SHEKHAR SANJAY JADHAV,SATARA vs. INCOME TAX OFFICER, SATARA

।आयकर अपीलीय अिधकरण ”एस एम सी” �ायपीठ पुणेम�। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.1645/PUN/2024 िनधा�रण वष� / Assessment Year: 2017-18 Shekhar Sanjay Jadhav, Vs The Income Tax Officer, At Post Wadhe, Tal-Satara, Satara. Dist-Satara – 415011. PAN: ANNPJ5563F Appellant/ Assessee Respondent / Revenue Assessee by None Revenue by Shri B S Rajpurohit – Addl.CIT(DR) Date of hearing 23/09/2024 Date of pronouncement 27/09/2024 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: The appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC] for A.Y.2017- 18, under section 250 of the Income Tax Act, 1961 dated 03.06.2024.

Brief facts of the case : 2. In this case, as it appears from the assessment order that assessee had filed Return of Income(RoI) electronically for

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A.Y.2017-18 on 30.03.2018 declaring total income of Rs.3,56,940/-. In the assessment order, it is mentioned by the AO that Assessee’s case was selected for limited scrutiny for the reason of “large cash deposit”. AO had issued notices electronically on 08.08.2018, 16.09.2019, 14.10.2019 and 05.12.2019. The notice dated 05.12.2019 was a show-cause notice asking assessee to file reply on or before 10.12.2019. Thus, ld.AO had given only five days time to assessee for giving reply. AO has mentioned in the assessment order that since no reply was filed, AO made addition of Rs.28,82,500/- which was the alleged amount of cash deposited in the saving bank account maintained with State Bank of India(SBI). Aggrieved by the assessment order, assessee filed appeal before the ld.CIT(A). The ld.CIT(A) confirmed the addition made by the AO. Hence, assessee filed appeal before this Tribunal

Submission of the Assessee : 3. At the outset of hearing, no one appeared on behalf of the assessee. However, the written submission enclosed with the appeal memo is reproduced as under:

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“1) Nature of Activity : Assessee Mr.Shekhar Sanjay Jadhav was in business of trading of Selling of Judicial and Non-Judicial Stamp Papers in AY 2017-18. 2) Purchase from Treasury Office.Govt of Maharashtra : Assessee has purchased Stamp Papers and sold to customers.Customers paid cash against purchasing stamp papers.Assessee deposited such sale proceeds in SBI Savings Bank Account. 3) Nature of Cash Deposit : Cash Deposited in SBI’s Savings Account is regarding Cash received from Customers in respect of Selling of Stamp Papers. 4) Only Commission received against Sale of Stamp Papers : Assessee received only commission against sale of stamp papers. Assessee also filed ITR on 30-03-2018 and declared Income of Rs.3,64,591/- as business Income. 5) Holding of Legal License under Stamp act : Assessee hold License for Sale of Stamps under the Indian Stamp act,1899 & Bombay Stamp Act, 1968. License No : 2301028 Date of Issue : 27-Jan-2010 6) Filing of ITR on 30-Mar-2018 : Assessee had filed ITR on 30-Mar- 2018 showing Total Income of Rs.3,56,940/- and paid Tax Rs.6,330/-. 7) Payment of Purchasing of Stamp Papers : Assessee purchased stamp papers from Treasury Office and paid amount from SBI Savings Bank Account to treasury.Hence,Business of assessee is nature of Cash sales 100%.” 4. Ld.Departmental Representative of the Revenue relied on the order of the Assessing Officer(AO) and ld.CIT(A).

Findings &Analysis : 5. We have heard ld.DR for the Revenue and perused the records.

