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Income Tax Appellate Tribunal, Hyderabad ‘B‘Bench, Hyderabad
प्रति रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), 2 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 National Faceless Appeal Center (NFAC), Delhi, dated 18.12.2024, which in turn arises from the order passed by the Assessing Officer (for short, “A.O”) under Section 144 r.w.s.144B of the Income-tax Act, 1961 (in short ‘the Act') dated 09.12.2022 for the assessment year 2021-22. The assessee has assailed the impugned order on the following grounds of appeal before us:
“1. The order of Ld.NFAC confirming the AO's order is erroneous in law, contrary to facts and probabilities of the case and against the principles of equity, natural law and justice.
The Appellant explained through Affidavit with notary, the reason for non-compliance for notices issued as her husband expired due to long ill health & she is an uneducated house wife and solely dependent on husband including tax matters evidencing the death certificate. The Appellant authority Confirmed the addition simply on the reason that appellant failed to submit before the original authority though the Appellant substantial material evidence in supporting of the grounds urged that the entire investments towards the Residential property through banking channels out of the accumulated balance in the banks and the Cash deposits out of the Agricultural income which is duly disclosed in the return of Income and confirmed the addition without using the powers vested on him is coterminous with that of the AO which is against the settled prepositions
The Appellant explained through Affidavit with notary, the reason for non-compliance for notices issued as her husband expired due to long ill health & she is an uneducated house wife and solely dependent on husband including tax matters evidencing the death certificate. The Appellant authority Confirmed the addition simply on the reason that appellant failed to submit before the original authority though the Appellant substantial material evidence in supporting of the grounds urged that the entire investments towards the Residential property through banking channels out of accumulated balance on which interest disclosed from year to year and the Cash deposits out of the Agricultural income which is duly disclosed in the return of Income and 4. For these and other reasons that may be urged at the time of hearing, the appellant prays the Hon'ble Tribunal to kindly set aside the addition made by Assessing Officer and sustained by CIT(A).” 3 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad[Document title] ITA 1383/Hyd/2024
Shri D.V. Anjaneyulu, Ld. Authorized Representative (for short 'AR') for the assessee, at the threshold of hearing of the appeal, submitted that the present appeal involves a delay of 33 days. Elaborating on the reasons leading to the delay, the ld. AR had drawn our attention to the application, dated 04.02.2023 filed by the assessee seeking condonation of the delay involved in filing of the preset appeal along with his "affidavit”, dt.08.02.2023, (Page 27 to 29 of APB). The ld.AR has submitted that as the delay had occasioned for no malafide reason but for circumstances, which were beyond the control of the assessee, therefore, the same in all fairness be condoned.
Per contra, Shri Sachin Kumar, the Ld. Senior Departmental Representative (for short “DR”) objected to the seeking of the condonation of delay involved in filing of the present appeal by the assessee appellant.
We have heard the learned Authorized Representatives of both the parties on the reasons leading to the delay involved in filing the present appeal. After giving thoughtful consideration, we are of the view that as the delay involved in filing the appeal had crept in for certain compelling circumstances which were beyond 4 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad[Document title] ITA 1383/Hyd/2024 the control of the assessee, therefore, adopting a judicious approach, the same in all fairness merits to be condoned. Our aforesaid view is supported by the recent decision of the Hon'ble Income-Tax Officer, Ward 2, Ambikapur, SLP (Civil) Nos. 26310-26311/3024, dated 31.01.2025. The Hon'ble Apex Court while setting aside the order of the Hon'ble High court of Chattisgarh, which had approved the declining of the condonation of delay of 166 days by the Income-Tax Appellate Tribunal, Raipur, had observed that a justice oriented and liberal approach should be adopted while considering the appellants request for condonation of delay involved in filing of an appeal. Accordingly, the delay of 33 days involved in filing of the present appeal is condoned.
Succinctly stated, the assessee had e-filed her return of income for A.Y. 2021-22 on 30.03.2022, declaring an income of Rs.7,78,240/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act.
