LALJI YADAV,LUCKNOW vs. INCOME TAX OFFICER- 6(2), LUCKNOW

(A) This appeal has been filed by the assessee against the order of the ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi dated 14.10.2024 for the assessment year 2015-16. The appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. The appellant assessee has filed application for condonation of delay. The application for condonation of delay is supported by an affidavit of the assessee. The Ld. Sr. Departmental Representative for Revenue did not express any objection to the delay being condoned. Being satisfied with the reasons stated in application seeking condonation of delay in filing of this appeal; we condone the delay in filing of this appeal and admit the appeal for decision on merits.

(B) In this case, the assessment order dated 28.12.2017 was passed u/s 143(3) of the Income Tax Act, 1961 (“Act”, for short)

Page 2 of 11 whereby the assessee’s total income was assessed at Rs.83,81,210/- as against the returned income of Rs.4,56,210/-. In the said assessment order, additions amounting to Rs.75,00,000/- (on account of deposit in bank account), Rs. 2,00,000/- (on account of deposit in bank account) and Rs.2,25,000/- (being assessee’s claim for agricultural income rejected by the Assessing Officer) were made by the Assessing Officer. The assessee’s appeal was dismissed by the Ld. CIT(A) vide impugned appellate order dated 14.10.2024 of the Ld. CIT(A). The relevant portion of the impugned order of the Ld. CIT(A) is reproduced as under: - “3. During the course of appellant proceeding, the hearing in this case was fixed on various dates and e-notices were issued to the appellant, which are tabulated as below: Sr. Date of notice Compliance due Remarks No date 1 28.12.2020 12.01.2021 No response in ITBA system 2 14.05.2024 20.05.2024 No response in ITBA system 3 27.05.2024 03.06.2024 No response in ITBA system 4 05.06.2024 12.06.2024 No response in ITBA system 5 23.07.2024 31.07.2024 Adjournment request through ITBA system on 30.07.2024 & 31.08.2024 6 20.09.2024 27.09.2024 Adjournment request through ITBA system on 26.09.2024 7 30.09.2024 07.10.2024 Adjournment request through ITBA system on 07.10.2024 4. It is important to mention here that the appellant had filed appeal on 01.02.2018 and even after the lapse of more than 6 year and 8 months from the month of filing of appeal, the appellant has not furnished any submission related to his appeal. However, the appellant vide his letters dated 30.07.2024, 31.08.2024, 26.09.2024 & 07.10.2024 only filed adjournment repeatedly. 4.1 In respect of non-compliance, reliance is placed on the decision of the Hon'ble Supreme Court in the case of CIT vs. B.N. Bhattacharjee and others [1979] 10 CTR 354 (SC), wherein the Hon’ble Apex Court has observed that preferring an appeal, means effectively pursuing it. 4.2 Reliance is further placed on the decision of the Hon’ble Gujarat High Court in the case of Principal Commissioner of Income Tax vs Ashokji Chanduji Thakor Tax Appeal Nos.710 to 714 & 717 of 2018). In the said case, the Hon’ble Gujarat High Court has held that in case of failure of filing any reply despite several opportunities accorded by the AO and Commissioner of Income Tax (Appeals), CIT(A) had rightly considered the material on record and confirmed addition and Order passed by the Hon'ble Tribunal setting aside order of Commissioner of Income Tax (Appeal) without giving any cogent reason was arbitrary and unreasonable. For the sake of ready reference, relevant extract of the judicial pronouncement "rendered by the Hon'ble High Court in the said case is reproduced below: “8. It is required to be noted that in the present case right from very beginning @. assessment proceeding, assessee was non cooperative. Number of Opportunities were given by the AO, however assessee did not cooperate and even did not file any reply. Therefore, considering the material on record, the AO made addition as unexplained investment. Even before the learned Ci T(A) also the assessee was non cooperative. Number of opportunities were given to the assessee to represent his case, however none remained present on behalf of assessee. Thereafter; the learned CIT(A) proceeded further with the appeal ex-parte and decided the appeal on merits and confirmed the order passed by the AO confirming additions of unexplained investment. Thus, even learned CIT(A) also decided the matter-on merits. On going through the orders passed by the AO as well as learned CIT(A), we are of the opinion that in absence of any explanation by the assessee on the investment in question, AO was justified in making the addition of unexplained investment and thereafter learned CIT(A) was justified in confirming the same. Therefore, even the order passed by the learned CIT(A) which was on merits was not required to be interfered with by the learned ITAT and ought not to have been quashed and set aside without assigning any reasons. Under the: circumstances, the impugned orders passed by the learned Tribunal cannot be sustained.

