ZOYIEB ALI,SRINAGAH vs. INCOME TAX OFFICER WARD-1, SRINAGAR
Facts
The assessee appealed against the CIT(A)'s order confirming an addition of Rs. 38,13,839/- on account of cash deposits for AY 2012-13. The assessee challenged the validity of the reassessment proceedings, including jurisdictional issues, lack of DIN, and disputed the full addition, claiming the deposits were business turnover for M/S Alpine Traders. The original assessment was reopened u/s 147 and an ex-parte order was passed u/s 144.
Held
The Tribunal condoned a 49-day delay in filing the appeal but rejected the additional ground on territorial jurisdiction. It held that the CIT(A) erred by confirming the addition ex parte without properly considering the assessee's claim of running a business and the necessity to tax only the profit element, not the entire cash deposit. The matter was remanded to the Assessing Officer for limited verification of the business activity and application of an appropriate net profit/gross profit rate.
Key Issues
Validity of reassessment proceedings (jurisdiction, notice u/s 148, lack of DIN); Taxability of entire cash deposit versus only the profit element from business turnover; Condonation of delay in appeal filing and territorial jurisdiction.
Sections Cited
Section 147, Section 148, Section 144, Section 250(6), Section 124, Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH (PHYSICAL
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH (PHYSICAL), AMRITSAR
BEFORE DR. MITHA LALMEENA, HON'BLE ACCOUNTANT MEMBER AND SHRI UDAYAN DAS GUPTA, HON'BLE JUDICIAL MEMBER
ITA No. 687/ASR/2024 (Assessment Year 2012-13)
Income Tax Officer, Zoyieb Ali Ward-1 170 A, Green Park Lane Bye Pass, Near JAMKASH, Srinagar Kapurthala PAN:AKAPA2889F Shri Rohit Kapoor, Advocate and Assessee by Shri V.S. Aggarwal, ITP Shri Charan Dass, Sr. DR Revenue by 23.09.2025. Date of Hearing Date of Pronouncement /A // .2025.
ORDER DR. MITHA LAL MEENA, A.M.:
This appeal is preferred by the assessee against the order passed by Id.
Commissioner of Income Tax (Appeal), NFAC, Delhi, dated 30.08.2024 which has
emanated from the order of the NFAC, Delhi u/s 144 of the Act dated 15.12.2019
with respect to the Assessment Year 2012-13.
The assessee has raised following grounds:
That the assessment completed u/s 147 is bad in law in view of the fact that the notice u/s 148 was issued by non-jurisdictional ITO Ward 5(3)(5) Budh Nagar, Noida after obtaining approval from PCIT, Noida. That the reasons for re-opening were recorded by jurisdictional ITO 3(3), Srinagar and approval was obtained from PCIT, J&K.____________
2 iTA No. 687/ASR/2024 (Assessment Year 2012-13)
On the facts and circumstances of the case, the CIT (A) vide order u/s 250(6) dated 30.08.2024 has erred in confirming the addition to the tune of Rs Rs.38,13,839/- made on account of cash deposit Rs.38,10,100/-.
That on the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Assessing Officer without appreciating that the reasons recorded for reopening the assessment under Section 147 of the Income 3 Tax Act, 1961, were based on the erroneous assumption that the appellant is a non-PAN assessee, whereas the notice issued under Section 148 of the Act explicitly mentioned the appellant's Permanent Account Number (PAN), rendering the entire reassessment proceedings unsustainable in law.
That the LD CIT(A) has erred in confirming the addition of Rs.38,13,839/- made by the AO ignoring the fact that the assessment framed u/s 144/147 is bad in law since the same is without mentioning DIN which is mandatory requirement as per circular no. 19/2019 dated 14 Aug 2019. That the subsequent letter dated 24.12.2019 communicating the DIN for order passed dated 15.12.2019 is bad in law and in violation to Para 2 of circular no. 19/2019.
That the CST(A) has erred in confirming the additions Rs.38,13,839/- made by the AO ignoring the facts that the reporting u/s 148 was made merely on the basis of AIR information.
