KASREE DEVI,MAWANA MEERUT vs. ITO WARD-1(1)(3), AYAKAR BHAWAN, BHAINSALI GROUND, MEERUT

“The present appeal has been preferred by the appellant against the order passed by CIT(A), NFAC dt 30.01.2023 u/s 250 of Income Tax Act, 1961 for AY 2017-2018, upholding the addition made by AO of Rs.60,38,500/- on account of cash deposited during demonetization period. As advised by the appellant, we beg to submit as under: - That the brief facts are as under: - 1.

3. As per the scheme lax Rs. 28,93,451/- 1.e. 49.9% on Rs 57,98,500 was deposited on 04.1.2017 and 25% bank deposit i.e. 14,49,625/- was made on 31.03.2017 as required by PMGKY 2016, the declaration vide FORM 1 was filed on 08.04.17 by the appellant and Certificate vide Form 2 was issued by PCIT, Meerut on 21.04.2017.

4. That the additions made u/s 69A by the Ld AO and confirmed by Ld. CIT Appeals for Cash deposited during the demonetization which has been already disclosed under the PMGKY 2016 tantamount to double taxation and is in contrary to the provision of the PMGKY 2016.

The following grounds of appeal have been taken up for your kind adjudication:- ➤ Grounds Raised Before CIT(A) and Now Raised before ITAT:

1. That the CIT Appeal is erred not accepting the Ground raised by the assesse that Ld Assessing Officer is not justified to make the addition u/s 115BBE of the Income Tax Act 1961 as the Appellant declared the entire Cash Deposit in Demonetization period under Income Declaration Scheme 2016 and deposited the entire Tax Deposit the entire Tax Liability as per the Scheme. ➤ Additional Grounds Raised first time before ITAT:

2. That CIT Appeal is erred in not invoking section 250(4) and (6) and Rule 46A(4) suo-moto in non verifying from the AO the authenticity of self explanatory / specific issueas per Ground No. 1 raised before him that whether the assessee actually opted Income Declaration Scheme 2016 and deposited tax and FDR and Form No 1 and 2 under PMGKY 2016 was issued to assessee or not, in fact the AO was aware about the declaration made by assessee in PMGKY 2016 before passing the order of CIT Appeals, So on the basis of facts of the case and for the want of justice to a super senior citizen, the addition made by AO and confirmed by CIT Appeal should be deleted. SUBMISSIONS of Ground No.1 Grounds Raised Before CIT(A) and Now Raised before ITAT: Ground No.1

1. That the CIT Appeal is erred not accepting the Ground raised by the assesse that Ld Assessing Officer is not justified to make the addition u/s 115BBE of the Income Tax Act 1961 as the Appellant declared the entire Cash Deposit in Demonetization period under Income Declaration Scheme 2016 and deposited the entire Tax Deposit the entire Tax Liability as per the Scheme. ➤ That the appellant had saving bank account No. 4269101004157 with Canara Bankduring AY 2017-2018 (attached as Ann. 45 to 48) That during demonetization Cash Deposit in Canara Bank is as under :-

1 19.11.2016 2,40,000/- Old savings/stridhan 2 22.12.2016 30,50,000/- Declared under PMGKY 2016 3 26.12.2016 27,48,500/- Declared under PMGKY 2016

TOTAL 60,38,500/-

CANARA BANK Summary of FY 2016-2017 PARTICULARS DR CR BALANCE OPENING BAL. 4,317.00 Rd Deposit 5,000 INTEREST Received on SB a/c 6,205.00 RD Mature 6,267.76 CASH DEPOSIT-2.11.16 5,000 CASH DEPOSIT-19.11.16 2,40,000.00 CASH DEPOSIT-22.12.16 30,50,000.00 CASH DEPOSIT-26.12.16 27,48,500.00 NEFT TO CA MAYANK 45,28,875.00 CHAUHAN for TAX & FDR BANK CHARGES 92.00 FD in CANARA BANK 25,00,000.00 FD REEDEMED CANARA 10,00,000.00 BANK NEFT from old CA to refund 14,50,000.00 FDR Amount to be deposited in PMGKY 2016 RTGS to CA Anupam Sharma 14,49,625.00 for FDR deposit in PMGKY- 2016 CLOSING BAL. 26,697.76

➤ That the AO has made addition of entire cash deposit of Rs. 60,38,500/-in bank account u/s 69A and CIT(A) also confirmed the addition made by the AO.

