ANISH KUMAR JAISWAL,DEWAS vs. INCOME TAX OFFICER , DEWAS

Per Paresh M Joshi, J.M.:

This is an appeal filed by the assessee Under Section 253 of

the Income Tax Act (hereinafter referred to as the “Act” for sake of

brevity) before this Tribunal. The assessee is aggrieved by order

bearing Number ITBA/NFAC/S/250/2024-25/ 1068026051(1)

dated 27.08.2024 of Ld. CIT(A) passed u/s 250 of the Act which

is hereinafter referred to as the “Impugned order”. The relevant

Assessment Year is 2010-11 and the corresponding previous year

period is from 01.04.2009 to 31.03.2010.

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Anish Kumar Jaiswal ITA No. 686/Ind/2024 - A.Y.2010-11

2.1 That as and by way of order dated 13.11.2017 the income of

the assessee was computed at Rs.22,18,408/- in terms of Section

144 of the Act for Assessment Year 2010-11. The said order

dated 13.11.2017 is hereinafter referred to as the “Impugned

Assessment order”.

2.2 That the assessee being aggrieved by the “impugned

assessment order” preferred a first appeal before Ld. CIT(A) in

terms of Section 246A of the Act and who by the “Impugned

Order” has dismissed the appeal of the assessee on the grounds

specified therein.

2.3 That the assessee being aggrieved by the “Impugned Order”

has preferred this second appeal before this Tribunal against the

“Impugned Order” and has raised following grounds of appeal

against the “Impugned Order” in Form No.36 which are as

under:-

“1. That the notice issued u/s 148 of the Act is illegal, wrong, without Jurisdiction and authority of law. 2. That the order passed u/s 144 of the Act is illegal, wrong and bad-in- law. 3. That the addition made of Rs.22,18,408/- is illegal, wrong and bad- in-law.

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3.1 The hearing in the matter took place before this Tribunal on

08.04.2025 when Ld. AR for and on behalf of the assessee

interalia contended before us that the “Impugned order” is illegal,

bad in law and not proper. It was prayed that the same should

be set aside by this Tribunal in exercise of its appellate power

conferred upon them under the Act.

3.2 At the outset and threshold while maintaining the fact that

the “Impugned Assessment Order” is u/s 144 of the Act but the

notice u/s 148 of the Act which triggered the Reassessment

proceeding in the instant case was indeed illegal, wrong, without

jurisdiction and the authority of law. The Ld. AR invited our

attention to page-4 of the paper book which contains “Reasons to

believe” that income chargeable to tax has escaped assessment.

The Ld. AR then read out whole of page 4 of the paper book and

contended that in the “reasons to believe” it is recorded that :-

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(i) Assessee did not file his return of income in the

Year 2010-11.

(ii) That information available shows that the assessee

had deposited cash in the saving bank account

amounting to Rs.22,18,408/- during the Financial

Year 2009-2010 relevant to Assessment Year 2010-

2011.

(iii) That the department made a prior enquiry too by

sending letters dated 15.05.2016 and 16.01.2017 to

the assessee by virtue of which the assessee was

asked to furnish the information with regard to

source of cash deposits made in the saving bank

account. That the assessee made no compliance in

response to the aforesaid letters and therefore Ld.

Assessing Officer was satisfied that the assessee

has no explanation to offer and on account of such

failures the assessee has failed to offer the income

for taxation to the extent of Rs.22,18,408/- which

has escaped assessment.