4.3. Further, the Hon’ble Apex Court has dismissed the SLP filed by Shri Ashokji Chanduji Thakor vide [2021] 130 taxmann.com 131 (SC) [2021] 28 Taxman 307 (SC)[26-07-2021]. 4.4 Further, reliance is also placed on the decision of the Hon'ble High Court d Madhya Pradesh in the case of Estate of Late Tukojirao Holkar Vs. CW [1979 223 ITR 480 (M.P.), wherein the Hon'ble High Court has dismissed the reference’ filed at the instance of the assessee for default and for not taking necessary steps The Hon’ble High Court held that Following the decision in Jamunadas v. CST [1993] 38 MPLJ 462 wherein it was held that if the party at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps preparation of the paper books so as to enable hearing of the reference, the High Court is not bound to answer the reference. 4.5 In view of the above judicial pronouncement of the Hon'ble Apex Cou and Hon’ble High Court, the appeal filed by the appellant is decided on the basis of material available on record.

no. 1 to 4, 6, 7 & 9 are general in nature ang the appellant has not filed any specific submission during the course of appellate proceedings hence these grounds are not liable to be adjudicated, hence dismissed. The ground of appeal no. 5 & 8 are interlinked, which is against the action of the AO, hence these have been dealt together.

7. I have considered the facts of the case/assessment order. The facts of the case, as perused from the order of the AO are that the assessee had filed his original return of income u/s.139(1) of the Act on 15.02.2017 declaring total income at Rs.4,56,210. The case was selected for limited scrutiny through CASS. Accordingly, digitally signed notice u/s 143(2) of the Act dated 22.09.2017 was issued through ITBA module as well as speed post on 23.09.2017. This case was received on transfer in AO's office. Consequent upon change in incumbent, notice u/s 142(1) of the Act on various dates along with questionnaire was issued to the assessee. No compliance was made by the assessee nor any written submission was received by AO's office. Meanwhile notice u/s 133(6) of the Act dated 13.11.2017 was issued to Branch Manager, SBI, Secretariat Branch, Lucknow calling for information assessee’s bank statements etc., which was furnished by the bank and same was placed on record and perused by the AO. It is noteworthy to point out that the case was selected for limited scrutiny. The assessee has failed to comply with the notices issued and also failed to furnish details/documents as required from time to time during the course of assessment proceedings, therefore, for proper verification and investigation to ascertain its sources and assess the income of the assessee correctly, the approval for conversion of the case from limited to complete scrutiny was obtained from the competent authority. Thereafter, a detailed query letter along with notice u/s 142(1) of the Act dated 08.12.2017 was issued to the assessee, Wherein the assessee was specifically asked to justify the transactions reflected in bank accounts and furnish all the details/documents/information supported with documentary evidences as claimed in his ITR. On perusal of the bank statement, (SB Account No.21401524533) of the aSsessee maintained with ICICI Bank Ltd. Gomti Nagar Branch, Lucknow, it was observed by the AO that an aggregate amount of Rs.92,00,000/credit/debit entries reflected in the assessee’s bank account, in which the assessee receives funds from Several sources during the year under consideration. Since, no compliance was Made in lieu of the notices issued u/s 142(1) on various dates, with proper, cogent, and valid evidence/documents to support and validate these transactions, which was reflected in his bank account. 7.2 It is noteworthy to mention here that the assessee filed his RO! for AY 201516 after the demonetization period on 15.02.2017. He filed his last ROI for 2011-12 °n 17.01.2012 and no ITR was filed thereafter for the intervening period before "Monetization. Further, as per transaction details provided by Bank for ®Monetization period and assessee’s response thereof. It is noted that the assessee ad deposited cash amounting to Rs.1,60,00,000/- (80,00,000 + 80,00,000) in ICICI Bank, Gomti Nagar, Lucknow between 9" November to 30° December, 2016 4 the assessee stated that Rs.2,00,000/pertains to earlier income or saving. AO’s query letter dated 08.12.2017 the assessee was specifically asked, Substantiate his claims of Rs.2,00,000/- with documentary evidences, on occasion the assessee failed to justify the same. Therefore, in absence of a proper, cogent, and valid evidence/document produced by the assessee the amount of Rs.2,00,000/had been added by the AO to the total income of the assesse Further, in ITR, the assessee has shown Rs.2,25,000/as agriculture income. Va AO’s query letter dated 08.12.2017 (annexure to notice u/s 142(1) of the Act date 08.12.2017) the assessee was specifically asked to furnish khasra khatauni f verification of land holding and details of agriculture produce, proof of sale, agriculture produce, mode of payments/receipts etc., but on this occasion also the assessee failed to furnish any details and documentary evidences. Therefore, in absence of any proper, cogent, and valid evidence/document produced by the assessee the amount of Rs.2,25,000/- had been added by the AO to the total income of the assessee. 8. in this regard, it is pertinent to mention here that during the course ¢ appellate proceedings, the appellant has not filed any written submission after issuing various notices u/s.250 of the Act as mentioned in para 3 of the order. 8.1 In the instant case, it is observed that the appellant had not filed his origin return of income u/s.139(1) of the Act despite having huge deposits including ca and other than cash in his bank account(s). It is further observed that despite issuance of various notices by the AO, the appellant had not filed any plausible explanation with documentary evidence of the source of deposits included cash and other than cash in his bank accounts as mentioned in assessment order. 