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Facts
The assessee failed to file her return of income for AY 2017-18. The Assessing Officer (AO) observed cash deposits totaling Rs.13,85,690 in her bank account during the period 09.11.2016 to 30.12.2016. Despite notices, the assessee did not respond, leading the AO to make additions under Section 69A and tax under Section 115BBE.
Held
The Tribunal condoned the delay in filing the appeal due to the assessee's medical condition. The Tribunal noted that the assessee claimed the cash deposits were only Rs.2,50,000 and other credits were from known sources like salary and interest. However, since these evidences were not fully furnished or verified before the AO and CIT(A), the matter was set aside for de novo verification by the AO.
Key Issues
Whether the entire bank credits are to be treated as unexplained cash deposits without proper verification of source and evidence, and if so, whether the matter should be restored to the AO for de novo adjudication.
Sections Cited
139, 142(1), 133(6), 144(1), 69A, 115BBE, 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad SM ‘B’ Bench, Hyderabad
Before: Shri Laliet Kumar & Shri Manjunatha G.
(निर्धारण वर्ा/Assessment Year: 2017-18) Patloth Laxmi Vs. Income Tax Officer Hyderabad Ward-9(1) [PAN :ADJPL4782E] Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri S.Rama Rao, AR रधजस् व द्वधरध/Revenue by: Shri Srikanth Reddy Y., DR सुिवधई की तधरीख/Date of hearing: 20/01/2025 घोर्णध की तधरीख/Date of 03/02/2025 Pronouncement: आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 08.01.2024 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], National Faceless Appeal Centre (NFAC), Delhi , pertaining to A.Y.2017-18.
At the outset, it is observed that the appeal has been filed with a delay of 270 days. The assessee filed an affidavit for condonation of delay and submitted that the assessee underwent a heart surgery and she was advised bed rest upto the last week of December 2024. The assessee submitted a medical certificate in proof and pleaded that the delay in filing the appeal before the 2 ITA 1382/Hyd/2024 Patloth Laxmi Tribunal was due to the circumstances beyond the control of the assessee, which are neither intentional nor deliberate. She, therefore, pleaded to condone the delay and admit the appeal for hearing in the interest of justice.
The Ld.DR on the other hand has not raised any objection.
We have heard both the parties, gone through the affidavit and medical certificate filed by the assessee for condonation of delay of 270 days. We find that there is a reasonable cause for the assessee to file the appeal belatedly, hence, we condone the delay of 270 days in filing of the appeal before the Tribunal and admit the appeal for adjudication in the interest of justice.
The brief facts of the case are that the assessee is an individual, had not filed her return of income for the A.Y.2017- 18, within due date u/s 139 of Income Tax Act, 1961 (“the Act”). As per the information available with the Income Tax department, the assessee had deposited cash of Rs.10,45,776/- during the period from 09.11.2016 to 30.12.2016 in her bank account bearing No.62088582199 with State Bank of Hyderabad branch. The Assessing Officer issued notice u/s 142(1) of the Act dated 12.03.2018 and called upon the assessee to file return of income. The assessee did not respond to the notice. Further, the Assessing Officer obtained bank account statement of the assessee, by issuing notices u/s 133(6) of the Act. Since the assessee has not responded to the notice u/s 142(1) of the Act,
3 ITA 1382/Hyd/2024 Patloth Laxmi the Assessing Officer issued show cause notice/s 144(1) on 06.12.2019 and called upon the assessee to explain, as to why addition should not be made towards total cash deposits of Rs.13,85,690/- u/s 69A of the Act, as unexplained money and bring to tax u/s 115BBE of the Act. Since, no response from the assessee, the Assessing Officer made addition of Rs.13,85,690/- u/s 69A of the Act and assessed u/s 115BBE of the Act.
Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A), the assessee submitted that the Assessing Officer is erred in treating the entire credits in bank account as cash deposits, even though the cash deposited during the period referred to by the Assessing Officer was only at Rs.2,50,000/-. The assessee also explained other credits in the bank account, out of income from salary, interest income, maturity of post office savings deposit and the chit amount received from Shriram Chits. The Ld.CIT(A), after considering the relevant explanation of the assessee, observed that although the assessee claimed various sources of income, but no evidences have been filed to justify the arguments. Therefore, rejected the explanation of the assessee and sustained the additions made by the Assessing Officer towards cash deposits u/s 69A of the Act.
Aggrieved by the order of the Ld.CIT(A), the assessee is now in appeal before the Tribunal.
4 ITA 1382/Hyd/2024 Patloth Laxmi
Shri, S.Rama Rao, Advocate, the learned counsel for the assessee, submitted that the Ld.CIT(A) is erred in sustaining the additions made by the Assessing Officer towards cash deposits, even though the assessee has explained the total credits in the bank account, out of various sources of income, including salary income, interest income, maturity proceeds of post office savings account and chit amount received from Shriram chits. The learned counsel for the assessee further submitted that although the Assessing Officer observed that the total cash deposits in the bank account is Rs.13,85,690/-, but the fact remains that the assessee has only made cash deposit of Rs.2,50,000/- for the period from 09.11.2016 to 30.12.2016. Therefore, he submitted that the matter needs re-examination, in light of various evidences filed by the assessee and thus, the issue may be set aside to the file of the Assessing Officer for further verification and decide the issue in accordance with law.
Shri Srikanth Reddy, the Ld.Sr.AR, on the other hand, supporting the order of the Ld.CIT(A), submitted that the assessee could not file any evidences, in support of the argument of source for cash deposits and other credits in the bank account. Although the assessee claims to have received amount from Shriram Chits towards chit payment, but no evidence has been filed. The Ld.CIT(A) after considering the relevant arguments, has rightly sustained the additions and their order should be upheld.
5 ITA 1382/Hyd/2024 Patloth Laxmi
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. Admittedly, the proceedings before the Assessing Officer are ex- parte. The assessee neither appeared nor filed any details, which is evident from the order passed by the Assessing Officer u/s 144 of the Act. Further, the assessee claims to have filed various evidences, in support of credits in the bank account, including cash deposited during the demonetization period. According to the assessee, the observation of the Assessing Officer, with regard to the cash deposit of Rs.13,85,690/- is incorrect, because during the entire financial year 2016-17, the assessee has made cash deposit of Rs.2,50,000/- only, that too on 11.11.2016. We find that the assessee has filed copies of bank statement for relevant period and as per the bank account statement of the assessee, there are credits like salary, interest income and other credits. We further note that the assessee made only one cash deposit of Rs.2,50,000/- during the demonetization period. Except this, there was no cash deposit for the entire financial year. Therefore, in our considered view, the observation of the Assessing Officer that the total credits in the bank account are cash deposits and the assessee could not explain sources for the cash deposits is incorrect. Further, the assessee had also explained other credits with known sources of income like, maturity proceeds of post office deposits and receipt of chit subscription. Although these evidences have been filed before the CIT(A), but the Ld.CIT(A) ignored the details filed by the assessee and sustained the 6 ITA 1382/Hyd/2024 Patloth Laxmi additions made by the Assessing Officer. Since the assessee could not furnish relevant evidences to the Assessing Officer for verification and further for the first time, the assessee has filed certain evidences before us, which cannot be verified from our end. Therefore, we are of the considered view, the issue needs to go back to the file of the Assessing Officer for further verification. Thus, we set aside the order of the Ld.CIT(A) and restore the issue back to the Assessing Officer with a direction to reconsider the issue denovo, in accordance with law, after providing reasonable opportunity of hearing to the assessee.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 3rd February, 2025.