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3.3 Basis above reasons on page 4 of paper book it was also

contended by the Ld. AR that though the database of the

department showed information but department never carried

out any verification of the same from respective bank of the

assessee which verification was must to arrive at a satisfaction

that indeed income had escaped assessment to the above extent

(supra). It was therefore submitted that the Ld. A.O has

proceeded wrongly basis some information which was not verified

by the Ld. A.O while these arguments were canvassed by Ld. AR,

the Ld. DR for the Revenue stated that since the two letters

issued to the assessee (supra) were not replied to the Ld. A.O his

satisfaction is reasonable just and fair. It cannot thus be faulted

with at all. The Ld. A.O therefore has met the requirement of law

u/s 147/148 of the Act. The Ld. AR during the course of the

hearing contended that while framing the “Impugned Assessment

Order” the return of income for Assessment Year 2010-11 which

is at page 1 to 3 of the paper book along with computation of

income was completely overlooked/ignored. The Ld. AR therefore

contended that in the impugned assessment order the returned

income details are just not appearing at all. Hence both reasons

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recorded and impugned assessment order are all wrong illegal

and not proper. It was also contended that the assessee was in

the business of distribution of sim and recharge vouchers on

behalf of IDEA Cellular during the year under consideration. The

returned income was accepted by the department and even

refund of taxes paid were made to the assessee on 22.01.2011.

In so far as merits of the case is concerned where there is

addition of Rs.22,18,408/- which was cash deposited in Narmada

Jhabua Gramin Bank, it was contended that amount deposited

was in small lots. This small lots of amounts deposited are

nothing but collection of “Sim sale and recharge vouchers”.

Payments to IDEA Cellular has been made from this account.

The maximum balance during the year under consideration is

only Rs.1,23,130/- on 19.03.2010 and that total income declared

during the year under consideration is Rs.2,84,674/- (ROI). The

reliance is placed on page 8 to 11 of paper book where bank

account of Narmada Jhabua Gramin Bank Account statement is

enclosed. It is stated that in so far as Axis Bank Account is

concerned the same was opened on 02.10.2010 whose copy are

at page 13 to 18 of paper book filed. It was stated that on

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27.04.2009 bank account with Narmada Jhabua Gramin Bank

was opened with cash deposit of Rs.1000/-. The grand total of

Rs.23,89,364/- appears at page 11 of bank statement and by

balance is of Rs.5,196/-. The total withdrawal is Rs.23,84,168/-.

The withdrawal is made by DD as payment made to IDEA

Cellular. Deposit is on account of sale of Sim & Recharge

Voucher the business of the assessee. Per contra Ld. DR

contended that the bank statement simply shows “DD” and to

whom this amount is paid is not at all stated in the bank account

and a presumption cannot be made that payments have gone to

IDEA Cellular. In brief he contended that source of cash remains

undisclosed and so also payment as and by way of DD.

Concluding Ld. DR stated that “Impugned Assessment Order” is

rightly upheld by “Impugned Order” of Ld. CIT(A). Impugned

order is reasonable, fair and just. It is based on material on

record. In rejoinder the Ld. AR contended that the bank account

is in Narmada Jhabua Gramin Bank which is a rural bank where

accounts are maintained manually and same is in rural set up.

Minute details of DD as to whom it was paid are not stated. Over

all Ld. AR contended that a decision should be taken by this

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Tribunal as Assessment Year is 2010-11 and long time has

elapsed and suggestion of DR to remand matter back to Ld. AO or

CIT(A) would not serve any useful purpose as assessee is a small

businessman. Hearing was thereafter concluded with reliance

being placed on judgments in paper book which Ld. DR

contended that same are on different set of facts then the instant

facts of the case and hence distinguishable. Ld. DR has fully

supported order of CIT(A) whereas by placing reliance on

assessment order dated 30.12.2013 for Assessment Year 2011-12

Ld. AR has attempted to draw mileage with regard to business of

assessee of sale of sim card and recharge vouchers.

4.1 We now have to decide the legality, validity and proprietary

of the “Impugned Order” basis records of the case and

contentions canvassed before us.

4.2 We have minutely perused records of the case and have

heard the rival submissions.

4.3 We observe that Ld. AR has attempted to argue legal points

as well as merits of the case. We therefore examine legal point

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first which is that notice issued u/s 148 of the Act is illegal,

wrong, without jurisdiction and authority of law. The reasons are

as under as per paper book on page 4 which we reproduce

below:-

“Reasons to believe that income chargeable to tax bus escaped form assessment

The assessee did not file his return of income for the assessment year 2010-11. The AIR information available shows that the assessee had deposited amounting to Rs. 2218408/- during the financial year 2009-10 relevant to the A.Y 2010-11. Vide this office letter dated 15/09/2016 and 16/01/2017 assessee was asked to furnish information mentioned therein and explain the source of cash deposited account.

