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Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI
Before: SHRI R.K. PANDA
ORDER The above two appeals filed by the assessee are directed against the separate orders dated 23.09.2019 and 24.09.2019 of the learned CIT(A)-13, New Delhi, relating to Assessment Year 2010-11. For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.
None appeared on behalf of the assessee when the name of the assessee was called. No adjournment petition seeking adjournment of the case has been filed. It was seen that the notice issued by the Registry through RPAD was returned by the postal authority with the remark “incomplete address”. The assessee has also not taken any steps to intimate the change of address, if any. Therefore, I deem it proper to decide the issue on the basis of material available on record and after hearing the ld. DR.
Although, a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) in confirming the addition of Rs. 13,51,000/- made by the Assessing Officer u/s 68 of the Act on account of cash deposits in the bank and also the validity of the reopening of the assessment
Facts of the case, in brief, are that the assessee is an individual. On the basis of AIR information that the assessee has made cash deposit of Rs.13,51,000/- in her saving bank account maintained with Axis Bank, the case of the assessee was reopened as per provisions of section 147 of the Act after recording reasons and after obtaining necessary approval from the competent authority. Accordingly, notice u/s 148 of the Act was issued and served on the assessee. Since, the assessee did not file the return of income in response to notice u/s 148 of the Act and did not cooperate in the assessment proceedings despite issue of notice u/s 142(1) of the Act, the Assessing Officer completed the assessment u/s 147/144 of the Act determining the total income at Rs.13,51,000/-.
5. Before the Ld. CIT(A), apart from challenging the addition on merit, the assessee challenged the validity of reassessment proceedings. However, the Ld. CIT(A) was not satisfied with the explanation given by the assessee and upheld the validity of reassessment proceedings. So far as the addition of Rs.13,51,000/- is concerned, he accepted the contention of the assessee that the same be considered as addition u/s 69A of the Act.
Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:-
1. On the facts and in the circumstances of the case and in law the Id. CIT (Appeals] erred in: i. confirming the action of the Assessing Officer in initiating proceedings under Section 147/148 of the Income Tax Act, 1961 (‘the Act’) without there being any valid reason to believe any escapement of income; ii. confirming the addition made by the Assessing Officer in a sum of Rs. 13,51,000/- on account of cash deposited in bank
invoking Section 68 of the Act; 2. On the facts and in the circumstances of the case and in law the Id. CIT (Appeals) erred in not granting relief by passing a speaking order with regard to invocation of.Section 115BBE of the Act. 7. I have heard the ld. DR and perused the record. I find the ld. CIT(A) while upholding the reassessment proceedings and confirming the addition u/s 69A of the Act has held as under:-
4.1 I have considered the material on record including oral and written arguments/submissions of the appellant/AR and the (impugned) assessment order. 4.2 The case was reopened by issue of notice u/s 148 after following due procedure, on 30.03.2017 which was duly served, as stated by the AO in the assessment order. There was No-PAN AIR information regarding cash deposit of Rs. 13,51,000/- in the savings bank account in the Axis Bank during FY 2009-10. Prior to issue of notice u/s 148 the AO also issued notice u/s 133(6) to the appellant to furnish information regarding the source of cash deposits. However, there was no compliance and the AO accordingly initiated proceedings u/s 147. In the absence of any compliance or explanation, the AO passed a best judgment order u/s 144 and assessed the income at Rs. 13,51,000/-. 4.3 The appellant filed an appeal challenging the addition which is being adjudicated below: 4.3.1 The appellant has raised the issue of service of notice u/s 148 stating that since the appellant had shifted residence to Ludhiana, the said notice was never served on her. Firstly, it is seen that the appellant has not informed the Department nor made modification in the PAN data base and failed to discharge her duty as a bonafide tax payer/ PAN card holder. Surprisingly, even the address in Form 3.5 of the appeal filed on 13.11.2018 reflects the address in Delhi which is the same on which the notices were sent. This establishes that the Delhi address is still being used by the appellant even if she has shifted to Ludhiana as claimed. In any case even if it was so, it has not been claimed that the notices issued were returned unserved. Infact, it is more likely that the said notices were delivered/ served on the Delhi address and the appellant has alleged non service of notices on pretext of shifting to Ludhiana. Infact it is nowhere proved that