BEERASWAMY YOGESHWAR MUDALIAR, AMBIKAPUR,AMBIKAPUR vs. ITO, WARD-1, AMBIKAPUR, AMBIKAPUR

At the very outset, the Ld. Counsel for the assessee submitted that this is a case where the A.O added an amount of Rs.11,45,000/- during the original assessment and consequent to a rectification application filed by the assessee u/s.154 of the Income Tax Act, 1961 (for short ‘the Act’), the said addition was deleted by the A.O. For the sake of completeness, the relevant extract of the order passed by the A.O u/s. 154 of the Act, dated 02.04.2019 are extracted as follows: “Apparent from the record it is observed that in response to the notice u/s. 148 of the IT Act, 1961 the assessee filed return of income on 24-04-2018 showing total taxable income from salary (pension from State Govt.) and submitted written submission on 25-03.2019 to this office, copies of such as ITR-1 along with the computation of taxable income of Rs.3,02,680/-. Regarding cash deposits lump sum amount which were received at the time of retirement by way of PF, gratuity and leave encashment. At the same time, the assessee is having diagnosed with cancer and suffering this decease. The penalty u/s. 271(1)(c) of the Act was initiated, but after rectifying u/s. 154, this penalty does not attract. In response to the notice u/s. 148 of the IT Act, 1961 the assessee filed return of his income on 24-04-2018 vide Ack. No.612516340240418 showing total taxable salary income of Rs.3,02,680/- is accepted, and therefore, the order passed u/s. 144 of the IT Act, 1961 is rectified.”

Thereafter, as per order passed by the Pr. CIT u/s. 263 of the Act, dated 27.03.2021, consequential assessment order was passed wherein again the same amount addition was made vide order passed by the A.O u/s. 147 r.w.s. 263 r.w.s. 144B of the Act, dated 28.03.2022.

That as discernable, the Department had admitted in Section 154 proceedings that source of such cash deposits were from various retirement benefits and therefore, the income was revised and accepted at Rs.3,02,680/- by the A.O. However again the Pr. CIT through his order passed u/s. 263 of the Act had directed the A.O to inquire into the said cash deposits of Rs.11,45,000/- and accordingly, in the consequent order, dated 28.03.2022, the A.O had added the entire same amount of Rs.11,45,000/- in the hands of the assessee.

That during the First Appellate Proceedings, the Ld. CIT(Appeals)/NFAC had given relief of 50% of the said addition.

I am of the considered view that in the original assessment when the amount was added as unexplained money u/s.69A of the Act in the hands of the assessee and thereafter, in the rectification proceedings u/s. 154 of the Act, the Department itself has admitted the validity of the nature and source of such cash deposits i.e. various retirement benefits of the assessee which was deposited. In such scenario, there cannot be any

As per the aforesaid terms grounds of appeal of the assessee are allowed.

In the result, appeal of the assessee is allowed.