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Income Tax Appellate Tribunal, DELHI BENCHES “SMC-1”: DELHI
Before: SHRI BHAVNESH SAINI
For Assessee : Shri V.K. Goel, Advocate For Revenue : Shri Prakash Dubey, Sr. DR Date of Hearing : 07.01.2021 Date of Pronouncement : 01.02.2021 ORDER This appeal by assessee has been directed against the order of Ld. CIT(Appeals), Meerut dated 22.05.2017 for AY 2009-10.
I have heard Ld. Representatives of both the parties and perused the findings of authorities below.
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Briefly the facts of the case are that no ITR is available in this case. The case was picked up for scrutiny on the basis of AIR information regarding cash deposits in saving bank account by assessee during assessment year under appeal without quoting of his PAN. Notice u/s 148 of the Act was issued on 16.03.2016 after obtaining approval of the Pr. CIT, Meerut and notice was sent through speed post. The notices u/s 142(1) were also issued time to time but the same returned undelivered. Finally on receipts of bank statements from the bank, notice u/s 142(1) read with show-cause notice u/s 144 was issued to the assessee on 11.11.2016 requiring him show-cause as to why ex parte assessment be not made considering the material on record. A Copy of the notice u/s 148 already issued was also served. There was no compliance from the side of the assessee, the AO, therefore, proceeded to pass ex parte reassessment order.
As per bank statement received from the concerned bank, the assessee had deposited cash of Rs. 34,40,225/- in his saving bank account number xxx79716 with Syndicate Bank, Mawana in assessment year under appeal throughout the year. Similarly, there are cash withdrawals also throughout the year and on 31.03.2009, there is balance of Rs. 16,655/- only in the bank account. The AO also noted that there is an interest credited in the bank account of the 3 ITA.No 3873/Del./2017 assessee. In absence of material on record and any reply from the side of the assessee, the AO considered the cash deposits in the bank account as income from undisclosed sources. The AO, accordingly, made addition of Rs. 34,40,225/- including the interest.
The assessee challenged the reopening of the assessment as well as addition on merits before Ld. CIT(A). The assessee contended that no notice u/s 148/142(1) of the IT Act have been served upon the assessee. On merits assessee explained that actually the assessee has made sale deed of Rs. 6,15,000/- on which stamp duty was paid of Rs. 13,40,000/-. The assessee has made two agreements to sale of his agricultural land for Rs. 6,15,000/- and Rs. 6,84,200/-. The cheque was taken and cash was paid by the seller, total sale of land was Rs. 33,28,225/- but the purchaser has written the documents for Rs. 12,99,200/-. The purchaser has misguided the assessee as well as the stamp authorities also. The source of the assessee in bank deposit was out of sale proceeds of agricultural land.
The Ld. CIT(A) on verification of the record found that notice u/s 148 dated 16.03.2016 has been issued after taking approval of the competent authority. It was handed over to postal authorities on 19.03.2016 as per stamp on the 4 ITA.No 3873/Del./2017 envelope. The said envelope was returned on account of incomplete address due to absence of father’s name. Similar is the notice u/s 142(1). The Ld. CIT(A) called for the AO and the assessment record and found that final show-cause notice u/s 142(1)/144 dated 11.11.2016 was issued by post and a copy of notice u/s 148 was also sent and this was done by post giving complete addresses including father’s name. The said notice u/s 142(1) dated 11.11.2016 also mentions that copy of notice u/s 148 was also sent. The notices were sent through postal authorities and the receipt of the postal authority is also available on record. The said notice has been delivered and served upon the assessee. The Ld. CIT(A), therefore, found that condition precedent for serving the notice u/s 148 before completion of the assessment is satisfied because the notice u/s 142(1) and notice u/s 148 dated 11.11.2016 has been served upon the assessee. These grounds of appeal of assessee were dismissed.
The Ld. CIT(A) as regards addition on merit found that assessee has filed mere affidavit of selling the agricultural land for Rs. 34 lakhs but sale consideration is mentioned of Rs. 6,10,500/- only. The Ld. CIT(A) noted that no reliance could be placed upon the same though the assessee filed copy of the sale deed but no application is filed under Rule 46A of IT Rules for admission of the additional evidences, therefore, in 5 ITA.No 3873/Del./2017 absence of any evidence on record to explain cash deposits in the bank account of the assessee, addition on merit was also confirmed and appeal of assessee has been dismissed.
The assessee has preferred the present appeal before the Tribunal.
Before proceeding further it would be relevant to mention settled relevant facts here.
