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Facts
The assessee, Jai Kumar, did not file an income tax return for AY 2011-12. Subsequently, cash deposits totaling Rs. 11,71,105/- were made in his State Bank of India account during FY 2010-11. The Assessing Officer initiated re-assessment proceedings under section 147 and, due to non-compliance, completed an ex-parte assessment, treating the cash deposits as unexplained income.
Held
The Income Tax Appellate Tribunal upheld the decision of the CIT(Appeals)/NFAC. It confirmed the validity of the re-assessment proceedings, finding no merit in the assessee's claims regarding mechanical reopening or unserved notices. The tribunal also sustained the addition of Rs. 11,71,105/- as unexplained income, as the assessee failed to provide any verifiable evidence for the source of these cash deposits or prove engagement in business activities.
Key Issues
1. Validity of initiation of re-assessment proceedings under sections 147, 148, 149, and 151 of the Income Tax Act, 1961. 2. Validity of upholding the addition of Rs. 11,71,110/- as unexplained income under Section 69A. 3. Whether the notice u/s 148 was properly served and if SOP prescribed by the Board was followed.
Sections Cited
147, 148, 149, 151, 139(1), 142(1), 144, 44AD, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM
The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 24.02.2025 for the assessment year 2011-12 as per the following grounds of appeal:
1. In the facts and circumstances of the case and in law, the Ld. Commissioner Income-tax (Appeals), NFAC has erred in confirming initiation of re-assessment proceedings under section 147 read with section 148, 149 and 151 of the Income-tax Act, 1961.
2. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in upholding addition of entire amount of cash deposit of Rs.11,71,110/- as unexplained income.
3. The impugned order is bad in law and on facts.
4. The appellant reserves the right to add, alter, omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority.”
2. The relevant facts in this case are that the assessee has not filed his return of income u/s.139(1) of the Income Tax Act, 1961 (for short ‘the Act’) for A.Y.2011-12. Subsequently, the A.O issued notice u/s. 148 of the Act. The reasons for issuance of notice u/s. 148 of the Act was that during F.Y.2010-11, the assessee had made cash deposits of Rs.11,71,105/- in his bank account with State Bank of India. In response to the said notice, the assesse has not filed his return of income for A.Y.2011-12. Further the A.O issued notice u/s. 142(1) of the Act a/w. query letter requiring the assessee to furnish information, evidence and documents. However, there was no compliance by the assessee. Statutory notices were issued u/s. 142(1) of the Act to the assessee but the assessee failed to comply with these notices which had been duly issued and served on him. Therefore, the A.O completed the assessment ex-parte u/s. 147 r.w.s. 144 of the Act as per the information and material available on record. Since the assessee failed to comply with the notices issued and had not explained the source of cash deposits in the bank account, therefore, the A.O treated the amount of Rs.11,71,105/- as undisclosed income of the assessee.
3. That the assessee being aggrieved preferred an appeal before the Ld. CIT(Appeals)/NFAC wherein certain legal grounds have been raised along with grounds on merits. The first objection that had been raised by the assessee regarding reopening is that it was initiated mechanically and on this issue, the Ld. CIT(Appeals)/NFAC has held and observed as follows:
“6.2 The first objection is that the reopening was initiated mechanically on the basis of information placed on record without conducting any independent enquiry and without independent application of mind. There is no merit in this contention as the AO has clearly noted that cash was found deposited in the bank account but no return of income for the relevant year had been filed. Thus, the AO sought to correlate the information available against the position as per the return of income. Hence it cannot be said that there is no independent application of mind by the AO. It is not in dispute that cash to the extent of Rs.11,71,105/- had been deposited in the bank account which belonged to the appellant. In the face of no return of income having been filed for the year, this information was sufficient for the AO to conclude that income chargeable to tax had escaped assessment. The AO had in his possession. tangible material, having live nexus to taxable income and thus there is no basis for stating that the reopening is not valid.”
