Loading judgment…
Facts
The assessee is the trustee of M/s Green Park Educational institutions. A search and survey were conducted, and summons were issued. The Assessing Officer (AO) framed an assessment u/s 144 r.w.s. 148 of the Act, making an addition of Rs. 9.34 Lacs. The Commissioner of Income Tax (Appeals) [CIT(A)] confirmed this addition.
Held
The Tribunal held that the assessee's argument regarding the absence of a notice u/s 143(2) was not sustainable as the return was filed manually with considerable delay. Regarding the merits, the Tribunal found that the sale and purchase of land for Rs. 1.07 Lacs and Rs. 9.34 Lacs respectively, within the same year, was evidenced by sale deeds, and the source of cash balance was sufficiently proven.
Key Issues
Whether the addition of Rs. 9.34 Lacs on account of unexplained cash balance is sustainable when the assessee has provided evidence of land sale and purchase. Whether the assessment proceedings are vitiated due to non-issuance of notice u/s 143(2) and absence of approval mentioned in notice u/s 148.
Sections Cited
144, 148, 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: HON’BLE SHRI ABY T. VARKEY, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
सुनवाईकीतारीख/Date of Hearing : 21-08-2024 घोषणाकीतारीख /Date of Pronouncement : 03-09-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2013-14 arises out of the order of learned Commissioner of Income Tax (Appeals)-20, Chennai [CIT(A)] dated 31.03.2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.144 r.w.s. 148 of the Act on 30.09.2021. The sole grievance of the assessee is confirmation of addition of Rs.9.34 Lacs. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. The assessee assails the reopening on legal grounds also. Having heard rival submissions, the appeal is disposed-off as under.
From assessment order, it could be seen that the assessee is trustee of M/s Green Park Educational institutions. The group was searched u/s 132. Survey u/s 133A was also conducted in the case of three firms wherein the assessee acted as Manager. The summons u/s 131 were issued to the assessee and his statement was also recorded. The requisite notice u/s 148 was issued to the assessee on 23.03.2020 and the assessee filed manual return of income on 25.08.2021. The incriminating document as found during search revealed that the assessee advanced loan of Rs.14.50 Lacs and accordingly, the assessee was required to explain the source thereof. The assessee offered additional income of Rs.5.16 Lacs and the remaining amount of Rs.9.34 Lacs was stated to be sourced out of opening cash balance which was derived from sale of plots on agricultural lands. However, rejecting the explanation of the assessee, Ld. AO added the amount of Rs.9.34 Lacs to the income of the assessee. The Ld. CIT rejected the legal grounds urged by the assessee. The grounds on merits were also dismissed. Aggrieved, the assessee is in further appeal before us.
The Ld. AR, in the written submissions, has urged a legal ground that in the absence of any notice u/s 143(2), the assessment proceedings would be bad-in-law. Another ground is that there is no mention of approval in notice u/s 148 as issued to the assessee. To counter the same, the revenue has placed on record report of Ld. DCIT, Central Circle-3, Coimbatore wherein it has been stated that a proposal to reopen the case of the assessee was sent through Ld. JCIT, Central Range on 11.03.2020 and the approval was accorded on 17.03.2020.
Thereafter, notice u/s 148 was issued on 23.03.2020. The copies of all these documents have been placed on record. Upon perusal of all these documents, it could be seen that the requisite approval was taken by Ld. AO while reopening the case of the assessee. Therefore, no substance could be found in the allegation of Ld. AR. So far as the notice u/s 143(2) is concerned, we find that the assessee has not filed return of income as required under law against issuance of notice u/s 148. The return of income has been filed manually with inordinate delay towards fag-end of culmination of assessment proceedings. Therefore, the argument of non- issuance of notice u/s 143(2) is also not to be accepted.
So far as the merits of the case is concerned, upon perusal of para 7.4.2.3 of impugned order, it could be seen that the assessee purchased 1.07 acres of land on 18.11.2009 for Rs.1.07 Lacs and sold the same in that year only for Rs.9.34 Lacs. The Ld. CIT(A) has doubted the same on the ground that such increase was not possible within few days overlooking the fact that the sale and purchase transactions was evidenced by relevant purchase / sale deeds as furnished by the assessee during the course of appellate proceedings. Therefore, the source of opening cash in hand could not be doubted once the assessee had discharged the burden of proving the same. Therefore, the impugned addition of Rs.9.34 Lacs is not sustainable on merits. We order so.
The appeal stands partly allowed. Order pronounced on 3rd September, 2024 Sd/- Sd/- (ABY T. VARKEY) (MANOJ KUMAR AGGARWAL) �ाियक सद" /JUDICIAL MEMBER लेखा सद" / ACCOUNTANT MEMBER चे5ई Chennai; िदनांक Dated :03-09-2024 DS आदेशकीHितिलिपअ'ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. � थ�/Respondent 3. आयकरआयु>/CIT Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाडCफाईल/GF