8.2 Further, it is also relevant to mention here that the appellant has also not furnished any explanation with supporting evidences in support of h’ claim or to explain the said deposits in his bank accounts during the course? appellant proceedings. It clearly shows that the appellant is not in position! explain the source of the said cash deposit with supporting evidences important to note here that it was the prime responsibility of the appellant to explain the nature and source of cash deposits in his bank account(s) with necessity supporting evidences. However, the appellant has completely failed to discharge onus as per law. 8.3 Moreover, section 69A of the Act deals with Money etc. owned by the assessee and found in possession including in the bank accounts of the assessee which remained unexplained. section 69A — Unexplained Money “Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the 4 Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.]” 8.4 In the present case, the assessee period and the manner in which it was done. To explain the would require the assessee-to explain the corpus or fund from where invested expenditure has been met. 8.4.2 In the present case, the nature and source of such cash deposits made any assessee’s bank account(s) were not at all explained, leave alone satisfy, explanation. Further, for invoking deeming provisions under Section 69A of the Act there should be clearly identifiable asset or unexplained Money. It is amply provision beyond doubt that the assessee’s deposits appearing in his bank account(s) remained, unexplained, and the sum of Rs.75,00,000/i.e. deposits including cash and Other than cash in the appellant's bank account(s) are identifiable unexplained assets, The limbs of Section 69A of the Act stands qualified in the case of the assessee the assessee was found to be owner of the Money ; its nature and source is not identifiable. 8.4.3. The Hon’ble Supreme Court.in the case of Chuharmal Vs CIT (1988) 172 ITR 250 while affirming the view of the Madhya Pradesh High Court has held that expression ‘INCOME’ as used in Section 69A of the Act, 1961 had a wide means which meant anything which came in or resulted in gain and on this basis, conclude that the assessee had income which -he, had invested in purchasing article and‘ could be held to be owner and the value could be deemed to be his income by vin of Section 69A of the Act.’ . Following the ratio of the judgement of Hon'ble Supreme Court, in the instant case, the assessee deposited Cash in his bank account and on the basis of there can be concluded that the assessee had income to the extent of cash deposit made during the year under consideration appearing in bank accounts and he/she could held to be the owner and the Money at his credit could be deemed to be his virtue of Section 69A of the Act. Hence, in the facts of this case inference can be drawn that the assessee had income which he/she had deposited! Bank accounts and, as such, that Income was subject to tax. 8.4.4 Further, the Hon’ble Supreme Court in the case of Smt Srilekha Baner! and others Vs CIT, Bihar & Orissa, reported in 1964 AIR 697, dated 27/03/19 the Hon'ble Court held that the source of money not having been satisfactory proved, the Department was justified in holding it to be assessable income of assesse from some undisclosed source. The relevant finding of the Hon'ble Apex Court is as under: - ‘The fact of the case are that the assessee had encashed 51 high denomination notes of Rs.1,000/- each in January, 1946. The assessee's explanation in high application for encashment of the notes was that he was a colliery proprietor and contractor, that for conducting the business and for payment to labour which came to about Rs.30,000/to 40,000/every week he had to keep large sums of money to meet emergency and that the sum of Rs. 50,000/- realised by encashment of the notes was neither profit nor part of profit but was floating capital for the purpose of conducting business. The income--tax Officer did not accept this explanation and treated this amount as profit from some undisclosed source and assessed it as assessable income. In Manindranath Das v. Commissioner of Income Tax, Bihar & Orissa, the tax-payer had encashed Notes of the value of Rs. 28,600, which he contended were his accumulated savings. His explanation was accepted in respect of Rs. 15,000, because 15 notes could be traced to a bank, but was rejected in respect of the balance. The Patna High Court pointed out that if an assessee received an amount in the year of account, it was for him to show that the amount so received did not bear the character of income, and the tax-payer in the case had failed to prove this fact in respect of the remaining notes. The Hon'ble Supreme Court has held that ‘The cases involving the encashment of high denomination notes are quite numerous. In some of them the explanation tendered by the tax-payer has been accepted and in some it has been rejected. Where the assessee was unable to prove that in his normal business or otherwise, he was possessed of so much cash, it was held that the assessee started under a cloud and must dispel that cloud to the reasonable satisfaction of the assessing authorities, and that if he did not, then, the Department was free to reject his explanation and to hold that the amount represented income from some undisclosed source.” The Hon’ble Supreme Court further held in the case of Smt Srilekha Banerjee and others (cited supra) that ‘the Department was justified in holding that Rs.51,000/was assessable income of the assessee from some undisclosed source. lt was not correct that the assessee was not required to prove anything and that the burden was entirely upon the department to prove that the amount received from the encashment of high denomination notes was income. The correct position is as follows. If there is an entry which shows the receipt of a sum or conversion of the Notes by the assessee by himself, it is necessary for the assessee to establish, if asked, what the source of that money was and to prove that it did not bear the nature of income. The department is not at this stage required to prove anything. The fact that there was receipt of money or conversion of noes is itself prima facie evidence against the assessee on which the Department can proceed in absence of good explanation.’ 