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Facts
The assessee's appeal relates to assessment year 2012-13. The Assessing Officer (AO) reopened the assessment based on information about time deposits and made an addition of Rs. 32,37,294/-. The assessee, an elderly lady, faced personal difficulties and was not conversant with online procedures, leading to non-compliance and an ex-parte assessment. The CIT(A) dismissed the appeal for want of prosecution.
Held
The Tribunal condoned the delay in filing the appeal due to the death of the original assessee and her legal heir's circumstances. The Tribunal found that the AO failed to conduct proper inquiry and analysis regarding the FDRs. The Tribunal held that the assessee has an explainable source for the deposits and no addition was called for.
Key Issues
Whether the addition made by the AO on account of FDRs without proper investigation is sustainable? Whether the delay in filing the appeal should be condoned?
Sections Cited
144, 147, 148, 143(3)
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Income Tax Appellate Tribunal, CHANDIGRH BENCH, ‘SMC’ CHANDIGARH
Before: SHRI RAJPAL YADAV
the order of ld. CIT(Appeals) dated 10.06.2024 passed for assessment year 2012-13. The appeal was presented before the Tribunal on 19.08.2024.
According to the Registry, the appeal is time barred by 10 days. In order to explain the delay, assessee has filed an application. It has been contended in the application that A.Y.2012-13 2 assessment order was made in the hands of Smt. Pavittar Kaur Walia on 19.12.2019. The appeal before the CIT(A) was filed well in time, but Smt. Pavittar Kaur Walia died on 27.05.2021 during Corona and the present appeal has been filed before the ITAT by her Legal Representative. The CIT(A) has not decided the appeal on merit, rather dismissed it for want of prosecution. The appellant could not lay her hand on complete details and due to that reason, assessee could not file the appeal well in time.
With the assistance of ld. Representative, I have gone through the record carefully. A perusal of the record would indicate that a small delay was happened on account of death of the original assessee. The Legal Heir might not be in a position to collect the complete details or ascertain the status of impugned order. Therefore, I condone the delay in filing the appeal and proceed to decide it on merit.
The solitary grievance of the assessee is that ld. CIT(A) has erred in confirming the addition of Rs.32,59,450/-.
The brief facts of the case are that AO has reopened the assessment on the ground that he got an information that A.Y.2012-13 3 assessee has made investment in time deposit to the tune of Rs.32,37,294/- with the Punjab State Co-operative Bank Ltd. The AO, without elaborately investigating the issue treated this information as a gospel truth and made an addition of Rs.32,37,294/- in the income of the assessee. This order was passed ex-parte under Section 144 read with Section
In other words, it is an order passed according to the best judgement of the AO.
The appeal to the CIT(A) did not bring any relief to the assessee, though assessee has filed written submission, which has not been considered by the CIT(A) and it was dismissed for want of prosecution.
The statement of facts filed before me do exhibit the stand of the assessee and therefore, I take note of the relevant part of the Statement of Facts which read as under : STATEMENT OF FACTS
“The assessee Late Mrs Pavittar Kaur Walia received an order u/s 144 r.w.s 147 of the Income Tax Act, 1961 for the A/Y 2012-13 on 30.12.2019 from the Income Tax Officer, Mohali assessing the income of the assessee at Rs. 32,59,450/-. The assessee had not filed her income tax return for the A/Y 2012-13 as, the income of the assessee was below the taxable limit.
As per order u/s 144 proceedings u/s 147 were initiated and notice u/s 148 was issued on 28.03.2019. As per "AO" no compliance was made and subsequent letters issued on A.Y.2012-13 4
19.08.2019, 09.09.2019 and 20.09.2019 and subsequently a show cause notice dated 15.12.2019 issued for 17.12.2019 was also not complied with and ex-parte assessment u/s 144 was framed at an income of Rs. 32,59,450/-, which includes addition on account of unexplained time deposit treated as income from unexplained sources of Rs. 32,37,294/- and interest income of Rs. 22,152/-.
The assesse late Mrs. Pavittar Kaur was an old lady of 68 years retired from Punjab State Co-operative bank in 2008. The assessee has two daughters one then studying in Australia and the second was busy in her own multiple litigations. The assessee's husband died on 10.11.2013 and thereafter she was living at H.No. 387, Phase-IV, Mohali. The assessee after the death of her husband was mentally depressed and was not keeping good health and was suffering from so many problems. The assessee was also not aware and conversant with the technology regarding on line assessment procedure and has not activated her e-mail and income tax account online. The only income she had was interest from FDR made out of her retirement benefits after her retirement in 2008. She was maintaining two bank accounts with Punjab State Co- operative bank A/C No 0003302000004424 and A/C No 0003301000003039. During the year the assessee got the following FDRs renewed which were carried forward from 29.06.2009 after renewals.
FDR No LTD No. CCD 120881 29.06.2011 10,79,781/- FDR No LTD No. CCD 120882 29.06.2011 5,38,866/- On maturity the bank staff made a single combined FDR No 121382 of the above two FDRs for Rs. 16,18,647/- on 29.06.2011 which at the request of the assessee was cancelled on 07.07.2011 and two separate fresh FDRs were made for Rs. 10,79,181/- and 5,38,866/- bearing receipt numbers 121386 and 121385 for 23 months, the maturity of which was due on 29.05.2013.
In the absence of any communication from the assessee, the Assessing Officer added FDR No LTD No. CCD 120881 for Rs 10,79,781/-, FDR No LTD No. CCD 120882 for Rs. 5,38,866/- and again added FDR No 121386 for Rs. 16,18,647/- made after maturing of FDR No 120881 and 120882 (10,79,781/- plus 5,38,866/- plus 16,18,647/-) Rs 32,37,294/- as income of the assessee. The assessee was renewing her FDR made in 2009 only for a sum of Rs. 16,81,647/- and not 32,37,294/- as assessed in the order. All the communications sent to the assessee could not be complied with due to old age, suffering from depression, mental trauma, ill health and not being aware and conversant with the technology regarding on line assessment procedure and non activation of her email and income tax account online.
A perusal of the above facts would reveal that AO has not analyzed the details. He ought to have collected the information from the Bank as to how these FDRs have been made. The assessee has pointed out that after her A.Y.2012-13 5 retirement, she has made deposits with the Bank. The original deposits were made in 2008 and renewed in 2009.
The assessee has given break-up of the history of these facts. Had these details would have been collected by the AO from the Bank, even in ex-parte order, he would not have made the additions, but he has not performed his statutory duties as a quasi-judicial officer and has to play the role of not only prosecutor but of adjudicator also. He should have collected the complete information from the Bank and thereafter find out whether any unexplained money was possessed by the assessee or not but he did not carry out any exercise, therefore, I am satisfied that assessee has an explainable source of deposits in these FDRs and no addition is called for. Accordingly, I allow the appeal of assessee and delete the addition.
In the result, appeal of the assessee is allowed.