As the assessee despite persistent notices failed to participate in the assessment proceedings, therefore, the Assessing Officer was constrained to proceed with and frame the assessment to the best of his judgment vide his order passed u/s 144 r.w.s.144B of the Act, dated 09.12.2022 wherein the income of the assessee was assessed at Rs.1,96,78,240/- after making two fold additions, viz. (i) addition on account of unexplained investments in purchase of two properties u/s 69 of the Act: Rs.1,45,00,000/-; and (ii) addition of unexplained cash deposits in bank account(s) u/s 68 of the Act : Rs.44,00,000/-.
Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success. For the sake of clarity, the observations of the CIT(A) are culled out as under (relevant extract): "The plea of the appellant that she is illiterate and knows only to sign in English or that she is not aware of the laws of the land cannot be accepted. Regarding unexplained investments, the onus/burden of proof lies on the part of the appellant to prove with documentary proof that the investment in its entirety belongs to her. The appellant ought to have proven the same with clinching evidence supported by documentary proof. But here, the appellant failed miserably in all fronts. Regarding cash deposits, the appellant has not come forward to prove with sufficient and reasonable proof to prove that the cash deposited into the bank account(s) indeed belongs to her. As such, the AO was constrained to bring to tax the undisclosed investment and unexplained cash deposits to tax. I find no infirmity in the order of the AO. Therefore, in the light of the above discussions, respectfully following the judicial pronouncements, and carefully examining the materials available in the 6 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 system, the additions made by the AO are sustained and the grounds of appeal are dismissed.”
The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us.
We have heard the learned Authorized Representatives of both the parties, perused the order of the lower authorities and the material available on record as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions.
The Ld. AR for the assessee, at the threshold of hearing, submitted that both the lower authorities had grossly erred in law and facts of the case in making/sustaining the impugned additions, viz. (i) addition towards unexplained investment in properties u/s 69 of the Act: Rs.1.45 crores; and (ii). addition of unexplained cash deposits in bank account(s) u/s 68 of the Act: Rs.44,00,000/-. Elaborating further on his contention, the ld.AR submitted that the properties purchased by the assessee during the year under consideration, viz. (i) Residential house 1-24/170/306 Stonehenge Flat (admeasuring 99.7 sq. yds): Rs.1.05 crores; and (ii) Residential apartment-Stonehenge Flat 504 (admeasuring 67.25 7 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 sq. yds) : Rs.40,00,000/- were purchased by the assessee from her duly explained sources. Carrying his contentions further, the ld.AR had drawn our attention to the submissions which were filed before the CIT(A) wherein complete bifurcated details of the source of investments aggregating to Rs.1.45 crores (supra) were filed before him, (Page 11 of the CIT(A) order). The ld.AR submitted that when the respective payments made by the assessee for purchase of the subject properties were sourced through the duly disclosed banking channels, therefore, there was no justification for the CIT(A) to have brushed aside the said material fact and dubbed the investments as unexplained u/s 69 of the Act.
Apropos, the addition made by the Assessing Officer of the cash deposits made by the assessee in her bank account(s) during the subject year aggregating to Rs.44 lacs (supra), the ld. AR submitted that the assessee had in the course of the proceedings before the CIT(A) furnished the complete details as regards the source of the same. Elaborating further on his contention, the ld. A.R submitted that the subject cash deposits of Rs.44 lacs (supra) were made out of the accumulated corpus/funds available with the assessee which in turn were sourced out of, viz. (i) cash gifts 8 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad[Document title] ITA 1383/Hyd/2024 received by the assessee over the years from her husband Shri Afsar Hasan (PAN No.AAMPH2176A); and (ii) agriculture income derived from 16 acres of agricultural land situated at Village: Malchapur, District: Bidar. The ld. AR submitted that the assessee had during the subject year disclosed agriculture income (gross) of Rs.48,47,010/- which in turn had sourced the subject cash deposits of Rs.44 lacs (supra) in her bank account(s). The Ld. AR to fortify his aforesaid contention had drawn our attention to the land revenue records, open/borewell ownership certificate of the assesseee. Elaborating further on his contention, the ld.AR submitted that the assessee had disclosed agricultural income (net of expenses) of Rs.10,03,372/- in her return of income for the year under consideration. The ld.AR to buttress his aforesaid contention has drawn our attention to the return of income of the assessee for the subject year, Page 9 to 13 of APB. The ld.AR submitted that as the assessee had in the course of the proceedings before the first appellate authority explained the source of cash deposits of Rs.44 lacs (supra) made in her bank account(s) during the subject year, therefore, there was no justification on the latter's part to have brushed aside the said material aspect and summarily dubbed the 9 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad[Document title] ITA 1383/Hyd/2024 same as unexplained cash credits within the meaning of Section 68 of the Act.
