DEEPAK KUMAR AGRAWAL S/O SHRI LATE RATAN LAL AGRAWAL,TIKAMGARH vs. ITO, TIKAMGARH

The appeal in AY 2012-13, arises out of the order of the JCIT(A)-3, Ahmedabad [hereinafter referred to as ‘ld. JCIT(A)’, in short] dated 25.09.2024 against the order of assessment passed u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 25.12.2018 by the Assessing Officer, ITO, Ward, Tikamgarh (hereinafter referred to as ‘ld. AO’).

At the outset, I find that there is a delay in filing of appeal by the Assessee before this Tribunal by 297 days. Considering the reasons adduced in the condonation petition, I am inclined to condone the delay in the interest of substantial justice and admit the appeal of the Assessee for adjudication.

The only issue to be decided in this appeal is as to whether the Learned CIT(A) was justified in confirming the addition of Rs 15,25,500/- on account of cash deposits in the bank account in the facts and circumstances of the instant case.

None appeared on behalf of the Assessee. However, the written submission of the Assessee was placed on record by the Learned AR through email. Accordingly, the appeal is taken up for hearing and disposed of on perusing the materials available on record and based on the written submissions placed by the Learned AR through email.

The Assessee Late Shri Ratan Lal Agarwal, was a retired Government Teacher receiving pension and expired on 07-06-2011. Further, later, his wife also expired. Presently, the Assessee is represented by the legal heir Mr. Deepak Kumar Agarwal. A sum of Rs. 15,25,500 stood deposited in the bank account maintained by Shri Ratan Lal Agarwal. The source of this cash deposit was explained by the Assessee to emanate out of agricultural income, past family savings and retirement and pension funds received during financial year 2006-07. The Assessee submitted that he owns 20 bighas of agricultural land, which regularly generates agricultural income. The Assessee had not filed his regular return of income for the assessment year 2012-13. Information was received by the office of the learned AO that there was cash deposit above Rs. 10 lakhs in the savings bank account of the Assessee. Accordingly, a letter was issued to the Assessee on 29-08- 2016 to explain the AIR information of cash deposit over Rs. 10 lakhs. The Assessee did not furnish any response to the said letter. Accordingly, the learned AO formed a belief that the income of the Assessee had escaped assessment to the extent of cash deposits and proceeded to issue notice under Section 148 of the Act on 21-03-2018 after recording reasons thereon. The reasons recorded by the learned AO for reopening the assessment are reproduced in page 2 of the re-assessment order. In response to the said notice under Section 148 of the Act, no return was filed by the Assessee. Further, a notice under Section 142(1) of the Act was issued on 9-08-2018 in Hindi and on 18-08-2018 in English for completing the assessment under Section 144 of the Act, fixing the date of hearing on 28-08-2018. The said notice was also duly served on the Assessee through speed post. In response to the said notice, the Assessee filed income tax return for assessment year 2012-13 on 16-11-2018, declaring total income of Rs. 58,710/- stating that Assessee was a retired government servant and accordingly pension income was disclosed thereon. The Assessee furnished written submissions to the queries raised by the learned AO along with necessary evidence, copy of bank statement, copy of computation of income, death certificate of late Sri Ratanlal Agarwal. Based on the death certificate of Sri Ratanlal Agarwal, the learned AO duly impleded the legal heir Sri Chandrakanta Agarwal (wife of late Sri Ratanlal Agarwal) and proceeded with the assessment. The source of cash deposit of Rs. 25,25,500/- maintained with the Allahabad bank account was explained by the legal heir to emanate out of withdrawals made in earlier dates and repayments received out of interest-free loans and advances given to friends and relatives in the earlier years out of savings from salary and retirement benefit funds. But no cash flow statement was furnished in support of such claim made by the Assessee. The learned AO in the final show-cause notice observed that Assessee had made cash withdrawal of Rs. 15,25,000/- on 21-04-2011 and after depositing cash on previous dates and 27-04-2011, further cash deposit of Rs.10,00,000/- was made out of the cash withdrawal of Rs. 15,25,000 on 21-04-2011. Accordingly, the learned AO accepted the source for cash deposit to the extent of Rs. 10,00,000/- and show-caused the Assessee as to why the remaining sum of Rs. 15,25,500/- be not added to the total income as unexplained money under Section 69A of the Act. No response was filed by the Assessee thereon and accordingly, the learned AO completed the reassessment by adding the sum of Rs. 15,25,500/- as unexplained money under Section 69A of the Act. This action of the learned AO was upheld by the Learned CITA.