8.4.5 Therefore, in case where assessee’s huge deposits in his bank account(s) Yuting the year under consideration, but the sources were neither explained nor such offered for taxation, the onus is on the assessee to prove that the deposits including cash and other than cash made did not bear the character of income. Int. case, the assessee had failed to prove this fact. Further, by relying upon the decision of Hon’ble Supreme Court in the cases cited above that there was ample evidence, that Cash was deposited in bank accounts, which is prima facie evidence against the assessee that the deposits are undisclosed income on which the Department ca proceed in absence of good explanation. 8.5 In this regard, reliance is placed on the decision of the Hon’ble Delhi High Court in the case of Sunil Jain vs. Income Tax Department [2022] 14; taxmann.com 507 (Delhi) dated 22.07.2022, wherein the Hon’ble Tribunal has upheld the similar addition made by the AO and decided the appeal in favour of the revenue. The head note of the decision is reproduced as under: “Section 69A, read with section 148, of the Income-tax Act, 1961 - Unexplained moneys (Reassessment) - Assessment year 2017-18 - Assessee filed his return of income showing an income of certain amount - Case of assessee was selected for limited scrutiny raising queries regarding cash deposit of Rs. 28.75 lakhs made by assessee during demonetization period in 'C’ bank — Further, an assessment order was passed making an addition of Rs. 28.75 lakhs to returned income of assessee - Assessee preferred an appeal against same - During pendency of appeal, revenue issued a reassessment notice on ground that assessee had failed to satisfactorily explain source of fund for cash deposit of Rs. 12.50 lakhs made by assessee in 'PN' bank - It was noted that cash deposit of Rs. 12.50 lakhs was not adjudicated upon during original scrutiny proceedings - In income-tax return, assessee had only mentioned detail of cash deposited in 'C’ bank account and had not mentioned cash deposits in any other bank accounts hether, on facts, impugned reopening notice issued against assessee was justified - Held, yes [Paras 13, 15, 16 and 19] [In favour of revenue]” 8.5.1 Reliance is also placed on the decision of the Hon’ble ITAT, Chennai Bench in the case of Raju Ravichandran vs. Income-tax Officer [2024] 459 taxmann.com 1518 (Chennai - Trib.) dated 16.06.2023, wherein the Hon’ble Tribunal has upheld the similar addition made by the AO and decided the appeal in favour of the revenue. The head note of the decision is reproduced as under: “Section 69A, read with section 115BBE, of the Income-tax Act 1967 . Unexplained moneys (Cash deposit) - Assessment year 2017-18 - Assessee was engaged in business of retail/wholesale of egg - During demonetization period, assessee made cash deposit in his bank accounts and claimed that same was out of sale proceeds from wholesale/trading of egg business - Assessing Officer noted that assessee had deposited specified bank notes in his bank account - He, thus, treated same as unexplained money under section 69A and taxed same under section 115BBE on ground that assessee's business did not come under exempted category and assessee was not allowed to receive old SBN notes as same ceased to be legal tender - Whether since Central Government had notified that denomination of Rs.1000 and Rs. 500 notes was not a legal tender with effect from 9-11-2016, nobody could engage in trading through this currency - Held, yes - Whether thus, Assessing Officer had rightly added cash deposits made by assessee under section 69A - Held, yes [Para 4] [In favour of revenue]” 8.5.2 Reliance is further placed on the decision of the Hon’ble ITAT, Raipur Bench case of Adim Jati Seva Sahkari Samiti Maryadit vs. Income-tax Officer 159 taxmann.com 8 (Raipur - Trib.) dated 18.09.2023, wherein the Hon’ble Tribunal has upheld the similar addition made by the AO and decided the appeal in favour of the revenue. The head note of the decision is reproduced as under: “Section 69A of the Income-tax Act, 1961 - Unexplained moneys (Bank deposit) - Assessment year 2017-18 - During demonetization period, assessee-society deposited certain sum in its bank account - Since assessee didn't respond adequately to several notices issued by AO, said cash deposit was treated as unexplained income under section 69A - On appeal. Commissioner (Appeals) had afforded sufficient opportunities to assessee to put up its case on merits before him, but no material/evidence was placed on record by assessee to substantiate sources of credit in its bank account Commissioner (Appeals) thus sustained addition made by A.O. under section 69A - Held, yes - Whether considering facts of instant case, there was no infirmity in view taken by lower authorities who had rightly sustained addition and accordingly, same was to be upheld - Held, yes [Paras 15, 18 and 20] [in favour of revenue]”. 8.5.3 It is relevant to refer to the Decision of Hon’ble ITAT Hyderabad in the case Basheeruddin Ali Khan v. ITO 42 taxmann.com 69 wherein it is held as under: “14. We have heard the submissions of both the parties and perused the material on record as well as the orders passed by the revenue authorities. Undisputedly as revealed from the bank account, the assessee has made cash deposit of Rs.6,50,000/on 8-9-2004. It is the contention of the assessee that the aforesaid deposits were out of the cash available with him from withdrawals made by him earlier from the SBI from February, 2002 to September, 2003. However, such explanation of the assessee is against human probability and totally unbelievable. When the assessee is having a bank account, it is beyond human probability and totally incomprehensible that the assessee would keep quite a substantial amount of Rs.6,50,000/- in cash with him for a period of over one year without depositing into the bank 8Ccount. The assessee has also not shown any valid reason as to why he kept so much cash with him for over a period of one year when he was holding a bank account. In the absence of any cogent reason backed by sufficient evidence, the explanation of the assessee is only a make-believe story and hence cannot be accepted. The decisions relied upon by the learned AR will also be of no help to the assessee as in the present case the assessee has failed to prove the source of deposit with valid reasons and proper evidence. In this view of the matter, we do not find any infirmity in the order of the CIT (A) in sustaining the addition of Rs.6,50,000/-. Accordingly, we uphold the order of the CIT (A) by dismissing the ground raised by the assessee.

