MALAKENDRAGOUD BASANAGOUD PATIL,BIJAPUR vs. INCOME TAX OFFICER, WARD-3, VIJAYAPUR

The brief facts of the case are that the assessee being an individual had not filed his return of income despite the notice issued u/s. 142(1) of the Act. Based on the information gathered during the operation clean money, the AO had alleged that the assessee had deposited cash of Rs. 10,13,500/- in his Canara Bank account in old currencies. Despite several opportunities granted to the assessee, the assessee had not furnished any AO had treated the said deposits as unexplained money u/s. 69A of the Act. The assessee challenged the said order before the Ld.CIT(A) with a delay of 739 days. The Ld.CIT(A) had not accepted the said delay of 739 days and proposed to decide the appeal on merits also and forwarded the documents filed by the assessee to the AO for his comments and a remand report. The AO also submitted the remand report which was also forwarded to the assessee for his comments. Thereafter, hearing notices were issued to the assessee asking him to file any rejoinder to the remand report furnished by the AO. The assessee had not responded to any of the notices and not filed any rejoinder to the remand report furnished by the AO and therefore the Ld.CIT(A) had dismissed the appeal both on merits and for non-prosecuting the same.

As against the said order, the assessee is in appeal before this Tribunal.

At the time of hearing, the Ld.AR submitted that the transactions carried out during the demonetisation period are the normal transactions carried out by the assessee and also submitted that the assessee is owning agricultural lands of 100 acres and also received agricultural income in cash as well as directly to his bank account. The Ld.AR therefore submitted that the assessee had sufficient source of income for the cash deposits made during the said period. The Ld.AR also filed the application to admit the additional grounds and documents in which the assessee had submitted that the cash deposits arrived based on the information obtained by the department is not correct since the said deposits were made by Shri Basaveshwar Co-operative Credit Society, Muddebihal in which the assessee is holding the post of President. The Ld.AR further submitted that at the time of opening of account to the said society, the PAN of the appellant was provided as an identity proof and therefore based on the said PAN, the deposits could not be attributed to that of the assessee. The Ld.AR further submitted that to ascertain the genuineness of the transactions alleged by AO, the assessee had requested the AO to furnish the details of the bank account to cross verify the same but unfortunately the AO had rejected the said request and therefore prayed that the additional grounds raised may be admitted and orders passed on that basis.

The Ld.DR relied on the orders of the lower authorities and submitted that the additional grounds could not be entertained and prayed to dismiss the appeal filed by the assessee.

We have heard the arguments of both sides and perused the materials available on record.

First we will decide whether the additional grounds raised by the assessee is to be admitted or not. In the additional grounds, the assessee submitted that the information obtained by the department based on the PAN linked with the bank account is not correct since the assessee is the President of the Shri Basaveshwar Co-operative Credit Society, Muddebihal and out of compulsion, he has provided his PAN while opening the bank account and therefore the said details could not be relied on for making the assessment. Further, the assessee contended that to cross verify the details available with the department, he had made a request to the AO to furnish the account details of the cash deposits but unfortunately the AO had rejected the said application. The sole reason for making the assessment is the cash deposits made during the demonetisation period based on the details obtained from the bank. It is the case of the assessee that his PAN was given to the said society in which he is the President, at the time of opening the bank account of the said society and therefore if the department is getting the information based on the PAN linked to the bank account, the assessment is not correct and liable to be set aside.

Even though, these pleas were raised for the first time before this Tribunal by way of additional ground, to arrive a correct conclusion, we have to necessarily consider the said additional grounds and if found that the

By way of filing the additional grounds, the assessee had altogether raised a different plea which were not placed before any of the authorities including the Ld.CIT(A). We have also considered the issue that whether the cash deposits made during the demonetisation period is of the assessee or Shri Basaveshwar Co-operative Credit Society, Muddebihal in which he is the President. If we can ascertain the said facts, the entire assessment made on the assessee could be decided on that basis. But this plea and the additional documents were not furnished before the Ld.CIT(A) to decide the issue. To arrive the correct conclusion, we deem it fit to remit the issue to the Ld.CIT(A) to consider the issue afresh and also the additional grounds and the additional documents filed before us and decide the appeal on merits and in accordance with law after hearing the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes.