VAGHELA VELUBHAI,AHMEDABAD vs. THE ITO, WARD-3(2)(5), AHMEDABAD

The grounds of appeal are as under:- “1. The notices during assessment were never served upon the assessee physically. Assessee is an old person who was bedridden, hence he cannot access an email or verify IT portal. Assessee is under treatment for IHD, LVD, Dementia, and Peripheral neuropathy, since 2016. A copy of the medical certificate is attached herewith. 2. Due to his illness the assessee was not aware about the assessment proceedings and cannot reply to the notices during the assessment proceedings.

On the facts and circumstances of the case and in law, the learned assessing officer has failed to understand the true nature of the cash deposit and ignored the earlier cash withdrawn from the bank.

That the AO has erred in treating the cash deposit as income since inception i.e. when he has framed an opinion. Simply cash deposited cannot be a reason for income of the assessee. Cash Deposited cannot be treated as income merely on the suspicion and presumption of the AO mainly.

Assessee has filed his return of Income for the A.Y 2017-18 on 15/11/2019 vide Ack No. 256005590151119 declaring total income of Rs. 4,39,684/- in response to the notice issued by AO u/s 142(1)(i) dated 12/03/2018. On the very same day Ld. AO has passed an order u/s144 of the Act by making addition of Rs. 18,50,674 as unexplained money u/s 69A of the Act which is against the law. AO has erred by making addition of Rs. 15,00,000/- u/s 69A of the Act for cash deposit.

CIT(A) has not condoned the delay of 1609 days on the ground that the reason of delay given by the assessee was not acceptable since the documents were inconsistent and lack of supporting proof. As mentioned at Para 7.1.2 on Page 7 & 8 of CIT(A) order.

The learned CIT(A) erred in refusing to condone the delay of 1,609 days, holding that the reasons furnished by the assessee were not acceptable on the alleged ground that the supporting documents were inconsistent and unsupported by adequate evidence. Inspite the hospital and doctor certificate were attached and discussed by the CIT(A) and in its order.

That on the facts and in the circumstances of the case, the Id. Assessing Officer grossly erred in creating an illegal demand against the assessee appellant.

That on the facts and in the circumstances of the case, the ld. Assessing Officer grossly erred in charging interest u/s 234B and 234C and 234D of the Income Tax Act.

That on the facts and in the circumstances of the case, the Id. Assessing Officer grossly 10. erred in raising penalty u/s 271AAC (1), u/s 272A(1)(d) and u/s 271F of the Act.

The appellant craves leave to add, alter, modify or amend any ground on or before the date of the hearing.

Assessee applicant hereby humbly submits that the addition of Rs. 15,00,000/- on account of cash deposited under section 69A (added as unexplained money) should be deleted.

Assessee applicant hereby humbly submits that the addition of Rs.350674/- (Credited in bank account other than) treated as unexplained money under section 69A should be treated as income from other sources as it was already declared in the ITR filed by the assessee.

Please treat the ITR filed by the assessee vide ack no. 256005590151119 dated as valid and consider the same for the computation purpose.

Interest charged u/s 234B, 234C and 234D should be deleted.

Penalty proceedings u/s 271AAC(1), u/s 272A(1)(d) and u/s 271F should be dropped.

AO should be directed to delete the addition and set aside the order.”

The assessee is an individual and has income from other sources during the A. Y. 2017-18. Assessee is an agriculturalist by occupation. Since the assessee has not filed the income tax return under section 139 of the Act and deposited substantial cash in bank account during the demonetization period, the case was selected from data analytics and information gathered during the phase of online verification under Operation Clean Money. Hence, the AO issued notice u/s 142(1) on 12/03/2018. Assessee filed his return of Income for the A.Y 2017-18 on 15/11/2019 declaring total income of Rs. 4,39,684/-. Accordingly, AO has issued various notices to the assessee asking for certain details related to the cash deposit. The Assessing Officer observed that during the demonetization assessee has deposited cash of Rs. 10,00,000/- in the State Bank of India and Rs. 5,00,000/- in Ahmedabad District Central Co-op Bank from withdrawals which were made earlier from the account and agricultural income. During the year, a sum of Rs. 3,50,674/- has been credited in State Bank of India and ADC bank other than cash deposit out of which Rs. 3,49,263/- is shown as Interest income in Income Tax Return filed for the A.Y. 2017-18. The AO has passed an order u/s. 144 of the Act by making addition of Rs. 18,50,674 as unexplained money u/s 69A of the Act on 15/11/2019. Assessee filed his Income Tax Return on 15.11.2019, ignoring the same AO has raised a Penalty u/s 272A(1)(d) and Penalty u/s 271F.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The A.R. submitted that the assessee is an old person who is bedridden and undergoing the treatment for IHD, L VD, Dementia and Peripheral neuropath.. The A.R. submitted the medical certificate before the CIT(A) as well as before the Tribunal. The ld. submitted that the CIT(A) was not right in dismissing appeal of the assessee on the ground of delay as the delay was not deliberate but due to the reason that the assessee is more 80 years. The assessee is also suffering from multiple diseases. The ld. A.R. submitted the detail of bank account related to the agricultural income for the period of 01-04-2015 to 30-03-2017 before the Tribunal. The ld. A.R. further submitted that the assessee has derived agricultural income and therefore the cash deposit in bank account was explained to the Assessing Officer and hence the same cannot be treated a unexplained cash credit u/s. 69A of the Act.

The ld. D.R. relied upon the assessment order and the order of the CIT(A).

Heard both the parties and perused all the relevant material available on record. From the perusal of the records, it appears that the assessee is very old person and the medical condition of the assessee categorically explains that the assessee was not able to fully contest the matter before the CIT(A). From the perusal of the records submitted before the Tribunal at the time of hearing by the ld. A.R. and the bank statement with Ahmedabad District Co- operative Bank and State Bank of India, the assessee has 5 given the details of cash withdrawals from the period of 18th April, 2016 till 13th Nov, 2016 which are as follows: “The below mention table will clarify the shows the details of cash withdrawal and cash deposited in the bank:

In the result, the appeal of the assessee is allowed.