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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI R.K. PANDA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “SMC” : DELHI [THROUGH VIDEO CONFERENCING] BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA.No.6972/Del./2019 Assessment Year 2009-2010 Mr. Rajesh Tyagi, The Income Tax Officer, Ghaziabad. PAN ACQPT1046F Ward – 2 (2), CGO C/o. Sh. Akhilesh Kumar, vs. Advocate, 206-207, Ansal Complex-2, Income Tax Satyam, RDC, Ghaziabad. Building, Ghaziabad. PIN – 201 002. (Appellant) (Respondent) For Assessee : Shri Akhilesh Kumar, Advocate For Revenue : Shri R.K. Gupta, Sr. D.R. Date of Hearing : 11.10.2021 Date of Pronouncement : 11.10.2021 ORDER This appeal filed by the Assessee is directed against the Order dated 29.05.2019 of the Ld. CIT(A), Ghaziabad, relating to the A.Y. 2009-2010.
Facts of the case, in brief, are that the assessee is an individual. AIR information in this case was received that the assessee has deposited cash of Rs.17,71,800/- in his bank account with Bank of India. Letter issued by the A.O. for
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verification in the address given by the assessee in the bank record. However, the A.O. did not receive any reply to the said letter. Therefore, after recording reasons and obtaining prior approval from the PCIT, Ghaziabad, the A.O. issued notice under section 148 dated 21.03.2016. Since no one attended in response to the said notice nor any compliance was made, the A.O. issued notice under section 123(1) along with a questionnaire. Again there was no compliance. Therefore, the A.O. proceeded to complete the assessment under section 147/144 of the I.T. Act, 1961. Since, there was no response from the side of the assessee, the A.O. made the addition of Rs.17,71,800/- to the total income of the assessee.
2.1. Before the Ld. CIT(A), the assessee took the following grounds :
Because, the order of learned lower authority is bad in law and against the facts and circumstances of the case and hence is unsustainable.
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Because, notice u/s 148 of the Act is issued by an authority which is not having jurisdiction over the assessee and not by authority before whom assessee is regularly filing return, hence notice u/s 148 is beyond jurisdiction and order is illegal.
Because, the learned A.O. failed to Issue/serve the notice u/s 148 of I.T. Act; 1961 which is issued hence notice is void ab initio and subsequent proceedings/order is illegal.
Because, there is no reason to believe and/or there is no satisfaction of learned assessing officer or even of superior authority who had given approval mechanically without even observing the provisions of Act and the notice is issued only to conduct roving enquiries hence the notice u/s 148 is beyond the jurisdiction.
Because, without prejudice and dilution to above grounds, only as alternative total additions are illegal being without any opportunity, without any
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material against assessee, against the provisions of law, while the deposit is out valid sources.
In terms of above grounds, notice and order may kindly be quashed or alternatively total additions may kindly be quashed.”
2.2. The assessee also filed detailed written submissions and various decisions to the proposition that in the absence of any service of notice under section 148 to the assessee, the re-assessment proceedings are bad in Law. It was argued that the notice issued under section 148 on the address alleged at Village Duhai, Ghaziabad does not mention House Number, PIN, nearby area etc. The A.O. has not verified the correct address and although the assessee was residing in Delhi and was regularly filing his return of income and the address was also available with the A.O, however, without verification of the facts, the A.O. issued notice under section 148 without mentioning the correct address and, therefore, the same cannot be treated as a valid notice. Further the reasons are recorded by the non-jurisdictional A.O. and approval was also given by non-jurisdictional
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Addl.CIT/PCIT, Ghaziabad. It was argued that mere information of cash deposit itself cannot give rise to a presumption of escapement and, therefore, such reopening of the assessment is not in accordance with Law. Various decisions were cited before the Ld. CIT(A) to the proposition that re-assessment proceedings are bad in Law. Certain additional evidences were also filed before the Ld. CIT(A) in the shape of bank statement of the assessee and his sister and the affidavit of the assessee’s father and that of the assessee.
2.4. However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee. After considering the various arguments advanced before him, the Ld. CIT(A) dismissed the appeal filed by the assessee. However, the Ld. CIT(A) has not at all decided the grounds challenging the validity of the re-assessment proceedings.
Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :
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Because the order of learned lower authority is bad in law & against the facts and circumstance of the case.
Because, Id. CIT(A) erred in sustaining the validity of notice though neither the same is issued correctly being on non-existing/wrong address nor ever served on the assessee despite correct address on the record of revenue and the issue is covered by ratio of decision of Hon'ble jurisdictional court/tribunals etc.
