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Facts
The assessee received interest income and made cash deposits which were added to their total income by the Assessing Officer, as the assessee did not file a return of income. The assessee claimed the interest income was below the taxable limit and the cash deposits were made by their husband from his business.
Held
The Tribunal noted a delay in filing the appeals, which was condoned. The appeals were heard together, and the matter was remanded to the Assessing Officer for verification and de novo adjudication. The penalty levied was deleted.
Key Issues
Whether the interest income and cash deposits belong to the assessee and should be taxed in their hands, and whether the penalty levied is justified.
Sections Cited
148, 142(1), 69A, 115BBE, 270A, 271AAC(1), 194A, 207A
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
These three appeals filed by the assessee are directed against different orders all dated 06.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2018-19. The appeal in deals with quantum addition and the appeals in ITA No. 2936 & 2937/Chny/2024 are filed against order under section 207A and 271AAC(1) of the Income Tax Act, 1961 [“Act” in short] respectively.
We find that these three appeals are filed with a delay of 111 days. The assessee filed affidavits for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeals for adjudication.
Since issues raised in these appeals are similar based on the same identical facts, with the consent of the both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience.
First, we shall take appeal in : AY 2018- 19 for adjudication.
At the outset, we note that as per the information available with the Department, the Assessing Officer noted that the assessee is in receipt of interest income amounting to ₹.1,67,720/- from deposits in banks and on the said interest income, TDS under section 194A of the 3 2936 & 2937/Chny/24 Act has been deducted. Since the assessee has not filed the return of income for the AY 2018-19, the Assessing Officer added the interest income to the total income of the assessee under the head “income from other sources”. Similarly, The Assessing Officer noted that the assessee made cash deposits to the tune of ₹.85,40,280/- in his bank account. Accordingly, the Assessing Officer issued notice under section 148 of the Act. However, the assessee failed to response to the notice under section 148 of the Act by way of filing return of income, declaring income for taxation and also there is non-compliance to notices under section 142(1) of the Act issued on several dates and show cause notice issued during e-assessment proceedings. Accordingly, the Assessing Officer assessed total income of the assessee at ₹.87,08,000/- by making addition towards undeclared income earned by way interest receipt of ₹.1,67,720/- as well as cash deposit of ₹.85,40,280/- as unexplained money under section 69A r.w.s. 115BBE of the Act. On appeal, the ld. CIT(A) confirmed the additions made by the Assessing Officer since there was no response from the assessee against the hearing notices issued by the ld. CIT(A).
The ld. AR Ms. Lekha, C.A. submits that the assessee received interest income lesser than the minimum amount required to file income tax return for the AY 2018-19 and the addition made by the Assessing Officer as interest would have been below the taxable limit and attract no tax per se even if the assessee filed her ROI. She further submits the Department erroneously presumed that the cash deposits were made by the assessee and brought to tax, whereas, the cash deposits were made by assessee’s husband out of sales receipts from the medical shop owned by him in the name of J.P. Medicals and were properly accounted and offered to tax by him under his name. There is no case to hold that the cash deposits belonged to the assessee and thus, the ld. AR prayed for deleting the additions.
The ld. DR Ms. R. Anita, Addl. CIT fairly conceded that the matter may be remanded to the file of the Assessing Officer for verification.
Heard both the parties and perused the material available on record. The contentions of the assessee are that the receipt of interest income is lesser than the minimum amount required to file income tax return and also the cash deposits were made by assessee’s husband out of sales receipts from the medical shop owned by him in the name of J.P. Medicals and also accounted and offered to tax in his name. Since the above facts are required to be verified, we remand the matter to the file of the Assessing Officer for de novo adjudication and pass order in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
I.T.A. No. 2936/Chny/2024 for AY 2018-19
This appeal is directed against confirmation of penalty levied under section 270A of the Act. Since the quantum addition did not attain its finality, as we have remitted the matter to the file of the Assessing Officer for de novo adjudication and pass order in accordance with law, the penalty levied under section 270A of the Act and confirmed by the ld. CIT(A) stands deleted.
This appeal is directed against confirmation of penalty levied under section 271AAC(1) of the Act. The provision of section 271AAC of the Act deals with levy of penalty for underreporting of income. Since the income determined by the Assessing Officer requires verification and quantum addition did not attain its finality, as we have remitted the matter to the file of the Assessing Officer for de novo adjudication in accordance with law, the penalty levied under section 271AAC(1) of the Act and confirmed by the ld. CIT(A) stands deleted.