SANTOSH CHANDRAHAS WAGHCHAURE,PUNE vs. ITO, WARD14(5), PUNE, PUNE

Under the facts and circumstances of the case and in law, Assessment Order is passed without DIN. Hence not according to procedure established by law, needs to be quashed and set aside.

5. Under the facts and circumstances of the case and in law, Ld Assessing Officer erred in not disclosing and justifying the head of income and the specific section of the Income Tax Act, 1961, under which the addition has been made. Hence addition is not sustainable.

6. Under the facts and circumstances of the case and in law, Ld CIT(A)/NFAC has erred in not considering evidences which was otherwise available with Assessing Officer.

Submission of ld.AR : 2. Ld.AR filed a paper book and written submission. Relevant portion of the written submission is reproduced here as under : “ii. During the assessment proceedings, Show Cause was issued on 1ª December 2019 (Refer Page No. 29 to 31 of Paper Book). Due to health issue assessee could not attend the hearing and accordingly assessee sent adjournment request through Email on 3rd December 2019 (Refer Page No. 32 of Paper Book). Without considering assessee's request for adjournment Assessment is completed on 04th December 2019 before the time Act. As regards Cash Deposited in Indapur Urban Co-op Bank Ltd of Rs 21,36,963/-Account No. 002002025036 It was stated that, actually there was no cash deposit in the Indapur Urban Co-op Bank Ltd. This can be seen from the bank statements which will be with AO at the time of recording his satisfaction. Apparently during the financial year 2011-12 there was only receipts of Rs 14,87,284/- in the said bank account. (Refer Page No 9 of Paper Book) Further, Indapur Urban Co-op Bank Ltd. has issued letter dated 23 January 2020 wherein it is categorically mentioned that there is no cash deposit in assessee's bank account during the Financial Year 2011-12 (Refer Page No 10 of Paper Book). Further, Entry wise credits in were explained in Annexure II (Refer Page No 11 of Paper Book) with supporting documents as to loan certificate and ledger of sugar factory etc. (Refer Page No. 12 to 18 of Paper Book)” Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of AO and ld.CIT(A).

Findings & Analysis : 4. We have heard both the parties and perused the records. The first paragraph of the assessment order is reproduced here as under :

In this case, as per the information in possession of the department, the assessee deposited cash amounting to Rs 10,89,000/- in ICICI Bank Ltd. Also the assessee has made time and cash deposits of Rs.21,36,763/- in Indapur Urban Coop Bank Ltd. Further the assessee have received interest income of Rs 24,112/- & 19,808/- from ICICI Bank Ltd and Janata Sah. Bank Ltd. On the basis of information, the case was selected for reassessment. Consequently, the prior approval of the PR. CIT-6, Pune was taken u/s 151(1) of the Income Tax Act 1961. The notice under section 148 was issued on 28/03/2019 and duly served.

4.1 We observed that it is an exparte assessment order. Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A). Before ld.CIT(A), assessee had raised four grounds of appeal as under :

1. LD A O has mechanically reopened the assessment without coming to an independent conclusion relying on information received from various agencies which was otherwise available with him since beginning. Ld. AO in the Assessment order categorically mentions that "on the basis of information the case was selected for reassessment."

2. In the fact and circumstances of the case, LD A O has grossly erred in relying on the fact that Cash of Rs. 21,36,963/- is deposited in Indapur Urban Co-op Bank Ltd where as there is no such cash deposit in said bank. As the substantial reason believed for reopening of assessment is factually not correct hence assessment is bad in law.

3. In the facts and circumstances of the case and in law, the Ld. AO has grossly erred in making addition on account of Cash of Rs. 10,89,000/- deposited in ICICI Bank and Cash of Rs. 21,36,963/- deposited in Indapur Urban Co-op Bank Ltd. The impugned addition is being bad in law, arbitrary perverse and based on surmises and conjecture the same may please be deleted.

