SHAFQAT ULLAH FAROOQUI,BHOPAL vs. CIT(A), INCOME TAX DEPARTMENT
Facts
The assessee, an individual, did not file a return of income for AY 2011-12. Based on information of a cash deposit of Rs. 30,74,000/-, a notice u/s 148 was issued after a delay and with an incorrect address. The AO completed the assessment by adding the cash deposit as unexplained income.
Held
The Tribunal held that the notice u/s 143(2) was not required as no return was filed. The notice u/s 148 was found to be valid as it was issued within 6 years and with prior approval. However, due to the assessee's failure to furnish documentary evidence for the cash deposits, the matter was restored to the CIT(A) for fresh adjudication, providing a last opportunity to the assessee.
Key Issues
Whether the reassessment proceedings initiated by issuing notice u/s 148 were valid, and whether the addition of Rs. 30,74,000/- as unexplained cash deposit was justified given the lack of evidence provided by the assessee.
Sections Cited
147, 144, 143(2), 148, 142(1), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE SMC BENCH, INDORE
आयकर अपील�य अ�धकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA No.160/Ind/2024 (Assessment Year: 2011-12) Shafqat Ullah Farooqui, CIT(A), A-24, Housing Board Colony, NFAC, Vs. Kohi-E-Fiza, Delhi Bhopal (Appellant / Assessee) (Respondent/ Revenue) PAN: AABPF0615K Assessee by Shri Govind Rinwa, AR Revenue by Shri Ashish Porwal, Sr.DR Date of Hearing 25.02.2025 Date of Pronouncement 28.02.2025 O R D E R
This appeal by the assesse is directed against the order dated
23.01.2024 of the Commissioner of Income Tax (Appeals), National
Faceless Appeal Centre (NFAC), Delhi for A.Y.2011-12 which is
arising from the assessment order u/s 147 r.w.s. 144 of the Act
dated 5.12.2018 framed by Assessing Officer 4(4), Bhopal.
Assessee has raised following grounds of appeal:
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12
“1. That the notice u/s 148 dated 26/03/2018 was served to the appellant on 02/08/2018 be held to be invalid and bad in law. The said notice and the consequent assessment order u/s 144 r.w.s. 147 be therefore be quashed. 2. That the assessment order made without complying with the provisions of section 143(2) be held to be bad in law and be quashed. 3. That the income assessed at Rs.30,74,000/- by the learned AO and upheld by CIT(A) be held to be bad, unjustified and exorbitant on the facts and in the circumstances of the case. 4. In the alternative and without prejudice to the grounds stated above the assessment of total income at Rs.30,74,000/- be held to be high and excessive and be reduced. 5. The appellant craves leave to add amend or alter and Ground of Appeal before or during the course of appellate proceedings”.
The assessee has filed this appeal. Facts of the case in brief
are that the assessee is an individual and has not furnished return
of income for Assessment Year 2011-12. Based on the information
about the alleged cash deposit of Rs.30,74,000/- in the bank
account of the assessee i.e. SBI, Indore notice u/s 148 of the Act
was issued on 26.03.2018 after recording reasons and getting prior
approval from PCIT-2, Bhopal. The assessee raised objections
regarding the limitation period within which the notice is to be
served and also stated that the address on the notice has been
wrongly mentioned as A-53 Housing Board Colony, Kohi-E-Fiza,
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12 Bhopal in place of A-24, Housing Board Colony, Kohi-E-Fiza,
Bhopal. Ld. A.O disposed off the objections stating that the
reopening was reported within 6 years under the relevant
assessment year. Thereafter notice u/s 142(1) of the Act was also
issued but the assessee did not filed any return in compliance to
the notices u/s 148 of the Act nor replied to the questionnaire
issued u/s 142(1) of the Act as a result Ld. A.O completed the
assessment making addition of Rs.30,74,000/- and assessed the
income accordingly. Aggrieved assessee preferred appeal before Ld.
CIT(A) but failed to succeed on both the legal and grounds on
merits. Now the assessee is in appeal before this Tribunal raising
legal grounds challenging the validity of assessment proceedings
and also stating that the assessee deserves to succeed on merits as
the source of cash deposit is from the withdrawal made from bank.
On the other hand Ld. Departmental Representative
supported the order of the lower authorities and stated that the
matter may be restored to the jurisdictional A.O for carrying out the
assessment proceedings afresh.
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12 5. I have heard rival contentions and perused the records placed
before me. So far as the legal issued raised in Ground No. 1 & 2
challenging the validity of notices issued u/s 148 of the Act and
also not issuing notices u/s 143(2) of the Act, I notice that so far as
Ground No.2 is concerned no notice u/s 143(2) of the Act has to
be issued after the assessee furnishes the return of income but the
instant case neither the assessee has furnished regular return of
income nor has filed any return in compliance to the notice issued
u/s 148 of the Act. Therefore Ground No.2 raised by the assessee
is dismissed. Finding of Ld. CIT(A) needs no interference.
