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Facts
During the demonetization period, the assessee deposited over Rs. 10 lakhs in cash. The Assessing Officer added Rs. 10,01,501/- under Section 144, assuming the deposit was made into an 'Andhra Bank' account. The assessee denied having an 'Andhra Bank' account, claiming the deposits were agricultural income made into his 'Indian Bank' and 'Canara Bank' accounts.
Held
The Tribunal set aside the order of the Ld. CIT(A) and restored the assessment to the file of the AO for a de novo assessment. The AO was directed to share any bank statement from 'Andhra Bank' with the assessee, and the assessee was directed to diligently file documents to prove the agricultural income source of the deposits.
Key Issues
Whether the addition of cash deposits during demonetization was valid given the assessee's denial of an 'Andhra Bank' account and claim of agricultural income as the source, and whether proper opportunity was afforded to the assessee for assessment.
Sections Cited
144, 142(1), 133(6), 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 23.01.2025 for the Assessment Year (hereinafter referred to as "AY”) 2017-18.
At the outset, the Ld.AR of the assessee brought to our notice that the assessment order has been passed without giving opportunity to the assessee. According to the Ld.AR, the assessee was asked source of cash deposits made in assessee’s bank account in ‘Andhra Bank’ during the year under consideration. Finding no response from the assessee, the AO has made the addition of Rs.10,01,501/- by order dated 16.12.2019 u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘).
1. According to the Ld.AR, during the first appellate proceedings, the assessee had brought to the notice of the Ld.CIT(A) that he doesn’t have any account in ‘Andhra Bank’ and had only account in ‘Indian Bank & Canara Bank’ and filed relevant documents & written submissions to explain the source of deposit in his bank accounts was his agricultural income. The Ld.CIT(A) having acknowledged that the assessee filed bank statements in respect to bank accounts maintained with ‘Indian Bank & Canara Bank’ and also explained the source of deposits in it, but found fault with the assessee not giving explanation about the source of SBN’s deposited in his ‘Andhra Bank’ and so was pleased to confirm the action of the AO and dismissed the appeal. According to the Ld.AR, the assessee doesn’t have any account in ‘Andhra Bank’ and hence asking him to prove the negative is impossible. According to the Ld.AR, neither the AO nor the Ld.CIT(A) has given any proof or a copy of the bank statement in the name of assessee in ‘Andhra Bank’. Therefore, the addition made on assumption that assessee was having bank account in Andhra Bank and deposited SBN’s in it was erroneous and the impugned order of the Ld.CIT(A) has been passed without any application of mind. Therefore, for the interest of justice, he prays that the assessment need to be de- novo framed by the AO after giving proper opportunity to the assessee by relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC).
Having heard the Ld.AR and after perusal of the records, it is noted that the AO taking note that the assessee has deposited in his bank account cash of more than Rs.10 lakhs during demonetization period issued notice u/s.142(1) of the Act calling for the RoI, which according to the AO was not responded to by the assessee. Therefore, he issued notice u/s.133(6) of the Act to the ‘Andhra Bank’ and collected the bank statement which showed that there was total credit of Rs.10,01,733/- in the bank account and that cash deposits during the demonetization period was to the tune of Rs.10,01,501/- and the balance credit was only Rs.232/-. Therefore, he added the amount deposited during the demonetization period to the tune of Rs. Rs.10,01,501/- u/s.69 of the Act by framing best judgment assessment u/s.144 of the Act. During the appellate proceedings, the assessee brought to the notice of the Ld.CIT(A) that he is an agriculturalist, who derived income only from agricultural activities and that receipts are in cash. According to the assessee, since demonetization was declared, he deposited the accumulated cash (SBNs) in his savings bank accounts maintained with ‘Indian Bank & Canara Bank’ and to support it, filed bank statement along with written submissions and other documents. The Ld.CIT(A) is noted to have acknowledged that the assessee filed bank statement of ‘Indian Bank & Canara Bank’; but since the assessee failed to give any explanation with respect to source of cash deposits in ‘Andhra Bank’, he confirmed the action of the AO. Before us, the assessee has filed statement of accounts maintained with ‘Indian Bank & Canara Bank’ and asserts that he doesn’t have any bank account in ‘Andhra Bank’ which fact needs clarification. We find that the assessee has filed several documents to prove the nature and source of cash deposits/SBNs as agricultural income, which fact has not been verified by the AO. From a perusal of the assessment order, it reveals that the AO has passed an ex parte order qua assessee without giving proper opportunity to the assessee.
Therefore, relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. (supra), we are inclined to set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO for de novo assessment. The AO is directed to share the bank statement of the assessee supposed to have been received by the AO from ‘Andhra Bank’ u/s 133(6) and dispel the doubt about it. The assessee is directed to be diligent and file all the relevant documents/written submissions to prove the source of SBNs/cash deposit of Rs.10 lakhs in his bank accounts and if the assessee is able to prove that he is an agriculturalist, who derived income from agricultural activities and that receipts from it are in cash and is able to explain the source of SBN’s as agricultural income, then no adverse view to be taken against the assessee. The AO to pass assessment order accordingly, in accordance to law, after hearing the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.