That the LD CIT(A)has erred in confirming the additions of Rs.38,13,839/-ignoring the fact that assessee was running a small business under name M/S Alpine Traders, Nurshing Ghar, Srinagar during the A.Y 2012-2013. That while confirming the 6 addition the CIT(A) has failed to go through the bank statement where amount deposited in bank were utilized for making business purchases related to business. Thus, only the profit element embedded should be taxable and not the entire cash deposit.
There was a delay of 49 days in filing this appeal before the tribunal. Ld.
council for the assessee has explained that the delay has been occurred dua non
3 ITA No. 687/ASR/2024 (Assessment Year 2012-13)
communication as primary Contact details on the Income Tax Portal were
incorrect and the appellant assessee didn't receive any intimation of the
impugned appellate order. As a result, he was unable to submit the appeal
within the stipulated time frame. The learned AR has requested that 49 days
short delay may be condoned. Ld. DR on the other side has no objection to the
request of the assesse. Considering the bonafide rasons, we condone the short
delay 49 days and admit the appeal.
The Legal issue raised by the appellant by via of additional ground
pertaining to validity of territorial jurisdiction has no merits as the appellant
assessee was required to raise the objection of the territory adjudication within
one month of the issue of notice as per provisions of section 124 of the Income
Tax Act. Finding no merit in the additional legal ground of the assessee we reject
the additional ground raised by the assessee.
In ground no. 2 and 6 the appellant has challenged the order on merits
that the CIT (A) vide order u/s 250(6) dated 30.08.2024 has erred in confirming
the addition to the tune of Rs Rs.38,13,839/- made on account of cash deposit
Rs.38,10,100/- treating the business turnover as cash deposit in the bank
account.
Having heard Both the sides and perusal of the material on record, we find
that the CIT appeal/NFAC has confirmed the addition ex parte qua the assessee
4 ITA No.687/ASR/2024 (Assessment Year 2012-13)
by mentioning that appellant has not produced any material to controvert the
finding of the AO and that the appellant has also failed to furnish specific ground
wise submission except statement of facts in grounds of appeal in verbatim. In
the event, I have no reason to interfere with the finding of the AO. It is noted
that the AO has passed the assessment order an exparte order u/s 144 of the
Act.
It is seen that the LD CIT(A) confirmed the additions of Rs.38,13,839/-
ignoring the fact that assessee was running a small business under name M/S
Alpine Traders, Nurshing Ghar, Srinagar during the A.Y 2012-2013 and that while
confirming the addition the CIT(A) has failed to go through the bank statement
where amount deposited in bank were utilized for making business purchases
related to business. The Ld. AR referred to the copy of the certificate issued by
the government of Jammu and Kashmir regarding the business activity carried
on by the appellant assessee (APB, Pg. 10). Meaning thereby that only the profit
element embedded should be taxable in the hands of the assessee and not the
entire cash deposit. The AO may apply the N.P. rate @ 8% of the turnover i.e the
total Cash deposit in the bank account.
Considering the peculiar facts of the case, we consider it appropriate to
restore the matter back to the AO for limited purpose of verification of the
certificate issued by the government of Jammu and Kashmir regarding the
5 ITA No. 687/ASR/2024 (Assessment Year 2012-13)
business activity carried on by the appellant assessee and on satisfying with the
business activities as embodied in the said certificate, he may apply appropriate
NP or GP rate based on comparable case dealing in the same business activities.
Accordingly, the impugned order is set aside and mater is remanded to
the AO for limited purpose.
In the result the captioned appeal of the assessee is allowed for statistical
purposes.
Order pronounced on...Z...../....ZZ.../2025 under Rules 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. / / ci (UDAYAN DAS GUPTA) (DR. MITtyA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER * . >/ // Dated :.Z..././Z./2025 Doc* Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File
By Oder Assistant Registrar, Income Tax Appellate Tribunal, Amritsar Bench, Amritsar.