4. The appellant craves the permission to add, amend, modify, revise, substitute, delete or alter any/all of the above grounds of appeal if deemed necessary at the time of hearing of the appeal.”

4.2 The Ld.CIT(A) held as under : “In the light of the above observation and respectfully following the decisions. I am not satisfied with the fresh evidence uploaded at the time of appellate proceedings, since the appellant has not satisfied the conditions provided under Rule 46A. Hence the fresh evidence uploaded is not admitted.

Under the circumstances, considering the case laws and carefully examining the materials available in the system, I am of the considered opinion that the AO has rightly made the addition to the tune of Rs. 32,69,880/- being the unexplained/undisclosed income. Accordingly, the addition made is upheld and the ground raised is dismissed.

Ground No.4:

The appellant craves the permission to add, amend, modify, revise, substitute, delete or alter any/all of the above grounds of appeal if deemed necessary at the time of hearing of the appeal.

The ground raised is general in nature that does not require adjudication.

4.3 Thus, ld.CIT(A) has not adjudicated the basic ground raised by the assessee that assessee has not deposited any cash in Indapur Urban Co-operative Bank Limited. Assessee had filed Certificate from the Bank and copy of the Bank Statements before the ld.CIT(A). However, ld.CIT(A) held that additional evidence filed is not admissible. Ld.CIT(A) failed to understand that the impugned bank statement and the Certificate goes to the root of the issue of cash deposits. It has been pleaded before us also by ld.AR that assessee has never deposited cash in the Indapur Urban Co-operative Bank Limited. However, ld.CIT(A) has not admitted the bank statement as additional evidence. Though ld.CIT(A) is of the opinion that it is an additional evidence, in reality, the entire addition based on the information received by Assessing Officer regarding cash deposits. Assessing Officer in the order has nowhere mentioned that Assessing Officer had obtained the copies of the bank statements from the Banks. The CBDT had directed Assessing Officer to obtain copies of the bank statement in the cases of cash deposits, thus, Assessing Officer has erred in not following the directions of the CBDT.

4.4 It is submitted by Ld.AR that the Assessing Officer has not provided the copies of the reasons recorded for reopening, though the Assessee had asked for it. Ld.AR referred to the email request made by the assessee for reasons.

4.5 The Hon’ble Jurisdictional High Court in the case of Tata Capital Financial Services Ltd., Vs. ACIT 443 ITR 127 gave the following directions : Quote“8. In the circumstances, the Revenue is directed to adhere to the following: (a) While communicating the reasons for re-opening the assessment, a copy of the standard form/request sent by the Assessing Officer for obtaining approval of the Superior Officer should itself be provided to the assessee. This would contain comment or endorsement of the Superior Officer with his name, designation and date. The Assessing Officer shall not merely state the reasons in the letter addressed to the assessee. (b) If the reasons make reference to any other document or a letter or a report, such document or letter or report should be enclosed to the reasons. Such portion as it does not bear reference to the assessee concerned could be redacted. (c) The order disposing the objections should deal with each objections and give proper reasons for the conclusion. (d) A personal hearing shall be given and minimum seven working days advance notice of such personal hearing shall be granted. (e) If the Assessing Officer is going to rely on any judgment/order of any Tribunal or Court reference/citation of these judgment/orders shall be provided alongwith notice for personal hearing so that the assessee will be able to deal with/distinguish these judgments/orders.”Unquote. 4.6 The Hon'ble Bombay High Court in the case of Sahebrao Deshmukh co-op Bank Ltd. vs. ACIT 455ITR 92 has held that AO is duty bound to issue copy of Reasons along with notice u/s.148 of the Act. In these facts and circumstances of the case, we set-aside the order of the Assessing Officer to the Assessing Officer for denovo adjudication. The Assessing Officer shall provide opportunity to the assessee. The assessee shall file all necessary details. The Assessing Officer is directed to provide copies of the reasons recorded as held by Hon’ble Jurisdictional High Court(supra). Accordingly, grounds of appeal raised by the assessee are allowed for statistical purpose.