Because Id. CIT(A) further erred in not appreciating 3. the fact that 'reasons'/notice is issued by non- jurisdictional AO though assessee is regularly assessed by other AO at other place and the issue is covered by ratio of decisions of Hon'ble court/tribunals etc. in favor of assessee.
Because notice u/s 148 is issued only to verify 4. cash deposit in bank that too with wrong allegation about no ROI/reply of assessee and as
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such the same is without any valid mental application/satisfaction etc. of AO/approving authority in terms of several cases of Hon'ble jurisdictional/other courts/ITAT and is not a valid notice.
Because, without prejudice to above and in alternative Id. CIT(A) grossly erred in sustaining the addition of Rs.17,71,800/- by rejecting a very plausible explanation about source of deposit supported with affidavits of relations of assessee etc. hence order is against the settled law.
Because Id. CIT(A)erred in not accepting the additional evidences and summarily sustaining the addition on merits arbitrarily.
Therefore, it is prayed that notice/order under question may kindly be quashed, however only as an alternative it is prayed that addition may kindly be quashed”.
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Learned Counsel for the Assessee vehemently challenged the order of the Ld. CIT(A) in dismissing the appeal filed by the assessee without adjudicating the ground challenging the validity of the re-assessment proceedings. Relying on various decisions, he submitted that when there is no service of valid notice on the assessee and the notice for re- assessment proceedings was served through affixture which even does not mention the name of the witnesses, therefore, such re-assessment proceedings are not in accordance with Law. For the above proposition, the Learned Counsel for the Assessee relied on the decision of the Coordinate Bench of the Delhi Tribunal in the case of Digvijay Advisor Pvt. Ltd., Ghaziabad vs., ITO, Ward-7(3), New Delhi vide ITA.No.4540/ Del./ 2019 dated 16.04.2021. He accordingly submitted that the re-assessment proceedings initiated by the A.O. should be quashed.
The Ld. D.R. on the other hand strongly supported the order of the Ld. CIT(A) and submitted that the assessee himself has shown the nature of occupation as ‘agriculture’, whereas, the assessee is a school teacher. Notice was issued
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on the given address as per the bank account details. Therefore, it cannot be said that notice was sent on the wrong address or improper address. If the assessee was staying at Delhi and was filing the return of income at Delhi, the assessee should have corrected his address in the bank account given to the bank. Since the bank account is an undisclosed bank account which is not known to the Department and huge cash has been deposited in the said bank account, therefore, the assessee cannot escape from the onus caste on him. He accordingly submitted that the order of the Ld. CIT(A) be upheld.
Learned Counsel for the Assessee in his rejoinder submitted that this bank account is an old account and the assessee has never stated before any of the authorities that the source of deposit in the bank account is out of agricultural income.
I have considered the rival arguments made by both the sides and perused the orders of the A.O. and the Ld. CIT(A). I have also considered the various decisions cited before me as well as the decisions cited before the Ld. CIT(A). I
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find the assessee in the instant case has made cash deposit of Rs.17,71,800/- in the bank account maintained by him with Bank of India, Ghaziabad. Since the assessee did not respond to the query letter issued by the A.O. for verification, the A.O, after recording reasons, reopened the assessment under section 147 and issued notice under section 148 of the I.T. Act, 1961 in the address as per the bank account details. Since there was non-compliance from the side of the assessee to the various statutory notices, the A.O. completed the assessment under section 147/144 of the I.T. Act, 1961 and determined the total income of the assessee at Rs.17,71,800/- which has been upheld by the Ld. CIT(A). Perusal of the grounds of appeal taken before the Ld. CIT(A), which are already reproduced in the preceding paragraphs, clearly shows that the assessee has challenged the validity of the reopening of the assessment. However, the Ld. CIT(A) has not adjudicated the grounds challenging the validity of the re- assessment proceedings and has straightaway proceeded to decide the appeal on merit. Therefore, considering the totality of the facts and circumstances of the case and in the interest
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of justice, I deem it proper to restore the issue to the file of Ld. CIT(A) with a direction to decide the grounds challenging the validity of re-assessment proceedings taken before her. Since I am restoring the issue to the file of Ld. CIT(A) for deciding the ground relating to re-assessment proceedings, I am not adjudicating the grounds challenging the addition on merit and the same are also restored to the file of Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) shall decide the issue afresh including the grounds challenging the validity of re-assessment proceedings in accordance with Law, after giving due opportunity of being heard to the assessee. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 11.10.2021.
Sd/- (R.K. PANDA) ACCOUNTANT MEMBER Delhi, Dated 11th October, 2021 VBP/-
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Copy to 1. The appellant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT ‘SMC’ Bench, Delhi 6. Guard File.
// By Order //
Assistant Registrar : ITAT Delhi Benches : Delhi.