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Income Tax Appellate Tribunal, DELHI BENCH : SMC-1 : NEW DELHI
Before: SHRI R.K. PANDA
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER Assessment Year: 2010-11 Sunil Kumar, Vs. ITO, H. No.259, Gali No.2, Ward-4, Vikas Nagar NR NFL, Panipat. Panipat, Haryana. PAN: AUYPK2836J (Appellant) (Respondent) Assessee by : Shri J.B. Sharma, Advocate Revenue by : Shri Om Prakash, Sr.DR Date of Hearing : 02.11.2021 Date of Pronouncement : 16.11.2021 ORDER
This appeal filed by the assessee is directed against the order dated 23rd April, 2019 of the CIT(A), Karnal, relating to Assessment Year 2010-11.
Although a number of grounds have been raised by the assessee, these all relate to the order of the CIT(A) in upholding the validity of reassessment proceedings and thereby sustaining addition of Rs.11,37,847/- made by the AO u/s 69A of the IT Act.
Facts of the case, in brief, are that the assessee is an individual. As per Non PAN AIR information available with the Department it was found that the assessee deposited cash of Rs. 11,37,847/- in S.B. Account number 15460100007193 maintained by him with The Federal Bank Ltd., Panipat during the financial year 2009-10. The assessee was issued a letter No. Non PAN/201/8263 dated 14.02.2017 requiring him to furnish a photocopy of PAN card and if he is not assessed to tax give the details of the sources of financial transactions along with copies of documents in support of his claim. No compliance of the said letter was made. The AO noted from the records that the assessee had not filed his return of income for the asstt. year 2010-11. Therefore, for verification of the source of cash deposited in bank account and other credit entries proceedings u/s 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) were initiated and notice u/s 148 of the Act was issued on 27.03.2017, after recording reasons, and the same was sent through ‘Regd. Post’. In response to notice u/s 148 of the Act, the assessee was required to file his return of income within thirty days from the service of notice, but no return of income was filed within the stipulated period of thirty days. On 14.08.2017 notice u/s 142(1) of the Act along with questionnaire was issued and duly served through Speed Post requiring the assessee to furnish the following information/details on 22.08.2017:- i. Nature and sources of his income.
ii. Furnish return of income in response to the notice issued u/s 148 of the Act for the Asstt. Year 2010-11. iii. Furnish source of cash amounts deposited in bank account maintained with The Federal Bank Ltd., Panipat during financial year 2009-10 and also furnish narration of all the bank entries with relevant documentary evidences. iv. Furnish bank statement(s) of all other bank account(s) and FDRs, if any, maintained by him during the financial year 2009-10 with narration of all entries.
Since there was no compliance from the side of the assessee, the AO proceeded to complete the assessment u/s 144 of the IT Act, 1961. Invoking the provisions of section 69A of the IT Act, the AO made addition of Rs.11,37,847 to the total income of the assessee. He also made addition of Rs.632/- being the interest credited in the bank account, but, not offered for taxation. Thus, the AO determined the income of the assessee at Rs.11,38,480/-.
Before the CIT(A), the assessee, apart from challenging the addition on merit, challenged the validity of reassessment. However, the ld.CIT(A), was not satisfied with the arguments advanced by the assessee and upheld the validity of reassessment as well as the addition on merit by observing as under:- “Findings:-
I have examined the facts of the case, the remand report of the Assessing Officer (A.O.) and the counter comments of the assessee in response to the remand report. In this case, notice u/s 148 of the I.T. Act, 1961 had been issued to verify cash deposits of Rs. 11,37,847/- made by the assessee during the year in his account maintained with The Federal Bank, Panipat. The notice was not returned back undelivered. Hence, proper service is attributed. Therefore, there is nothing contrary legally in the proceedings under the Act. As far as the examination of the cash deposit amounts is concerned, the appellant has sought to explain the same as sales consideration arising out of the business of the appellant. However, the assessee on being asked to furnish details in support of the said earnings could not furnish confirmed copies of accounts from the books of respective parties from whom purchases were made. No copies of transport bilties and dharamkanta receipts were furnished. No return of income had been filed by the assessee. The assessee, therefore, failed totally to substantiate his explanation with any concrete documentary evidence even at the appellate stage. Hence, in view of the fact, that ail entries remained unexplained, I confirm the addition made. These grounds of appeal are dismissed.”
6. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.
The ld. Counsel for the assessee, at the time of hearing, did not press the grounds challenging the validity of reassessment proceedings. So far as the addition on merit is concerned, the ld. Counsel submitted that the lower authorities have not properly appreciated the facts of the case. He submitted that the assessee is doing the business of handloom goods with small turnover of Rs.13,26,150/- and earned income of approximately Rs.1,19,000/-. He submitted that the deposit in the bank account is out of his business proceeds and the lower authorities have erroneously made the addition treating the same as unexplained
cash deposit. He submitted that given an opportunity, the assessee is in a position to substantiate his case with evidence to the satisfaction of the AO regarding the nature and source of deposits. He accordingly submitted that he has no objection if the matter is restored to the file of the AO for adjudicating the issue afresh.
The ld. DR, on the other hand, supported the order of the ld.CIT(A). He, however, has no objection for setting aside the matter to the file of the AO.
In view of the submissions made by the assessee and considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate his case and decide the issue as per fact and law. The assessee is hereby directed to appear before the AO and substantiate his case without seeking any adjournment under any pretext, failing which, the AO is at liberty to pass appropriate order as per law. I hold and direct accordingly. The grounds raised by the assessee is allowed for statistical purposes.