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Facts
The Revenue filed an appeal against the CIT(A)'s order deleting an addition of Rs. 49,37,07,350/- made by the AO under Section 69A. The addition was based on cash deposits, which the assessee contended were sales collections from their petrol pump business, and that the addition was wrongly made to their PAN instead of another individual's PAN. The CIT(A) deleted the addition after obtaining a remand report.
Held
The Tribunal held that the proceedings initiated by the AO under Sections 147/148 were based on irrelevant and unconnected facts, as the cash deposits pertained to another individual. The Tribunal found no merit in the Revenue's argument to remit the matter back to the AO and upheld the CIT(A)'s order.
Key Issues
Whether the addition made by the AO under Section 69A was wrongly attributed to the assessee based on unrelated cash deposits, and whether the proceedings under Sections 147/148 were validly initiated.
Sections Cited
69A, 147, 148, 142(1), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
Years: 2017-18 Income Tax Officer, P.Bhuvaneswari, Non-Corp. Ward-22(1), No.2/128A, Braminar Street, Tambaram, Madurantakam, Chennai Chengalpet District, Tamil Nadu - 603 306. [PAN: ARMPB3783A] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : None प्रत्यर्थी की ओर से /Revenue by : Shri Nathala Ravi Babu, CIT सुिवाई की तारीख/Date of Hearing : 05.12.2024 घोर्णा की तारीख /Date of Pronouncement : 22.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed by the Revenue against the order bearing DIN & Order No.ITBA/NFAC/S/250/2023-24/1061269382(1) dated 21.02.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment year 2017-18. Through the aforesaid appeal the Revenue has challenged order u/s 250 dated 21.02.2024 passed by NFAC, Delhi.
Page - 1 - of 5 2.0 The only issue arising in this appeal of Revenue is regarding addition of Rs. 49,37,07,350/- u/s 69A made by the Ld. AO and which has been deleted by the Ld. CIT(A). On the impugned date of hearing there was no attendance from the assessee side.
2.1 It has been noted that there is a delay of 48 days in filing of this appeal by the Revenue. It has been pleaded that the concerned officer was handling additional charges and was overwhelmingly preoccupied with time barring assignments leading to delay in timely filing of this appeal. Upon considering the facts we are satisfied with the sufficiency of reasons and proceed to condone the delay and adjudicate this appeal. 3.0 The Ld. DR informed that the assessee is a non-filer and hence notice u/s 147 r.w. 148 was issued on 31.03.2021. The Ld. AO issued notices u/s 142(1) to the assessee along with questionnaire and show cause but there was no response. The Ld. AO noted from the information provided by the investigation wing that the assessee had deposited an amount of Rs. 49,37,07,350/- . In the absence of no return of income filed by the assessee and sheer non-compliance to the Ld. AO’s notices, addition u/s 69A of the impugned was made.
Page - 2 - of 5 3.1 Before the Ld.CIT(A), the assessee contended that the Ld. AO has made totally wrong addition in her case in as much as information pertaining to one Shri Vellore Subramaniam Arumugam PAN No.AACPA026OE has been considered for addition in her case. It was contended that the local high pitched committee has acknowledged this fact while holding the assessment as high pitched assessment and also directing the Ld. AO to take remedial action in respect of cash deposits to assessee’s account of Rs. 1,81,44,750/-. Before the Ld.CIT(A) it was contended that the assessee is an authorized dealer of Indian Oil Petrol Pump and the cash deposits are its sales collection included in its overall turnover. Considering the directions of high pitched committee and after obtaining remand report from the Ld. AO, the Ld.CIT(A) deleted the addition of Rs. 49,37,07,350/- by declaring the proceedings u/s 147 / 148 as void ab initio.
4.0 We have considered the material on records in the light of arguments put forth by the Revenue. It is the case of the Revenue that the Ld.CIT(A) ought to have considered the cash deposits of Rs.1,81,44,750/- for addition. It was submitted that matter may be remitted back to the file of Ld. AO for consideration of impugned cash deposits of Rs.1,81,44,750/- by the Ld.AO. We do not find any merits in Page - 3 - of 5 the argument of the Revenue. It is an undisputed fact that the proceedings u/s. 147 / 148 were raised in the case of the assessee upon totally irrelevant and unconnected facts and therefore the same cannot be the ground for validating an erroneous and illegal order passed by the Ld.AO. Jurisdiction is the base of jurisprudence. The Ld. AO had initiated proceedings qua the alleged cash deposits of Rs. 49,37,07,350/- which were actually belonging to one Shri Vellore Subramaniam Arumugam PAN No.AACPA026OE, therefore by no stretch of imagination a presumption qua initiation of 147 / 148 proceedings in respect of the present assessee can be drawn. As rightly held by the high pitched committee the Ld. AO was at liberty to initiate remedial action against the assessee qua impugned cash deposits of Rs.1,81,44,750/-. Consequently, the request of the Revenue to remit the file to the Ld.AO cannot be accepted. The Revenue would be at liberty to initiate remedial action against the assessee qua impugned cash deposits of Rs.1,81,44,750/- in accordance with law. Accordingly, we do not find any infirmity of the order of the Ld.CIT(A) and hence conclude that no intervention is required at this stage. Accordingly, all the grounds raised by the Revenue are dismissed.
Page - 4 - of 5 5.0 In the result, the appeal of the Revenue is dismissed. Order pronounced on 22nd, January-2025 at Chennai.