Per contra, the Ld. DR relied upon the orders of the lower authorities. The Ld. DR submitted that as the assessee had failed to substantiate to the hilt the source of the investments in properties and also the cash deposits in her bank account(s), therefore, both the lower authorities have rightly made /sustained the respective additions.
We have thoughtfully considered the contentions advanced by the learned Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities.
Apropos the addition made by the Assessing Officer qua the investments of the assessee towards purchase of immovable properties, viz. (i) Residential house 1-24/170/306 – Stonehenge Flat (admeasuring 99.7 sq. yds): Rs.1.05 crores; and (ii) Residential apartment-Stonehenge Flat 504 (admeasuring 67.25 sq. yds): Rs.40,00,000/-, we find that as the assessee had failed to come forth with any explanation as regards the source of the same in the course of the assessment proceedings, therefore, the Assessing 10 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 Officer in absence of any explanation was constrained to treat the same as unexplained investments. At the same time, we find that the assessee in the proceedings before the CIT(A), had vide her “written submissions” filed in the course of the proceedings before him exhaustively explained the source of the respective investments made by her towards purchase of the aforementioned properties; which for the sake of clarity are culled out as under : (relevant extract) "
Subject to above, on merits there are two additions made by AO viz.,
1 Addition of Rs.1,45,00,000/- being investment in House Property 4.1.1 During the year under consideration, appellant has purchased two flats, Flat No. 306 & 504, Stonehenge Apartments, Pebal City Road, Snehita Hill, Peeran Cheruvu, Hyderabad – 500086 for Rs.1,05,00,000/- and Rs.40,00,000/- respectively. The details are as under: Details of Payment made towards purchase of flat Flat No.504, Stonehenge Apartments From the Bank A/c. of Date Bank Amount (Rs.) Sanah Begum 01.10.2020 Bank of Baroda – A/c.No.040 10,00,000.00 Sanah Begum 06.11.2020 Bank of Baroda – A/c.No.806 30,00,000.00 Total 40,00,000.00 Flat No.306, Stonehenge Apartments From the Bank A/c. of Date Bank Amount (Rs.) Sanah Begum 19.10.2020 Bank of Baroda A/c.No.040 15,00,000.00 Sanah Begum 04.11.2020 Bank of Baroda A/c.No.806 25,00,000.00 Syed Afsar Hasan 11.12.2020 HDFC A/c.No.290182 65,00,000.00 Total 1,05,00,000.00"
Ostensibly, the CIT(A) had though culled out the aforesaid submissions/explanation of the assessee that were filed in the course of the proceedings before him, but he had failed to deal with the same and had summarily approved the order passed by the Assessing Officer. We are unable to concur with the manner in 11 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 which CIT(A) had brushed aside and disregarded the explanation of the assessee as regards the source of the investments made by her in the respective properties during the subject year. We are of the view that as the assessee had before the first appellate authority come forth with an explanation as regards the source of the respective investments made in the subject properties, therefore, the latter ought to have deliberated upon the same instead of adopting an evasive approach and summarily discarding the same.