during or before that period she had shifted to Ludhiana. Thus, the claim of non service of notices is not established and therefore rejected. The appellant claims to have filed an ITR in physical form, however no proof has been submitted during appellate proceedings. Thus, the claim that she had filed ITR and that the ITO did not consider it is not acceptable and is dismissed. The appellant has also stated that the reply filed by her has not been considered. This contention is also not supported by documentary evidence which therefore justifies the ex-parte order passed by the AO. 4.3.2 The additional ground raised subsequently on 02.07.2019 refers to the initiation of proceedings u/s 147/148 being without valid reason. The additional ground is accepted for adjudication. However, it is devoid of merit since the AO formed a reason to believe not mechanically on the basis of AIR information, but after giving opportunity to the appellant even before initiating proceedings and also checking from data available with him. He also issued notice u/s 133(6) to the Axis Bank and obtained the bank statement. After perusing and analyzing the amounts, nature and frequency of the transaction, he assessed the income of the appellant. 4.3.3 A perusal of the Axis Bank statement (opened on 25.05.2009), of the appellant brings out that there are a total of 25 cash deposits out of which nearly 15 deposits are of Rs. 49,900/-, between 04.07.1009 and 28.07.2019. There is no explanation offered regarding this magic figure of Rs. 49,900/- . Interestingly, there is no entry between 26.12.2009 and 18.09.2017. The extract of the bank statement is given below:
Anita Khatri A/c No. 431010100123402 Date Mode Withdrawals Deposits Balance Initials Sr. Cheque No. no. 1 30.05.2009 By cash 1,00,000 100000 Cr. 2 05.06.2009 By cash 50,000 150000 Cr. 3 05.06.2009 41831 100000.00 50000 Cr. Elite Stock Management Ltd 4 25.06.2009 By cash 50,000 100000 Cr. 5 27.06.2009 41832 CTS-lnward- 100000.00 0 Clearing 6 02.07.2009 By cash 4,00,000 400000 Cr. 7 03.07.2009 By cash 49,900 449900 Cr. 03.07.2009 41833 400000.00 49900 Cr. CTS-lnward- 8 Clearing 9 04.07.2009 By cash 49,900 99800 Cr. 10 06.07.2009 By cash 49,900 149700 Cr. 11 07.07.2009 By cash 49,900 199600 Cr.
12 08.07.2009 By cash 49,900 249500 Cr. 13 09.07.2009 By cash 49,900 299400 Cr. 14 10.07.2009 By cash 49,900 349300 Cr. 15 11.07.2009 By cash 49,900 399200 Cr. 16 13.07.2009 By cash 49,900 449100 Cr. 17 14.07.2009 By cash 900 450000 Cr. 18 22.07.2009 By cash 49,900 499900 Cr. 19 24.07.2009 By cash 49,900 549800 Cr. 20 25.07.2009 By cash 45,600 595400 Cr. 21 25.07.2009 By cash 49,900 645300 Cr. 22 27.07.2009 By cash 49,900 695200 Cr. 23 28.07.2009 By cash 49,900 745100 Cr. 24 29.07.2009 By cash 600 745700 Cr. 25 30.07.2009 By cash 4600 750300 Cr. 31.07.2009 By Clearing- 5000 755300 Cr. 26 838554-CNRB 27 03.08.2009 41834 155300 Cr. CTS-lnward- 600000.00 Clearing 10.08.2009 CTS-lnward- 41835 150000.00 5300 Cr. 28 Clearing 29 30.09.2009 2:Int. Pd:01-07 : 1050 6350 Cr. INT 30 05.10.2009 Yourself 41837 4990.00 1360 Cr. 28.10.2009 Self/To Cash 41838 1300.00 60 Cr. 1500 30.10.2009 By Cash 1560 Cr. 5 2: Int . Pd:01- 10- 26.12.2009 :INT 1565 Cr. 26.12.2009 Self/ To Cash 185581 1565.00 0 Cr. Balance in Flexi Deposit (Printed Date 18.09.2017 18.09.2017 0 Cr. 13:11: 30 Hrs)
4.3.4 The appellant has submitted that the cash deposits were collections arising out of liquidation of stock in hand of cloth (claimed to be doing cloth business) and sale of domestic family assets such as fridge, Coolers, geysers, furniture etc. Even if the appellant's explanation was correct, it defies logic why the entire cash has been deposited over a span of two months of June and July, 2009. Even if stocks were sold why were there deposits below 50,000/- on almost daily basis. If the argument regarding sale of domestic items is to be entertained, there is no proof of the transaction. Moreover, the period and timing involved is not justified since, the appellant has not established the exact date of shifting from Delhi to Ludhiana, which led to sale of domestic items on almost a war footing followed by frequent cash deposit in the bank account. The appellant has put forth an argument that only the profit element should have been put to tax, but since the appellant has also not established the fact that the cash deposits were related to sale proceeds of the cloth business, this argument is not acceptable. 4.3.5 The appellant has also raised an objection that addition u/s 68 was not feasible since, the credits were not in the assessee's books of account but her bank account. It is therefore held that the said addition of Rs. 13,51,000/- may be treated as addition u/s 69A on account of unexplained money, instead. The objection that provisions of section 115BBE were introduced by the Finance Act, 2012 w.e.f. 01.04.2013 hence not applicable in the relevant assessment year i.e. AY 2010-11, appears to be justified and is therefore accepted. Accordingly, in light of the facts and circumstances of the case, the addition of Rs. 13,51,000/- is hereby confirmed u/s 69 A of the Act.
