though the assessee does not hold any such bank account in which cash deposits of Rs.11.45 lac (supra) was made during the year under consideration, but I find that not only the Pr. CIT vide his order passed u/s. 263 of the Act, dated 18.03.2021 but also the A.O/CIT(Appeals) vide their respective orders had made/sustained the impugned addition u/s. 69A of the Act. I have perused the bank accounts held by the assessee, viz. (i). Savings bank account No.33273 with State Bank of India, Branch: Ambikapur; (ii). Joint account No.550337 held alongwith her husband Shri Beeraswamy Yogeshwar Mudaliyar (supra) with Central Bank of India, Branch: Ambikapur and (iii). Joint account No.73227 held alongwith her husband Shri Beeraswamy Yogeshwar Mudaliyar (supra) with State Bank of India, Branch: Amikapur, and find substance in the Ld. AR’s contention that in neither of the said accounts any cash deposits aggregating to Rs.11.45 lac (supra) was made during the year under consideration. In fact, I find that even the aggregate amount of cash deposits in the aforementioned bank accounts do not amount to Rs.11.45 lac. Also, I find that in neither of the orders of the lower authorities there is any whisper about the specific bank account of the assessee, in which, cash deposits of Rs.11.45 lacs was made by her during the year under consideration. At the same time, I cannot remain oblivion of the fact that not only the A.O vide his initial assessment order passed u/s. 144 r.w.s. 147 of the Act, dated 14.12.2018 had based on 11 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 information received from ITD/AIR/ITBA/AIMS that cash deposits of Rs.11.45 lacs were made by the assessee in her bank account with Central Bank of India, held the said amount as her unexplained money u/s. 69A of the Act, but also his order u/s. 154 of the Act, dated 20.05.2019 wherein he had vacated the aforesaid addition was thereafter set-aside by the Pr. CIT vide his order passed u/s. 263 of the Act dated 18.03.2021. Apart from that, the A.O while giving effect to the directions of the Pr. CIT u/s. 263 of the Act, dated 18.03.2021, had vide his order passed u/s. 144 r.w.s. 263 r.w.s. 144B of the Act, dated 26.03.2022 once again made an addition of Rs.11.45 lac (supra) u/s. 69A of the Act. Accordingly, I am of a firm conviction that the claim of the assessee that she does not hold any bank account, either single or jointly, in which cash deposits of Rs.11.45 lac (supra) was made during the subject year cannot be summarily accepted on the very face of it. At the same time, I am of a firm conviction that in case the assessment pursuant to the order u/s. 263 of the Act which, thus, had resulted to an addition of Rs.11.45 lacs (supra) is based on misconceived fact and there is no cash deposits of Rs.11.45 lac (supra) in the bank account of the assessee during the year under consideration, then, by no stretch of imagination the addition made in her case can be sustained. However, as the aforesaid facts would require verification, therefore, I am of the view that the matter in all fairness requires to be restored to the file of the A.O who is directed to re- adjudicate the said issue after confronting the assessee with the bank 12 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 account/accounts, in which, the cash deposits of Rs.11.45 lac (supra) were made by her during the subject year. Needless to say, the A.O shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at liberty to substantiate her claim on the basis of fresh documentary evidence, if any. 14. In the result, the appeal filed by the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in open court on 20th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) न्याययक सदस्य/JUDICIAL MEMBER रायपुर/ RAIPUR ; ददनाांक / Dated : 20th December, 2024. **SB, Sr. PS आदेश की प्रयिललपप अग्रेपर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण,रायपुर बेंच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गार्ड फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, रायपुर / ITAT, Raipur. 13 Smt. Kusum Mudaliyar Vs. ITO-1, Ambikapur ITA No. 434/RPR/2024 Date 1 Draft dictated on Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order "