➤ That as per fact of the case Rs.57,98,500/-(Rs.60.38,500/- less Rs. 2,40,000/- out of her old savings/stridhan) declared in Income Declaration Scheme 2016 and deposited taxes, made FDR thereafter Income Tax Department issued Form No 1 and 2 under PMGKY 2016. ➤ That as per PMGKY 2016 scheme Tax Rs. 28,93,451/- i.e. 49.9% on Rs 57,98,500 was deposited on 04.1.2017 and 25% bank deposit i.e. 14,49,625/- was made on 31.03.2017. ➤ That the declaration vide FORM 1 was filed on 08.04.17 and Certificate vide Form 2 was issued by PCIT, Meerut on 21.04.2017. A- Submission Regarding addition of Rs.57,98,500/-(Total addition Rs.60,38,500/-less Rs. 2,40,000/-out of her old savings) : - That the appellant opted PMGKY-2016 scheme and declare undisclosed income as cash deposited in CANARA BANK a/c of Rs.57,98,500/- and paid required tax @ 49.9% and deposit in FDR 25% of undisclosed income, PMGKY-2016 scheme was duly followed and after filing form 1 department issued Form 2. (attached as Ann. 43 to 44) As per circular No. 43 of 2016 dated 27.12.2016 for PMGKY-2016 (attached as Ann. 58-62) it is mentioned that :- Effect of valid Declaration 11. Where a valid declaration as detailed about has been made, the following consequences will follow a. The amount of undisclosed income declared shall not be included in the total income of the declarant under the Income- tax Act for any assessment year; That the addition of cash deposit in bank account of Rs.57,98,500/- is not sustainable because :- ➤ Addition is in volition of clause 11(a) of CBDT circular No. 43 of 2016 dated 27.12.2016 for PMGKY-2016. ➤ Addition caused Double Taxation because appellant alreadt paid tax @ 49.9% on declare undisclosed income.

B-Submission Regarding addition of Rs.2,40,000/- deposit out of her old savings/stridhan (Total addition Rs.60,38,500/- less Rs. Rs.57,98,500/- discussed in para A above) : - In respect to deposit of Rs. 2,40,000/- it is submitted that the deposits made in the bank account were below Rs 5,00,000/-, which was deposited out of her old savings. That CBDT issued INSTRUCTION NO.3/2017 [F.NO.225/100/2017/ITA-II], DATED 21-2- 2017- TO BE FOLLOWED BY ASSESSING OFFICERS IN VERIFICATION OF CASH TRANSACTIONS RELATING TO DEMONETISATION (attached as Ann. 63 to 69) We are reproducing the relevant extract as under :- ANNEXURE Source Specific General Verification Guidelines 1.

1. In the case of SourabhAgarwalvs DCIT [ITA NO. 962/DEL/2022] where ITAT DELHI on 02.11.2022 heldat page no 40 & 41 in para 20 & 21 that: 20. Basis the facts discussed elsewhere show that the assessee has made a valid declaration under the PMGKY Scheme, 2016 and has duly paid taxes/penalty and has also deposited requisite amount under the PMGKY Scheme, 2016. By no stretch of imagination provisions of section 69A can be applied on the aforementioned facts. Therefore, the entire addition made by the AO and confirmed by the Id. CIT(A) do not hold any water and deserve to be deleted.

14,30,777/- Rs.58,54,429/- Rs. 10,90,205/-)..." (Rs.6,23,408/- Rs.2,00,000/-) = Rs.69,44,634 8.3-According to us, the said amount of Rs.10,90,205/- is required to be confirmed in the hands of the assessee and the remaining amount is required to be deleted. Accordingly, the appeal of the assessee is partly allowed.

(a) The respondent has violated the principles of natural justice by not affording sufficient opportunity to the petitioner while passing the impugned re-assessment order. (b) No personal hearing was granted to the petitioner as stipulated under section 144 of the Income-tax Act, 1961. (c) The respondent has failed to take note of the fact that on receipt of the notice dated 2-3-2017 from the respondent, the petitioner has opted to take the benefit of the Pradhan Mantri triGaribKalyan Garib Kalyan Yojana Scheme, 2016, on 31-3- 2017 itself. Therefore, the impugned re-assessment proceedings for taking the cash deposit as an unexplained money under section 69A of the Income-tax Act, 1961, is void abnitio, illegal and also arbitrary.

7. Admittedly, as seen from the impugned assessment order passed under section 144 of the Income-tax Act, 1961, the petitioner has not participated in the said proceedings and the order is in the nature ofex parte assessment order. The grounds raised by the petitioner, namely, the cash amount of a sum of Rs. 82,29,000/- deposited under the Pradhan Mantri Garib Kalyan Yojana Scheme, 2016, on 31-3- 2017 has not been taken into consideration under the impugned assessment order. It is the contention of the petitioner that since he has has availed the benefit of Pradhan Mantri Garib Kalyan Yojana Scheme, 2016, the cash amount cannot be treated as an unexplained money under section 69 (A) of the Income-tax Act, 1961."

