JAY SINGH,MORENA vs. ITO-1, MORENA

The only issue to be decided in this appeal is as to whether the learned NFAC was justified in confirming the addition made in the sum of Rs 22,01,000/- on account of cash deposits made in the bank account in the facts and circumstances of the instant case. I also find that the assessee had raised the following additional legal grounds before me:-

I find that the aforesaid additional grounds are purely legal in nature and goes to the root of the matter. The facts relevant for its adjudication are on record. Hence in view of the decision of the Hon’ble Supreme Court in the case of NTPC Ltd reported in 229 ITR 383(SC), these additional grounds are hereby admitted and taken up for adjudication along with the original grounds.

I have heard the rival submissions and perused the materials available on record. The assessee is an agriculturalist having only agricultural income. It is not in dispute that the assessee had made cash deposit of Rs 22,01,000/- in his bank account. Since no return of income was filed by the assessee, the learned AO formed a belief that income of the assessee had escaped assessment and accordingly sought to reopen the case vide issuance of notice under section 148 of the Act on 29-3-2017, which stood served upon the assessee on 5-4-2017. In the reassessment proceedings, notice under section 142(1) of the Act stood issued to the assessee. Assessee, being an uneducated person and having no knowledge of operating the computer and income tax portal could not make compliance to the notices issued by the learned AO, which ultimately culminated in framing of assessment under section 144 read with section 147 of the Act on 27-11-2017, adding a sum of Rs 22,01,000/- on account of cash deposits made in the bank account as unexplained money under section 69A of the Act. This action of the learned AO was upheld by the learned NFAC. Aggrieved, the assessee preferred an appeal before this Tribunal. This Tribunal vide its order dated 20-09-2021 remanded the matter back to the file of Learned NFAC for deciding the issue afresh after granting sufficient opportunity of hearing to the assessee within 6 months from the receipt of the order of Tribunal. The Learned NFAC ignoring the directions given by this Tribunal passed an order on 26-12-2024 dismissing the appeal of the assessee. The Learned NFAC however noted that assessee had furnished written submissions along with copy of agreement to sale of land, copy of his bank account held with SBI and copies of affidavits of his brothers Mr Naresh Singh and Mr Bishan Singh. The affidavits of brothers are enclosed in Pages 8 to 10 of the Paper Book filed before me.

I find that in the affidavits filed by the brothers of the assessee, they had stated and duly affirmed that they had received sale proceeds on sale of jointly held agricultural land and the sale proceeds thereon were duly deposited in cash in the bank account of the assessee. The breakup of cash deposits made in the bank account are as under:-

The assessee had also filed copy of sale deed and sale agreement copy before the Learned CITA as additional evidences in support of the affidavit in the first round of proceedings. The Learned CITA had ignored the sale agreement and the sale deed in view of the fact that both reflected two different sale consideration figures. The Tribunal in the first round had observed that neither the seller has confirmed the fact that he actually paid Rs 26,87,500/- and not Rs 1,76,500/-. The Tribunal in its order had noted that the Learned CITA ought to have either verified the circle rates of the agricultural land from the office of land registering authority to arrive at the correct value of the land or should have made third party verification regarding the value of rates of land in the vicinity or neighbourhood instead of outrightly rejecting the additional evidences filed by the assessee in a casual manner. Accordingly, the Tribunal had restored the entire appeal to the file of Learned CITA for deciding the same afresh.

In the second round of proceedings, I find that the Learned CITA had merely reiterated the observations made in the first round and dismissed the appeal of the assessee ignoring the directions of the Tribunal . I find that the brothers of the assessee had filed affidavits in support of the fact that they had received sale proceeds from sale of agricultural land and had given that cash to the assessee for depositing in the bank account belonging to the assessee. This affidavit has not been put to test by the revenue. Hence, in the interest of justice and fair play, I deem it fit and appropriate to restore the entire issue to the file of Learned AO for de novo adjudication in accordance with law. The assessee is at liberty to raise all the legal grounds raised before me and also fresh legal grounds before the Learned AO, if he so desires, in support of his contentions. Needless to mention that the assessee be given reasonable opportunity of being heard. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.