3.1 The assessee vide next legal ground challenged the reopening proceedings on the ground that the jurisdictional notice u/s.148 was not served on the assessee and the same has been adjudicated by the Ld. CIT(Appeals)/NFAC observing as follows:
“6.3 The appellant challenges the reopening proceedings on the ground that the jurisdictional notice u/s.148 was not served. The appellant states that: It appears that the notice was issued at the care of address of Shri Noor Mohammad. Opp. Jet Box. Azad Chowk, Handipara, Raipur and above fact ascertainable from the address mentioned in the assessment order. It also appears that all the notices were also sent on the said address. Hence, the notices effectively remained unserved and thus could not be complied for. There is absolutely no merit in the above contention. The address % Shri Noor Mohammad, Opp. Jet Box Azad Chowk, Handipara, Raipur is an address provided and used by the appellant himself. In fact, this address is the address provided by the appellant as per PAN database. Further, this very address has been filled in by the appellant while filing the present appeal proceedings. Screenshot of form no. 35 is reproduced below:
The notice has been sent on the address mentioned in the returns for AY 2013-14, 2014-15 and 2016-17. Further, the email id wherein the notice was sent is rao.ksuresh55@gmail.com, which is the email id as per returns of AY 2013-14 and Ay 2014-15. Relevant screenshot is reproduced below:
Thus the jurisdictional notice u/s 148 has been issued at the valid addresses of the appellant and there is no basis for challenging the re-opening proceedings on this ground.”
3.2 The other contention that has been raised by the assessee is that SOP prescribed by the Board has not been followed by the A.O. In this regard, the Ld. CIT(Appeals)/NFAC has observed and held as follows:
“6.4 The next contention is that the SOP prescribed by the Board has not been followed by the AO. This is a baseless allegation as the impugned order clearly records that notice u/s.148 was issued after obtaining approval of the competent authority. The notice u/s 148 also clearly records approval being granted by Pr. CIT-1, Raipur. 6.5 The appellant has not been able to substantiate any of the challenges to the notice issued u/s.
Hence the notice u/s. 148 is upheld as a validly issued notice and ground no. 1 is dismissed.”
3.3. With regard to the merits of the case, the Ld. CIT(Appeals)/NFAC had adjudicated the same at Para 6.6 of its order, wherein it has been observed that the assessee has not furnished any verifiable evidence that he is earning any income from business. The return filing history reveals that the assessee has not filed any return of income for the relevant assessment year 2011-12. The earliest return of income available online is the return of A.Y.2013-14, wherein the assessee had shown salary income and income from other sources and there is no income from business. The same position holds for A.Y.2014-15. Also, the Ld. CIT(Appeals)/NFAC had extracted the screenshots of the return filed by the assessee. That though the assessee had claimed the benefit of presumptive taxation u/s. 44AD of the Act, the onus is always on the assessee to prove that he was indeed engaged in earning income from business. There is no evidence at all on record that the assessee were engaged in any business activities. The source of cash deposits were never explained by the assessee neither before the A.O nor before the Ld. CIT(Appeals) and therefore, the addition of Rs.11,71,105/- was confirmed by the Ld. CIT(Appeals)/NFAC as unexplained income in the hands of the assesse as per Section 69A of the Act.
That before me, the Ld. Counsel for the assessee simply reiterated the submissions made before the first appellate authority and has not produced on record any evidence nor any documents to demonstrate the source of cash deposits of Rs.11,71,105/-. That further, even in the legal ground also, except for reiterating the same no evidence has been placed on record to show some genuineness regarding contentions raised by the assessee. It is clear that the assessee is wasting time of judicial process through dilatory tactics and hunting forum whereas the actual fact remains the assessee has nothing to explain with regard to the source of money that has been found in his possession. Another important thing is that the assessee has taken benefit of presumptive taxation u/s. 44 AD of the Act claiming business activities, however, as has been examined by the sub-ordinate authorities there has been no return filed by the assessee nor any supportive evidence regarding business activities of the assessee. As the source of money is unexplained, therefore, the addition made by the A.O and sustained by the Ld. CIT(Appeals)/NFAC is upheld.
As per the above terms the grounds of appeal of the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in open court on 18th day of June, 2025.