5.1 As far as Ground No.1 challenging the validity of notice issued
u/s 148 of the Act, I find that the notice u/s 148 of the Act was
issued on 26.03.2018 through speed post No. E1911275575IN .
Though the assessee has raised the objection that address in the
notice was not correct but the assessee has been unable to place on
record any proof of that address mentioned in the PAN database
and secondly how did the assessee came to know about the notice
on a later date even if it has been claimed that it may be served on
wrong address. Considering the fact that the Ld. A.O has placed
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12 the details of Speed Post Number and date of notice issued u/s 148
of the Act is well within 6 years from the end of the assessment year
in question and that too after receiving the prior approval from the
competent authority I find that proper and valid notice is issued
u/s 148 of the Act. The finding of Ld. CIT(A) is upheld and Ground
No.1 raised by the assessee is dismissed.
As far as merits of the case are concerned raised in Ground
No.3 & 4, I find that the assessee has not filed any details before
the Ld. A.O during the course of assessment proceedings. Even
when the matter travelled before Ld. CIT(A) in first round assessee
failed to appear and then the assessee challenged the order of Ld.
CIT(A) before this Tribunal. Thereafter this Tribunal vide ITA
No.432/Ind/2022 dated 18.04.2023 allowed the appeal of the
assessee for statistical purposes directing the Ld. CIT(A) to pass a
speaking order as contemplated in Section 250(6) of the Act. Even
in the set aside proceedings the assessee again failed to furnish any
details explaining the source of alleged cash deposited. The finding
of Ld. CIT(A) in para 6.8 to 6.15 of the impugned order reads as
under:
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12 6.8. These grounds are regard to additions to tune of Rs. 30,74,000/- (being unexplained cash deposits) to the total income of the appellant.
6.9. The AO has stated that during the course of the assessment proceedings, the appellant has deposited cash of Rs. 30,74,000/- into his bank accounts and the appellant has not filed the Return of Income for the year under consideration. Therefore, notice u/s 148 of the IT Act, 1961 was issued to the appellant to file the Return of Income for the year under consideration.
6.10. However, the appellant was failed to file the same. Further notice u/s 142(1) of the IT Act, 1961 was issued to the appellant. The appellant was failed to comply the same.
6.11. Further the AO has issued a show cause notice u/s 144 of the IT Act, 1961 dated 30.10.2018 to the appellant. However, the appellant was failed to comply the same. Therefore, the AO was left with no other alternative except to treat the whole amount of Rs. 30,74,000/- as unexplained amount in the hands of the appellant. Accordingly, assessment proceedings were concluded by the AO after making an addition of Rs. 30,74,000/- for the year under consideration.
6.12. In view of the above, the assessment proceedings were concluded by the AO after making addition of Rs. 30,74,000/- as unexplained cash deposits.
6.13. It is noted from the submissions furnished by the appellant has deposited cash out of earlier withdrawals. However, the appellant has not furnished any documentary evidences to substantiate his. Therefore, the contention of the appellant is not found to be acceptable. Hence assessment order was passed by the AO is upheld.
6.14. In view of the above, I am of the considerate view that the reason mentioned for the appellant's claim by the appellant is not satisfied. Therefore, the addition made to the tune of Rs. 30,74,000/- by the AO is upheld.
6.15. Accordingly, the Ground No. 3 and 4 are dismissed”.
6.1 From the above findings of Ld. CIT(A) I notice that the assessee
failed to furnish any documentary evidence to substantiate the
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12 claim of explaining the cash deposit being made out of the cash
withdrawals. Even today during the course of hearing the assessee
has not furnished any details of such withdrawals and it seems that
the assessee is intentionally prolonging the litigations without
having any concrete evidence on record. During the course of
hearing it was discussed that the matter needs to be restored to the
lower authorities i.e. either Ld. CIT(A) or Ld. A.O to consider the
facts of the case and also giving a last opportunity to the assessee. I
therefore deemed it fit appropriate to restore Ground No.3 and 4 on
merits challenging the addition of Rs.30.74 lakhs to the file of Ld.
CIT(A), NFAC for necessary adjudication. The assessee is directed
to place details of bank account for F.Y 2010-11 before Ld. CIT(A)
on the date of hearing and should not take adjournment unless
otherwise required for reasonable cause. Ld. CIT(A) may give
reasonable opportunity to the assessee and then decide the issue
on merits in accordance with law.
ITA No. 160/Ind/2024 Shafqat Ullah Farooqui– A.Y 2011-12
In the result appeal of the assessee is partly allowed for
statistical purposes.
Order pronounced in the open court on 28.02.2025.
Sd/-
(MANISH BORAD) Accountant Member
Indore, 28.02.2025 Dev/Sr. PS
Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