9.1 The assessee on ground no. 1 & 2 has challenged the orders of authorities below that assessment is bad in law because no notice u/s 148 was served upon the assessee. The ITAT ‘SMC Bench’ vide order dated 14.12.2017 held that no notice u/s 148 has been served upon assessee, therefore, assessment is directed to be quashed. Ground no. 1 & 2 of the appeal of assessee were accordingly allowed without deciding the appeal on merits. The Revenue filed Miscellaneous Application No. 141/2018 against the order dated 14.12.2017 passed by SMC Bench. The Revenue explained in the miscellaneous application that the order dated 14.12.2017 is not in accordance with law and there is a factual mistake in the order while quashing the order u/s 148 of the IT Act. It was submitted that notice u/s 148 was issued along with notice dated 11.11.2016 u/s 142(1) read with show-cause notice u/s 144 of the Act, was duly served upon
6 ITA.No 3873/Del./2017 the assessee through speed post before the date of assessment. However, there was no compliance made by the assessee. The Revenue also contended in the miscellaneous application that Ld. CIT(A) also ongoing through the record decided the issue against the assessee that notice u/s 142(1) dated 11.11.2016 was sent along with copy of notice u/s 148 of the Act and have been served upon the assessee, therefore, condition of service of notice u/s 148 before completion of the assessment is satisfied in this case. The Revenue, therefore, contended that since notice u/s 148 has already been served upon assessee prior to the assessment, therefore, the order passed by the Tribunal dated 14.12.2017 deserves to be recalled and appeal of assessee shall have to be decided on merit. The ITAT ‘SMC Bench’ considering the aforesaid MA No. 141/2018 decided the issue based on the record available and record produced by the Ld. DR found the contention of Revenue to be correct that Tribunal has referred to only first notice which was returned un-served but has not considered the subsequent notice dated 11.11.2016 which have been served upon assessee. It was, therefore, found that mistake of fact is crept in the order of the Tribunal dated 14.12.2017, the order dated 14.12.2017 was recalled and appeal was directed to be fixed for hearing fresh on 15.01.2019. The SMC Bench also did not relied upon the judgment of Allahabad High Court cited by the Counsel of assessee because the facts were clearly
7 ITA.No 3873/Del./2017 distinguishable from the facts of the case in hand. The Miscellaneous Application of the Revenue was, accordingly, allowed vide order dated 16.11.2018. The Registry has thus, fixed the appeal of assessee for hearing on merits.
Ld. Counsel for assessee contended on ground no. 1 & 2 that order of the Tribunal in MA dated 16.11.2018 is incorrect. Ld. Counsel for assessee has however, admitted that no appeal has been preferred by assessee against the subsequent order of the Tribunal dated 16.11.2018. Thus, the order dated 16.11.2018 of the Tribunal has become final. Ld. Counsel for assessee further contended that no notice dated 11.11.2016 has been served upon assessee. Since the issue of service of notice dated 11.11.2016 have already been considered by the Tribunal vide order dated 14.12.2017 and 16.11.2018 and the contentions of the Revenue have already been accepted that notice dated 11.11.2016 u/s 142(1) read with show-cause notice u/s 144 containing the notice u/s 148 of the Act was duly served upon the assessee through speed post, therefore, the issue stands finally settled by order of the Tribunal dated 16.11.2018 and, as such, the subsequent Bench would not be sitting in appeal against the order dated 16.11.2018 passed by the SMC Bench. The issue of service of notice u/s 148 has thus, already reached the finality and, as such, there is no need of interference in the findings of the Tribunal in the order
8 ITA.No 3873/Del./2017 dated 16.11.2018. The contention of Ld. Counsel for assessee is thus, devoid of merit and is, accordingly, rejected.
On ground no. 3 to 5 the assessee challenged the addition of Rs. 34,40,225/- as cash deposited in the bank account of the assessee.
Ld. Counsel for assessee did not argue these grounds on merits.
Ld. DR submitted that there is a specific finding of fact recorded by AO based on bank statement of assessee that assessee made cash deposits in his bank account, source of these not explained and assessee throughout remain ex parte, therefore, source of the cash deposit in the bank account is not explained. Ld. DR, therefore, submitted that appeal of the assessee on these grounds may be dismissed.
After considering the submission of the Ld. DR, I am of the view that no interference is called for in the matter. It is not in dispute that assessee made cash deposits of Rs. 34,40,225/- in his saving bank account maintained with Syndicate Bank, Mawana during assessment year under appeal. The assessee did not appear before AO and no source of cash deposits in bank account has been explained through any evidence. Though the assessee appeared before Ld. CIT(A)
9 ITA.No 3873/Del./2017 but no steps have been taken for making a request for admission of the additional evidences. The assessee merely contended that source of the cash deposits in the bank account of assessee is sale proceeds on selling the agricultural land for which no evidence or material were produced before the Ld. CIT(A). The assessee has also not produced any evidence before me to contradict the findings of fact recorded by the authorities below. In absence of any evidence on record and in absence of any argument advanced by Ld. Counsel for assessee during the course of hearing, no interference is required in the orders of authorities below. Ground nos. 3 to 5 of the appeal of assessee are dismissed.
On ground no. 6 it is contended that no addition can be made in view of the judgment of the Allahabad High Court in the case of CIT vs. Intezar Ali 38 taxmann.com 103 as not considered by the Ld. CIT(A). The order of the Ld. CIT(A) shows that Ld. CIT(A) has considered this decision in the impugned order and did not find the same to be applicable in the case of the assessee, therefore, no fault could be found with the order of the Ld. CIT(A) because assessee did not led any evidence before the authorities below. This ground is also dismissed.
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In the result, the appeal of assessee is dismissed.
Order pronounced in the open Court on 01.02.2021.