no. 5 is dismissed.

9. The brief facts of the case are already discussed in para 7 (cited supra), therefore, for the sake of repetition, the same is not discussed herein again. In this regard, it is observed that on perusal of appellant's bank statements, the AO had observed that an amount aggregating to Rs.75,00,000/- i.e. undisclosed investment made in the bank deposits of the appellant during the year under consideration. Thus, the amount of deposits including cash and other than cash of Rs.75,00,000/- in the bank account of the appellant was treated as unexplained money u/s. 69A of the Act and added back to the appellant's total income by the AO while passing the order u/s 143(3) of the Act. Further, in addition to this a disallowance of agriculture income of Rs.2,25,000/- was also made by the AO due to non-furnishing of any details receipts and expenses for establishing agricultural income. Thus, the same was added back to the total income of the assessee. 9.1 It is also observed from records that the appellant had not filed any detail/explanation with supporting evidences to explain the nature and source of the said credit entries (including cash) In his bank accounts during the Course of Page 9 of 11 appellate proceedings. Therefore, it can be concluded that the “Appellant has completely failed to discharge his onus and addition made by the AO is found to be justified. It is also relevant to note that in absence of any response/explanation in respect of credit entries (including cash) in the bank accounts, the AO had passed a very reasonable order. 9.2 In view of the above factual matrix of the case, the addition made by the AO on account of credit entries (including cash) in the appellant’s bank count and the disallowance of agriculture income of Rs.2,25,000- /are upheld and hence confirmed. Thus, the all grounds of appeal are dismissed.