Apropos, the addition of cash deposits of Rs.44,00,000/- made by the Assessing Officer u/s 68 of the Act, we find that the subject cash deposits were made in the two bank accounts held by the assessee during the year under consideration, as under :
| Account No. | Date | Description | Amount deposited | |---|---|---|---| | 18090100014806 | 19.10.2020 | By Cash | 5,00,000 | | | 20.10.2020 | By Cash MEN | 8,00,000 | | | 29.10.2020 | By Cash | 8,00,000 | | | 04.11.2020 | By Cash | 5,00,000 | | 18090100010040 | 19.10.2020 | By Cash | 9,00,000 | | | 20.10.2020 | By Cash | 1,00,000 | | | 04.11.2020 | By Cash | 8,00,000 | | G.Total | | | 44,00,000 | 12 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad[Document title] ITA 1383/Hyd/2024
Admittedly, as it is a matter of fact borne from record that neither had the assessee participated in the assessment proceedings; nor the bank statements that were requisitioned u/s 133(6) of the Act, dated 21.11.2022 by the A.O. from the bank were ever made available to him, therefore, the Assessing Officer was constrained to hold the entire amount of subject cash deposits as unexplained cash credits within the meaning of Section 68 of the Act.
On appeal, it transpires that the assessee had vide her “written submissions” stated before the CIT(A) that the subject cash deposits were sourced from the same proceeds of her agricultural produce (gross) of Rs.48,47,010/-. The assessee in order to fortify her claim had submitted before the CIT(A) that she was carrying out agricultural activities on 16 acres of land at Village Malchapur, District: Bidar, viz. (i) cashew plantation on fourteen acres; and (ii) Palm Oil farming on two acres. Accordingly, the assessee had before the CIT(A) come forth with an explanation qua the source of the cash deposits of Rs.44 lacs (supra) in her bank account(s) during the subject year. For the sake of clarity, the submission of the assessee as regards the source of cash deposits of Rs.44 lacs 13 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad[Document title] ITA 1383/Hyd/2024 (supra) as were filed by her before the CIT(A) are culled out as under (relevant extract): "4.2.4 As from above, it is clearly evident that appellant has offered Gross Agricultural Receipts of 48,47,010/- which includes cash deposit of Rs. 44,00,000/. Appellant has 16 acres of land in Malchapur Village, Bidar District wherein about 14 acres are under cashew plantation and 2 acres under palm oil farming. Further appellant has incurred expenditure of Rs.38,43,638/- (which was inadvertently shown as agriculture loss in ITR) and offered a net agricultural income of Rs.10,03,372/-. The Copy of evidence of Agriculture land with due authentication by respective authorities is attached herewith (Annexure 5). However, AO has not even gone through the ITR filed and proceeded to mechanically make the addition without due application of mind. 4.2.5 Thus the addition of cash deposits of Rs.44,00,000/- as unexplained deposits u/s 69 is not in accordance with law and facts and is to be deleted as the same was already offered to tax and making addition u/s 69 tantamount to double addition. From the above factual matrix, the appellant provided substantial material unimpeachable evidence with treasures of documentary evidence, wherever necessary. providing the identity,. credit worthiness and genuineness of the transactions and therefore we plead the Hon'ble CIT(A) to kindly delete the additions made by AO contrary to the provisions of the act and the facts of the case"
Ostensibly, the CIT(A) had though in his order culled out the aforesaid submissions of the assessee but had without giving any reason failed to deal with the same. Once again, we are of a firm conviction that the failure on the part of the CIT(A) to deal with the assessee's explanation as regards the source of the cash deposits of Rs.44 lacs (supra) cannot be endorsed on our part. We, thus, are of the view that the matter in all fairness requires to be restored to the file of CIT(A) with a direction to re-adjudicate the same. 14 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 Needless to say, the CIT(A) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee.
Resultantly, the appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations. 12 मार्च, 2025 को खुली अदालत में सुनाया गया आदेश। Order pronounced in the Open Court on 12th March, 2025. (मंजूनाथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 12.03.2025. (रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER **TYNM/sps 15 Sanah Begum Vs. DCIT, Circle -3(1), Hyderabad [Document title] ITA 1383/Hyd/2024 आदेशकी प्रतिलिपि अग्रेषित/