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Facts
The assessee's twin appeals concern assessment year 2011-12 and arise from an order by the CIT(A)/NFAC. Lower authorities treated cash deposits of Rs. 13,28,528/- in the assessee's bank account as unexplained under sections 68/69A of the Act.
Held
The Tribunal acknowledged that neither party fully proved their case. Considering the assessee's socio-economic status, it was inferred that some accumulated past savings might exist. Therefore, the addition was restricted to Rs. 5 lakhs as a lump sum, not to be treated as a precedent.
Key Issues
Whether the cash deposits in the bank account can be treated as unexplained income, and whether a penalty under section 271(1)(c) is sustainable.
Sections Cited
271(1)(c), 274, 68, 69A
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Income Tax Appellate Tribunal, AGRA BENCH, “SMC” AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
PER SATBEER SINGH GODARA, JM These assessee’s twin appeals & 205/Agr/2023 for assessment year 2011-12, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order nos. ITBA/NFAC/S/250 /2023-24/1053359491(1) and ITBA/NFAC/S/250/2023- 24/1053355418(1), dated 31.05.2023 involving proceedings under sections 271(1)(c) and 274 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), respectively.
Heard both the parties. Case file perused.
We advert to the assessee’s quantum appeal ITA No. 205/Agr/2023. The delay of 131 days in filing the assessee’s instant appeals stands condoned as per his contentions/averments explaining reasonable cause on account of the situation beyond his control.
It emerges during the course of hearing that both the lower authorities have treated the assessee’s cash deposits in bank account to the tune of Rs.13,28,528/- as unexplained under section 68/69A of the Act.
Learned counsel’s case before us in these circumstances is that the assessee herein is a small contractor having derived various business receipts in cash and some of the cash deposits herein represent his personal and his family’s “accumulated” past savings etc.
The Revenue’s case, on the other hand, is that it was the assessee’s bounden duty to plead and prove all the relevant facts,
2 | P a g e and, therefore, the impugned addition forming subject matter of our adjudication deserves to be upheld.
We have given our thoughtful consideration to the assessee’s and Revenue’s vehement rival submissions, we do not see any reasons to express our concurrence with either parties’ stand in entirety. This is for the precise reason that neither the assessee has pleaded or prove all the foregoing facts all along, nor the department could rebut the necessary inference that the taxpayer could very well be presumed as having some accumulated past savings, keeping in mind his socio-economic stats. We thus deem it appropriate in these peculiar facts and circumstances to restrict the impugned addition of Rs.13,28,528/- to a lump sum amount of Rs.5 lakhs only with a rider that the same shall not be treated as a precedent. The assessee gets the relief of Rs.8,28,528/- in other words. His appeal is partly accepted.
Coming to the assessee’s consequential penalty appeal the Revenue could hardly dispute that section 271(1)(c) penalty in an instance of such an estimated cash deposits addition, would not be sustainable in law going by the CIT v. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 since involving