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Income Tax Appellate Tribunal, “SMC” Bench, Mumbai
Before: Shri Shamim Yahya
O R D E R Per Shri Shamim Yahya (AM) :-
This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-3 dated 18.10.2018 and pertains to assessment year 2010-11.
Grounds of appeal read as under:-
1. Disallowance in respect of Cash Deposit of Rs 18,27,150/-, which was accepted by the preceding AO during the course of assessment completed on March 28 2013.
1.1 On facts and in circumstances of the case and in law, The Ld. CIT(A) erred in confirming the disallowance made by the Ld. A.O on account of cash deposit Rs 18,27,150/- which was accepted by the preceding assessing officer during Assessment Proceedings Completed on March 28, 2013. The provisions of Section 147 if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year)." 1.2 The order is being passed and amount is disallowed based on change in opinion of assessing officer, The Honorable Supreme Court held in the case of Commissioner of Income Tax, Delhi vs. Kelvinator of India Limited (2010) 2 SCC 723.
Brief facts of the case are that in the present case of the assessee assessment was completed on 28.03.2013 in addition of Rs. 1,08,000/- u/s. 68 of the I.T.Act. Subsequently, case was repened on 31.03.2017 by issue of notice on account of Audit Objection raised by the Audit Party. Assessee was issued showcause as to why assessment should not be completed u/s. 144 of the Act treating cash deposits in Saraswat Co-op Bank amounting to Rs. 19,35,150/- as undisclosed income. AO held that assessee has failed to explain the source of deposit and since Rs. 1 lac was already added in the assessment proceeding u/s. 143(3) on 28.03.2013, he reduce the addition and made an addition of Rs. 18,27,150/- u/s. 68 of the I.T.Act.
Upon assessee’s appeal, ld.CIT(A) noted that nobody has appeared before him. He reproduced the statement of facts submitted before him as under:- “During the previous year 2009-10 relevant to assessment year 2010-11 had deposited the cash of Rs. 1935150 in my saving account with the Saraswat Coop Bank Ltd. My case for the said assessment year was selected for the Scrutiny Assessment after submitting the relevant documents and details for the relevant year and the assessing officer had apassed order u/ 143 3 as on 28.03.2013 and disallowing Rs. 108000/- out or Rs 1935150/-.The assessing officer issued notice u/s 148 dated 31.03.2017 calling for reassessment providing the reason to be the source of cash deposits of Rs. 1935150/- with the Saraswat Coop Bank Ltd. during the previous year 2009-10 relevant to assessment year 2010-11 . The assessee contended that there was complete disclosure on the part of the assessee of material facts during the course of assessment and resubmitted the same set of documents .But assessing officer rejected the source of cash deposits of Rs. 1935150/-and disallowance is made due to change in opinion .The Honourable Supreme Court has held in the case of Commissioner of Income Tax Delhi vs Kelvinator of India Liminted 2010 2 SCC 723 that the power to reassessment was no a power of review and that the rule against the change of opinion was as in built safeguard”.
However, ld.CIT(A) noted that nobody appeared before him and assessee remain uncooperative and hence, he confirmed the addition of cash deposit made by the AO.
Against the above order, assessee is in appeal before the ITAT.
I have heard the Ld. DR and perused the records. I find that ld.CIT(A) has not adjudicating the issue of reopening made before him as the assessee was “ un co- operative”. In my considered opinion, ld.CIT(A) has failed to discharge the statutory duties cast upon him. As noted by him in statement of facts, assessee has duly contended that the assessment order was earlier passed u/s. 143(3) of the Act and that an addition u/s. 68 was also done for Rs.1,08,000/-. Thereafter, on information from the Audit Party, the issue was reopened for the assessment for cash deposit in the bank account. The AO in this order has duly given credit for Rs. 1,08,000/- added in the earlier assessment order and thereafter made the addition. In these facts, the decision of Hon’ble Supreme Court in the case of Kelvinator of India Limited (2010) 2 SCC 723 applies on all force. The reopening was not done on the basis of any tangible material received. The entire issue was gone through by the AO earlier. This is simply a review and change of opinion by the AO not permissible under the Act. Hence, on both the counts that ld.CIT(A) has failed to discharge his statutory duties as he has no power to dismiss the appeal for non prosecution and the fact that reopening in this case is bad, I set aside the orders of the authorities below and allow the assesees appeal.
In the result, this appeal by the assessee stands allowed.