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Facts
The assessee's case was reopened on the basis of cash deposits in a bank account. The Assessing Officer made an addition of Rs. 11.00 Lac under Section 69A of the Act. The assessee claimed the source of funds was from family pension and bank interest, and that a Rs. 2.20 Lac deposit was a result of the CPC erroneously considering a Rs. 2.00 Lac withdrawal five times.
Held
The Tribunal found that the Assessing Officer did not provide sufficient justification for the addition of Rs. 11.00 Lac. The assessee's explanation regarding the Rs. 2.20 Lac deposit appeared reasonable, and the lower authorities' orders lacked proper reasoning.
Key Issues
Whether the addition of Rs. 11.00 Lac made by the AO on account of alleged unexplained deposits is justified, considering the assessee's explanation and the lack of proper reasoning by the lower authorities.
Sections Cited
147, 148, 133(6), 69A, 139(1), 250, 144, 271(1)(b), 271(1)(c), 271F
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Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH :: MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY
This appeal has been preferred by the Assessee against the order dated 06/01/2025 impugned herein passed by the ADDL/JCIT (Appeals)-1, Mumbai (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2012-13.
(Maina Devi Patni) 2. The case of the assessee was reopened u/sec. 147 of the Act dated 22/03/2019 by issuing notice u/sec. 148 of the Act, mainly on the reason that, Assessee had deposited cash of Rs. 4.40 Lac and Rs. 6.60 Lac, as time deposit in the bank account maintained with HDFC bank during the assessment year under consideration, however, offered no explanation despite of sending notice u/sec. 133(6) of the Act on dated 22/02/2019. Thereafter, the Assessing Officer (AO) issued statutory notices to the Assessee, however, the Assessee made no compliance, and therefore, the AO ultimately by considering the aforesaid deposits made by the Assessee in her bank account, made the addition of Rs. 11.00 Lac u/sec. 69A of the Act.
The Assessee, being aggrieved, preferred first appeal before the Ld. Commissioner, and mainly submitted that Assessee’s source of income was from family pension and interest from bank. Even otherwise, the income was below than the taxable limit, therefore, Assessee has not filed any return of income u/sec. 139(1) of the Act. The Assessee further claimed that during the assessment year under consideration, she had deposited an amount of Rs. 2.20 Lac in her bank account on dated 21/02/2012 by withdrawing Rs. 2.00 Lac from her bank account maintained with SBI (erstwhile SBBJ) a/c No. 511000016031 on dated 23/01/2012. The Assessee also filed bank statement, which reflects the aforesaid amounts. The Assessee also submitted before the Ld. Commissioner that though she has carried-out single transaction and there is no other transaction in her bank account more than Rs. 2.20 Lac, but may be inadvertently, the CPC somehow, considered the amount of Rs. 2.20 Lac by 05 times, in the Income tax information.
This Court observe that though the Ld. Commissioner in the impugned order mentioned the grounds of appeal and also the fact (Maina Devi Patni) that Assessee submitted various details as called for, such as, bank statements etc., which were on record, however still Ld. Commissioner dismissed the appeal of the Assessee by passing a cryptic and unreasoned order, which read as under: -
“Decision: - Here the submissions made by the Assessee are not to be viable. Therefore, the AO has rightly completed assessment u/sec. 144 of the Act and initiated penalty proceedings u/sec. 271(1)(b), 271(1)(c) and 271F of the Act. Accordingly, appeal of the Assessee is dismissed.”
This Court is of the considered view that it is the bounden duty of the appellate authority to pass appropriate order, considering the factual aspects, merits of the case and issues(s) raised by the parties and by giving proper reasoning, however, in this case, it has not been done so. Therefore, the impugned order is liable to be set aside. Even otherwise, this Court observe that the Assessee being as senior citizen has also raised grievance before “ The Chairman, Local Committee to deal with tax payers grievance from high pitched scrutiny assessment Room No. 402, 4th Floor, Jeevan Nidhi-II, Jaipur, ” on dated 24/04/2023, however of no avail.
Thus, considering the peculiar facts and circumstances in totality, as well as the documents available on record, this Court is of the considered opinion that claim of the Assessee that she has not made any deposit more than Rs. 2.20 Lac in HDFC Bank by withdrawing amount of Rs. 2 Lac from pension account maintained with SBBJ account on dated 23/01/2022, prima facie appears to be reasonable, plausible and acceptable. Even otherwise, no other material either cited by the authorities below in their respective orders in making and sustaining the addition of Rs. 11.00 Lac, nor available on record, except information received by the AO.
Thus, considering the peculiar facts and circumstances in totality, this Court is inclined to delete the addition under consideration, however subject to verification by the AO.
As the Assessee now expired, therefore, the AO shall afford opportunity of being heard to the legal heir(s) of the Assessee by bringing them on record, as per the provisions of the Act.
In the result, appeal filed by the Assessee, is allowed on the aforesaid terms.
Order pronounced in open court on 31.10.2025.