5. All grounds are disposed off, as above.”
From the above, it is seen that the Ld. CIT(A) has given valid reasons while upholding the validity of reassessment proceedings and addition u/s 69A of the Act.
Since, the order of the Ld. CIT(A) is a reasoned one, therefore,
I do not find any infirmity in the same. Accordingly, the same is upheld and the grounds raised by the assessee are dismissed.
In the grounds of appeal, the assessee has challenged the order of the Ld. CIT(A) in confirming the penalty of Rs.4,17,459/- levied by the Assessing Officer u/s 271(1)(c) of the Act.
After hearing the Ld. DR and perusal of the record,
I find the Ld. CIT(A) upheld the addition of Rs.13,51,000/- made by the Assessing Officer being cash deposit in the bank account of the assessee maintained with Axis Bank u/s 69A of the Act. The Assessing Officer thereafter initiated penalty proceedings u/s 271(1)(c) of the Act. Rejecting the various explanation given by the assessee, the Assessing Officer levied penalty of Rs.4,17,459/-, which has been upheld by the Ld.
CIT(A) by observing as under:-
4.1. I have considered the material on record including oral and written arguments/submissions of the appellant/AR, the (impugned) penalty order. 4.2. The case was reopened u/s 147 on account of unexplained ash deposits of Rs.13,51,000/- in the Axis Bank account of the appellant during the relevant period. After giving adequate opportunity to the appellant the case was finalized u/s 144 by assessing the income at Rs.13,51,000/-. The Assessing Officer initiated penalty proceedings by issuing notice dated 13.12.2017 u/s 271(1)(c) r.w.s. 274 fixing the hearing on 12.01.2018 which remained un complied with. Later a notice dated 04.06.2018 was issued through speed post and a notice dated 12.06.2018 was duly served by affixture through the inspector of his office. However, there was no compliance. Accordingly, the AO imposed a minimum penalty @ 100% of tax sought to be evaded amounting to Rs.
4,17,459/- u/s 271(l)(c) vide order dated 28.06.2018. 4.3 Aggrieved by the said order, the appellant filed an appeal on 13.11.2018 stating that the order u/s 144 was not served and thus was not appealed against. It is also claimed that she had shifted residence to Ludhiana, hence, the notices were not received. It has also been requested that the penalty appeal may be decided after the quantum appeal is finalized. The appeal no 75/18-19, AY 2010- 11 has been decided vide order dated 23.09.2019. Some of the common issues regarding service of notice have been discussed in details in the quantum appellate order. The addition made by the AO has been confirmed therein which leads to the conclusion that the appellant concealed the particulars of income which resulted in imposition of penalty on tax sought to be evaded to the tune of Rs. 4,17,459/-. Accordingly, the penalty imposed u/s 271(l)(c) of Rs. 4,17,459/- is hereby confirmed.
All grounds are disposed off, as above.”
I do not find any infirmity in the order of the ld.
CIT(A), confirming the penalty levied by the Assessing Officer.
I find the Ld. CIT(A) has passed an elaborate order which do not call for any interference. Therefore, I uphold the same and the grounds raised by the assessee are dismissed.
In the result, both appeals of the assessee are dismissed.
The Order was pronounced in the open court at the time of hearing itself i.e. on 30.11.2021.