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Income Tax Appellate Tribunal, DELHI BENCH: ‘ SMC’ NEW DELHI
Before: MS SUCHITRA KAMBLE, & SHRI PRASHANT MAHARISHI
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 30/05/2017 passed by Income Tax Office, Noida, for Assessment Year 2014-15.
The grounds of appeal are as under:- (Additional Grounds) 1(i)That on facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding addition of Rs. 10,80,000/- u/s 68 on account of unexplained deposit in the bank even though same is illegal and without jurisdiction. (ii) That the case having been selected for limited scrutiny as per CASS guidelines on the ground of large agricultural income in the ITR, the impugned addition of cash deposit in the bank account without converting the case into complete scrutiny or taking approval of superior authority is invalid and void- ab-initio.” GROUNDS 1. That the impugned Assessment order passed by the Ld. AO is bad in law, wrong on facts and against the Principal of natural justice hence is unsustainable. That the impugned Assessment order passed by the Ld. AO is wrong, having no base and against the circumstance of the case.
2. Ld. Assessing Officer and Ld. CIT(A), had passed order u/s 144/147 and 250 respectively without providing an opportunity of being heard.
3. That on facts and circumstances of the case and in Law, the assessing officer had erred in assessing the income tax of the appellant at Rs.12,96,770 /-, please be deleted.
4. That the Ld. Assessing Officer and Ld. CIT (A) had erred on facts that, assessee is farmer and earns his income from agriculture and assessee had also received compensation and assessee deposited these amounts in his saving account during the year.
5. That the Ld. Assessing Officer and Ld. CIT (A) had erred on facts that, assessee had deposited Rs. 10,80,000.00 in his saving account, that amount was given by his son Shri Kailash Chand 6. That the Ld. Assessing Officer and Ld. CIT (A), had erred on facts that, assessee had agriculture income of Rs. 2,09,386.00, assessee has received notice for non-filing of income tax return in response to that he has filed his return of income, declaring his agricultural income of Rs. 20,93,870.00 wrongly, After that he realized that one digit was wrongly written in his return of income, he has submitted his submission regarding his mistake in return of income before Ld. Assessing Officer and Ld CIT(A).
7. The addition made by the A.O. is devoid of any merits and is away from the factual matrix of the case and based on just an imagination and on flimsy ground. Submission was not made by the assessee because opportunity of being heard had not been provided.
8. The assessment order is therefore illegal being in violation of the principal of natural justice and unsustainable in law.
That the impugned assessment order is arbitrary, illegal, bad in law in violation of rudimentary principal of contemporary jurisprudence. That the provisions of section 271(1) (C) is not applicable in the case of the applicant.
That the impugned Assessment order passed by Ld. Assessing Officer, Noida is a clear cut case of misunderstanding and wrong interpretation of Law
The assessee is a farmer. The assessee filed e-return on 22/3/2016 declaring total income at NIL and showing agricultural income of Rs.20,93,870/-. The case was selected for Limited Scrutiny through CASS as per notice under Section 143(2) of the Income Tax Act, 1961 dated 02.08.2016 in respect of agricultural income. The Assessing Officer made an addition of Rs.10,80,000/- in respect of cash deposits.
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The Ld. AR submitted that this is a case of limited scrutiny in respect of agricultural income and thus the addition in respect of cash deposit is not just and proper. Therefore, the assessment itself is void ab initio. The Ld. AR submitted the Notice under Section 143(2) of the Act wherein it is mentioned that it is for Limited Scrutiny in respect of agricultural income. The Ld. AR also relied upon the Instruction No.20/2015 and Instruction No. 7 of 2014 issued by the CBDT. The Ld. AR also submitted the RTI reply dated 26.09.2019 from the Revenue wherein it is stated that it was limited scrutiny case and the issue is related to large agricultural income.
The Ld. DR objected the additional ground and submitted that this is not a limited scrutiny but a regular scrutiny and Assessing Officer rightly made addition of cash deposit.
We have heard both the parties and perused the material available on record. It is pertinent to note that the Assessing Officer has categorically pointed out that the case is selected for scrutiny on the basis of large agricultural income. But as regards to cash deposits, there is no scrutiny by the Assessing Officer which can be seen from the notice u/s 143(2) dated 2/8/2016. But the addition was made on the basis of cash deposits. In-fact, the RTI reply dated 26/9/2019 also stated that this aspect of cash deposits was not at all in the scrutiny process. As per Instruction No. 7/2014 issued by the CBDT, in limited scrutiny cases, if the Assessing Officer has to conduct comprehensive scrutiny, then the Assessing Officer has to take approval of the Pr. CIT/DIT concerned and such an approval shall be accorded by the Pr. CIT/DIT in writing after being satisfied about merits of the issue(s) necessitating wider and detailed scrutiny in the case. Cases so taken up for detailed scrutiny shall be monitored by the Jt. CIT/Addl. CIT concerned. Therefore, the Assessing Officer acted beyond the scope of the scrutiny without the prior approval from the proper authorities which is not at all permissible under the Income Tax Act. Thus, the Assessment order itself becomes bad in law and void-ab-initio. The additional grounds of appeal of the assessee are allowed. Therefore, there is no necessity to adjudicate the other grounds. The Appeal of the assessee is allowed.
8. In result, the appeal filed by the assessee is allowed. Order pronounced in the Open Court on 11th March, 2020.