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Facts
The assessee, a housewife, sold jointly owned rural agricultural land with her children and deposited Rs. 1,22,69,898/- in a joint bank account. The Assessing Officer treated this amount as unexplained income, an addition confirmed by the CIT(A) due to the assessee's failure to substantiate the source of funds despite multiple opportunities.
Held
The tribunal noted the assessee's non-compliance in submitting documents to both the AO and CIT(A). To uphold natural justice, the case was remanded to the Assessing Officer for a de novo assessment, providing the assessee a fresh opportunity to present all relevant documents and materials.
Key Issues
Whether the cash deposit from the sale of agricultural land can be treated as unexplained income without proper verification, and the validity of the notice issued under Section 148.
Sections Cited
148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY
Order Per Krinwant Sahay, AM : Appeal in this case has been filed by the assessee against the order dated 12.07.2024 passed by the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi.
Grounds of appeal are as under:
That the order passed by Learned Assessing officer is illegal, arbitrary has been passed in 1003-Chd-2024 Lakhwinder Kaur, Karnal 2
1. a Haste and has ignored basic aspects and facts of the case, thus causing undue hardship to the Appellant & learned CIT(A) confirms the same. 2) That the all the cash deposited in the bank amounted to Rs. 12000000/- has been received from the sale of jointly owned rural agriculture land but the learned officer taxed all the proceeds as unexplained income of the assessee which is not justified and against the law and natural Justice and CIT(A) also confirms the same. 3) That the bank account in which amount had been deposited is the joint account of the assessee along with her son but the learned officer made the huge addition in the name of the assessee without considering the above the fact which is against the law and natural justice and CIT(A) also confirms the same. 4) That the notice Assessing officer u/s 148 issued on 29.03.2018 was never served. Your Honor. service of notice u/s 148 is a mandatory condition for the initiation of the further proceedings which is not served to the assessee, therefore, all the proceeding is null and void. CIT(A) also confirms the same without serving any notice to the assessee and considering the above fact. 5) That the appellant craves to add, delete, concede, and modify any or all the ground of appeal at the time of hearing of appeal.
1003-Chd-2024 Lakhwinder Kaur, Karnal 3
Brief facts of the case, as per the written submissions filed by the Counsel of the Assessee are as under: -
The Appellant is a house wife. She was the owner of agriculture land jointly with her children. They sold their agriculture land which is not a capital asset and deposit the proceeds amount in their joint account. The case selected in to scrutiny and income of the appellant assessed at Rs. 1,22,69,898/-. The assessing officer has made the addition of Rs. 1,22,69,898/- on account of unexplained income. The addition made by assessing officer is excessive, illegal, and against the provision of law and has been challenged on various grounds on appeal.
The Ld. CIT(A) in his appellate order has given his findings as under:
“7.4 The appellant was given several opportunities to file its submission in support of the claim she has made. However, the appellant has not filed any documents regarding this and remained non-compliant to all the notices issued. Hence, the appellant has failed to substantiate her claim. In the absence of any details, the Assessing Officer was right in treating the cash deposit in the bank account as unexplained
1003-Chd-2024 Lakhwinder Kaur, Karnal 4 money and interest income as income from unexplained sources. 7.5. It is evident that the appellant failed to substantiate its claim during the assessment proceeding. Further, the appellant was given opportunity during appellate proceedings as well to substantiate her claim. The appellant was given several opportunities to file her submission. Hearing notices were issued to the appellant on 24-12-2020, 28-01-2022, 02-12- 2022, 13-10-2023, 15-02-2024, 07-05-2024 and 24-06-2024. However, the appellant has not filed any documents to explain the source of the cash deposited in her bank account and remained non-compliant with all the notices issued. Hence, the appellant failed to explain the source of the cash deposit she made in her bank account. The appellant failed to substantiate her claim at the time of assessment proceedings as well as at the time of the appellate proceedings. Therefore, the claim of the appellant cannot be considered as genuine.”
From the above findings of the Ld. CIT(A), it is clear that the Assessee could not file any details or made submissions before Ld. CIT(A), therefore, the Counsel requested that in the fitness of things matter may kindly be remanded back to the file of the AO.
1003-Chd-2024 Lakhwinder Kaur, Karnal 5
Per contra, the ld. DR relied on the orders of the authorities below.
7. We have considered the findings given by the AO in the assessment order and the Ld. CIT(A) in the appellate order. We find that the authorities below could not evaluate the issue on the basis of merit because the Assessee did not file any detials or submissions in support of its claim. Therefore, keeping in view the element of natural justice to the Assessee and in the fitness of things we remand this matter back to the file of the Assessing Officer for de novo assessment by considering the submissions, documents produced by the Assessee and the relevant material available on record. Needless to say, that the Assessing Officer shall afford due, reasonable and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the Assessing Officer. All pleas available under the law shall remain so available to the assessee. Ordered accordingly.
1003-Chd-2024 Lakhwinder Kaur, Karnal 6
In the result, Assessee’s appeal is allowed for Statistical Purposes.