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5.1 In para 2, ld.CIT(A) has mentioned as under : “2) The Return of Income was E-filed declaring income of Rs.3,56,940/- on 30-3-2018. After selection of the case for scrutiny under CASS and a notice u/s 143(2) was issued on 08-08-2018. The assessment was reopened and it is stated, the reasons for reopening were issued to the assessee. Though A. O. states the assessment was reopened by supplying ‘reasons’ for the same there is no reference to the issue and service of ‘mandatory’ notice underS.148 of the Act. But it appears the Return of Income was filed under S. 139(4) of the Act. The A.O. issued show-cause notice before completion of assessment as reproduced in the assessment order as below:” 5.2 Then, ld.CIT(A) has discussed the Demonetization Legislation, RBI Guidelines etc., Finally, ld.CIT(A) held as under: “ It is seen from the order passed by the AO, that an amount of Rs.28,82,500/- was deposited in the State Bank of India account maintained by the appellant. Various notices were issued by the AO and the appellant was afforded sufficient opportunity to explain the deposit made with documents and evidences. However, it is seen that the appellant chose to remain silent during the course of the assessment proceedings. Furthermore, during the appellate proceedings too, the appellant has not submitted any documents and evidences to substantiate the source of cash deposit. He just simply submitted that he is engaged in the business of sale and purchase of stamp paper. Neither did he submit the list of the names from whom the said cash was received not the copy of the bank statement. Furthermore, neither did he submit any comparison of cash deposited in earlier or later’s years so as to establish that his line of business did involve deposit of cash. No profit and loss statement or Balance sheet pertaining to the said business was submitted. Hence, in the light of the above and after perusal of the submission made and taking into account the entire conspectus of this case, it is clear that the appellant has failed to discharge the onus by cogent evidence either by establishing the source of cash deposit or genuineness of the transaction. Accordingly, I see no reason to interfere with the order of the Assessing Officer regarding the addition on account of the cash deposit made to the

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total income of the appellant. Hence, this ground of appeal is Dismissed.” 5.3 Thus, it is observed that ld.CIT(A) has mentioned in para 2 of the order that Assessing Officer had supplied reasons for re- opening. Ld.CIT(A) further mentioned that there is no reference to the issue and service of mandatory notice u/sec.148 of the Act. Thus, ld.CIT(A) is referring to some proceedings u/s.148 of the Act in his order, however, in the assessment order, the section mentioned is 143(3)r.w.s. 144 of the Act. However, in the assessment order, it is mentioned that Questionnaire was issued for reasons for reopening. Thus, both ld.AO and as well as ld.CIT(A) were not clear. The concluding paragraph number 3 and 4 of the assessment order are reproduced as under : “03. The assessee did not respond to the Show cause notice, as asked for on 05/12/2019 till date. Since no details have been submitted by the assessee, as called for it is concluded that the assessee has no explanation to offer. Hence, I have no alternative but to complete the assessment Ex-parte as per the provisions of Sec.144 of the I.T.Act, on the basis of material on record and on the merits of the case as under: 04. As per ITS data it was known that the assessee has deposited cash of Rs.28,82,500/- in his savings bank account in State Bank of India during the F.Y.2016-17. The onus of explaining the sources of these cash deposits with documentary evidences in respect of claim of source was on the assessee. The assessee failed to explain the sources of the above cash deposits in his bank account. In view of the same, the entire amount of Rs.28,82,500/- credited in the assessee’s bank account is hereby treated as an unexplained money u/s 69A r.w.s 115BBE of the Income-tax Act, 1961 for the A.Y.2017-18. Hence, the assessee is also liable to penalty u/s 271AAC of the Income-tax Act,

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1961. Accordingly, penalty proceedings u/s 274 r.w.s 271AAC of the Income-tax Act, 1961 are separately initiated.” 5.4 Thus, it can be seen from the assessment order that Assessing Officer has not even bothered to get copy of the bank statement for F.Y.2016-17 of the assessee from the bank. Though the CBDT had instructed all the Assessing Officers to collect copy of Bank statements from the Bank wherever the case was selected for the reason of cash deposits. The AO has merely added Rs.28,82,500/- which were appearing in the “ITS Data” without verifying whether actually there were impugned deposits in the assessee’s bank account or not ! The ld.CIT(A) has also not bothered to verify these facts.

5.5 Ld.CIT(A) has also not adjudicated the assessee’s ground that only income needs to be taxed and not entire amounts appearing in the bank account. Ld.CIT(A) has to decide the grounds of appeal raised by the assessee. In this case the Ld.CIT(A) has failed to adjudicate one of the ground raised by the assessee.

5.6 In these facts and circumstances of the case, we set aside the order of the Ld.CIT(A) to Ld.CIT(A) for de-novo adjudication.

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The Ld.CIT(A) shall provide opportunity of hearing to the Assessee. The Assessee shall file the relevant documents before the Ld.CIT(A). In the result appeal of the assessee is allowed for Statistical Purpose.

Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 27th Sep, 2024/ SGR* आदेशक��ितिलिपअ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” ब�च, 5. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड�फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.