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Facts
The Assessee, a non-filer, made substantial cash deposits in bank accounts during FY 2011-12. The Assessing Officer treated these entire deposits as undisclosed income and made an assessment. The CIT(A) upheld this assessment order.
Held
The Tribunal noted that for a prior Assessment Year, the CIT(A) had directed the AO to estimate income based on peak credit. Following the principle of consistency and considering no change in circumstances, the Tribunal directed the AO to estimate the Assessee's income based on peak credit for the year under consideration.
Key Issues
Whether the AO and CIT(A) erred in not considering the peak credit for estimation of income, and whether consistency demands estimation based on peak credit as in a prior year.
Sections Cited
144, 147, 1961
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Income Tax Appellate Tribunal, DELHI
The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre, (‘Ld. CIT(A)’ for short), dated 01/04/2025 for the Assessment Year 2012-13.
Brief facts of the case are that, an assessment order came to be passed on 23/10/2019 bytreating the entire cash deposits as at Rs.
1. 60,75,617/- as undisclosed income of the Assessee. The Assessee preferred an Appeal before the Ld. CIT(A) which has been dismissed on 24/05/2019 vide order impugned. As against the order of the Ld. CIT(A) dated 24/05/2019, the Assessee preferred the present Appeal.
The Ld. Counsel for the Assessee submitted that both the Ld. CIT(A) as well as the A.O. has not considered the peak credit for the year under consideration, however, for Assessment Year 2011-12, Ld. CIT(A) directed the A.O. to estimate the income of the Assessee on the basis of peak credit as appearing the bank account of the Assessee and restricted the addition. Thus, Ld. Assessee's Representative sought for direction to the A.O, to estimate the income of the Assessee on the basis of the peak credit appearing in the bank account.
Per contra, the Ld. Department's Representative relying on the Lower Authorities sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. Assessee was a non-filer for the year under consideration and made cash deposits of Rs.39,73,517/- in his ICICI bank A/c and Rs. 21,02,100/- in PNB A/c during the FY 2011-12.
The Assessee not complied with any of the notices and remained absent in the assessment proceedings and accordingly, A.O. concluded assessment u/s. 144 r.w.s. 147 of Income Tax Act, 1961 vide order dated 23/10/2019 treating the entire cash deposits as at Rs. 60,75,617/- as undisclosed income of the assessee. In first appeal, the assessment order dated23/10/2019 has been affirmed by the Ld. CIT(A).
As could be seen from the order of the Ld. CIT(A) for Assessment Year 2011-12, in similar circumstances, the Ld. CIT(A) ‘found it be fair and reasonable to estimate the income of the Assessee on the basis of peak credit as appearing in the bank account of the Assessee’ and accordingly restricted the addition. Considering the above facts, since there is no change of circumstances in the year under consideration, in order to follow the principals of consistency, we direct the A.O. to estimate the income of the Assessee on the basis of peak credit appearing in the bank account of the Assessee for the year underconsideration. Accordingly, we partly allow the Grounds of Appeal of the Assessee.
7. In the result, the Appeal of the Appellant is partly allowed for statistical purpose.