10. In the result, the appeal is dismissed.” (B.1) The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 14.10.2023 of the Ld. CIT(A). In the course of appellate proceedings in Income Tax Appellate Tribunal (ITAT), a paper book in two parts, containing the following particulars, was filed from the assessee’s side: - (B.2) Further, a separate paper book, containing copies of medical records and report of the assessee was also filed from the assessee’s side. The Ld. Departmental Representative as well as the assessee filed written submissions. At the time of hearing, the Ld. Authorized Representative for the assessee drew our attention to order dated 13.11.2024 passed by the ITAT in the case of the assessee for A.Y. 2017-18 (in whereby in similar facts and circumstances, the impugned order of the Ld. CIT(A) was set aside and the issues in dispute were restored back to the file of the Assessing Officer; on consideration of ‘medical condition’ of the assessee. The Ld. AR for the assessee submitted that in the present appeal also, the issues in dispute may be restored back to the file of the Assessing Officer with the direction to pass fresh order on the issues in dispute. The Ld. Departmental Representative left the matter to the discretion of the Bench.

(C). We have heard both sides. We have perused the record. We have gone through the affidavit filed by the assessee and medical record/report. We notice that in similar circumstances vide aforesaid order dated 13.11.2024, in the case of the assessee, for A.Y. 2017-18, the issues in dispute were restored back to the file of the Assessing Officer with the direction to pass fresh assessment order after providing reasonable opportunity to the assessee. Following the same, and in view of the foregoing, we set aside the impugned appellate order of the Ld. CIT(A) in the Page 11 of 11 present appeal before us, and restore all the issues in dispute to the file of the Assessing Officer with the direction to pass fresh assessment order on these issues in accordance with law after providing reasonable opportunity to the assessee.

(C.1) In the result, appeal of the assessee is partly allowed for statistical purposes.

Order pronounced in the open Court on 11/09/2024