4. In the case of Smt. Uma Agrawalvs I.T.O [ITA No. 35/Agr/2021] where ITAT AGRA on18.06.2021 held that: "29. In our opinion assessee had duly explained the source of deposit i.e previous years saving and we have no hesitation to accept the same, as it would been presumed that this small amount of Rs 2,21, 000/ would have been accumulated or saved by her from various activities undertaken by her for and on behalf of family in last many years. Further as mentioned herein above, in the decision of Kirti (supra), women per say cannot be said to be not having income from any activities, as they are presumed to always been doing economic activities in the family for many years, hence in our view the assessee had duly explained the source of her investment. Therefore no additions can be made by lower authority. Further even if we ignore the explanation, for the sake of argument, then also it is for the assessing officer to bring on record some cogent evidence to prove that the amount deposited in the bank was undisclosed income arising from the business or from any other activities. No evidence has been brought on record by the lower authorities. Hon'ble Supreme Court in the matter of Smt. P.K. Noorjahan [1999] 103 Taxman 382 (SC) 30. The word "may" had been used by the statute under section 69A, as had been used by the statute under section 69 of the Income Tax Act 1961, therefore applying the same analogy as laid down by SC in the case of Smt. P.K. Noorjahan(supra), we are of the opinion that the amount deposited by the assessee during the demonetisation. Cannot be treated as income of the assessee. Hence the appeal of the assessee is allowed.

2. That CIT Appeal is erred in not invoking section 250(4) and (6) and Rule 46A(4) suo-moto in non verifying from the AO the authenticity of self explanatory / specific issueas per Ground No. 1 raised before him that whether the assessee actually opted Income Declaration Scheme 2016 and deposited tax and FDR and Form No 1 and 2 under PMGKY 2016 was issued to assessee or not, in fact the AO was aware about the declaration made by assessee in PMGKY 2016 before passing the order of CIT Appeals, So on the basis of facts of the case and for the want of justice to a super senior citizen, the addition made by AO and confirmed by CIT Appeal should be deleted. That as per the case: The appellant had raised the below Ground before CIT(A) (Attached as Ann. 10 to 11):- “… Ld Assessing Officer is not justified to make the addition u/s 115BBE of the Income TaxAct 1961 as the Appellant declared the entireCash Deposit in Demonetization period underincome Declaration Scheme 2016 and deposited the entire Tax Deposit the entire Tax Liability as per the Scheme.

"4. ----In our considered view, irrespective of the non-appearance of theassessee before the CIT(A), the CIT(A) ought to have dealt with the issues so raised by theassessee-appellant on merits and by way of speaking order and in accordance with the law. We, therefore, deem it fit and proper to remit the matter to the file of the CIT(A) for adjudication onmerits, in the light of the above observation. As the matter is being remitted to the file of thelearnedCIT(A), we also deem it appropriate to direct the learned CIT(A) to provide the assesse yet another fair and reasonable opportunity of hearing. Ordered, accordingly. As the matter isbeing remitted to the file of the learned CIT(A) for adjudication on merits, the grievances of theassessee, on merits, do not call for any adjudication at this stage." In the case of Pawan Kumar Singhalvs ACIT reported at [2019] 108 taxmann.com 548 where ITAT Delhi on 12.07.2019 held that: "8...... it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, heis obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points fordetermination and then render a decision on each of the points which arise for consideration with reasonsin support. ..... In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, itwould be noticed that the powers of the CIT(A) is co- terminus with that of the Assessing Officer i.e. hecan do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to notcomplete the assessment by allowing the assessee to withdraw its return of income, it is not open to theassessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution ofthe appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation toSection 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise fromthe impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as isevident from the provisions of the Act.

In the case of BabubhaiRamanbhai Patel vs DCIT[ I.T.A. No.904/AHD/2023 ]where ITAT Ahmedabad on 15.02.2024 held that: ….

raised by the assessee in his appellate order and without discussing the merits of the case. Therefore, in the interests of justice, we are setting aside the cases to the file of Ld. CIT(A) for fresh adjudication on merits, for both the assessment years, after giving due opportunity of hearing to the assessee to present his case on merits.”

6. Learned DR, on the other hand, opposed the submissions. However, he could not controvert the fact that the substantial amount which was deposited has been offered for taxation by the assessee under the Pradhan Mantri Garib Kalyan Yojana, 2016.

2,40,000/- out of old savings and Rs. 57,98,500/- offered for tax. It is stated that the due taxes have been paid. Therefore, it is prayed that the impugned addition may be deleted and the appeal of the assessee be allowed.

7.1. We have given our thoughtful consideration to the facts and material placed before us. The Revenue has not rebutted the contention that out of the amounts deposited in the bank account Rs. 57,98,500/- has been declared under the Pradhan Mantri Garib Kalyan Yojana, 2016. The assessee has also filed supporting evidence. The Assessing Officer ahs not controverted the evidence filed by the assessee. Therefore, we find merit in the contention that impugned addition deserves to be deleted. We, therefore, direct the Assessing Officer to delete the impugned addition. Grounds are allowed.

Order pronounced in open court on 10th October, 2024.