No compliance was made by the assesses in response to the aforementioned letters. Considering that the assessee has nothing to say in the matter in order to explain the source of cash deposited in his saving bank account, I am satisfied that the assesse had failed to offer the income for taxation to the above extent.

In view of the above, I have reason to believe that the income of Rs.2218408/- chargeable to tax has escaped from assessment within the meaning of 147 of the Income Tax Act, 1961. Accordingly, notice u/s 148 is to be issued for reopening the case u/s 147 after obtaining approval u/s 151 from the Pr. Commissioner of Income Tax, Ujjain. Sd/- Income Tax Officer-I Dewas

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4.4 Basis above reasons we notice that it is wrongly stated that

assessee has not filed return of income for Assessment Year

2010-11, whereas the assessee has placed on record of this

Tribunal photo copy of return for Assessment Year 2010-11 on

page 1 to 3 of paper book of the assessee wherein gross total

income is Rs.2,84,674/- and total income is Rs.1,84,670/-, it is

dated 04.08.2010. This fact of filing of return is not disputed by

Ld. DR in any manner whatsoever. We therefore hold that by

virtue of page 1 of paper book there is indeed a return of income

for Assessment Year 2010-11, on record Ack No:-

146892260040810. We further observe and hold that basis such

return of income bearing above Ack No. on 22.01.2011 a refund

has been paid to the assessee page 7 of paper book under Ack

No.:- 146892260040810. In view of this factual matrix which is

totally undisputed. It is absolutely wrong and incorrect to state

in the “reasons” that the assessee did not file his return of

income for the Assessment Year 2010-11. Moreover department

has paid refund on this return of income. There is thus total non

application of mind in recording reasons for purposes of Section

148 of the Act. It is also pertinent to mention that in the

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“Impugned Assessment Order” dated 13.11.2017 there is not

even a whisper about return of income (supra). The entire cash

deposit of Rs.22,18,408/- is added without taking into

consideration ROI filed. We therefore have no hesitation to hold

that “Reasons” and so also “Impugned Assessment Order” dated

13.11.2017 are illegal and bad in law. Since foundational

grounds of reasons and impugned assessment order perse are

held by us to be illegal and bad in law we are of the considered

view that there is no need to further examine other legal grounds

and so also merits of the case as once the foundational facts are

wrong, illegal and bad in law subsequent proceedings topples

down. The Ld. AR has raised a grievance and Ld. DR has no

answer to ground raised by Ld. AR. Under these circumstances

at the outset and threshold the assessee succeeds. We

accordingly set aside the impugned order as on foundational

ground canvassed by Ld. AR, the impugned order has no legs to

stand. Needless to state that “Reasons” basis which

Reassessment proceedings commenced have been held by us to

be perse wrong we hold that Reassessment proceeding triggered

are all wrong and illegal. Assessee thus succeeds on this limited

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ground as reasons recorded for triggering proceedings u/s

147/148 itself is bad and shows complete non application of

mind on part of Ld. A.O. The assumption of jurisdiction to

initiate proceedings u/s 144/148 itself is wrong and illegal as

held by us (supra). We have no hesitation to hold that Ld. A.O

has not applied his mind to the facts of the case in hand and

basis AIR has shot off notice u/s 148 without even caring to

verify whether ROI is filed or not. We hold exercise of such quasi

judicial power to be wholly without jurisdiction and/or in

irregular exercise of jurisdiction consequently Null and Void

abinitio.

5.1 In the premises we set aside the Impugned Order.

5.2 In result Appeal of the assessee is allowed.

Order pronounced in open court on 23.04.2025.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक/ Dated : 23/04/2025 Dev/Sr. PS

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Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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