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Income Tax Appellate Tribunal, PUNE BENCHES “SMC” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHIR VINAY BHAMORE
Assessment Year: 2013-14 Bharat Yashwant Gawas, Vs The Income Tax Officer, Gavthanwadi Zolambe, Ward-1, Kudal. Doodamarg, Sindhudurg, - 416510. Maharashtra. PAN: AUKPG5256A Appellant/ Assessee Respondent / Revenue Assessee by Shri Umesh Kumar Madhukar Mali – AR Revenue by Shri Sandeep P Sathe – JCIT(DR) Date of hearing 20/08/2024 Date of pronouncement 18/09/2024 आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an appeal filed by Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income tax Act, dated 28.11.2023 for the A.Y.2013-14. The assessee has raised the following grounds of appeal :
“1) Ground No.1
On the facts and circumstances of the case and in Law, the Ld.AO erred in making addition of Rs.29,45,400/- as cash deposit in The Laxmi Co-operative bank Limited, Solapur without verifying Whether actually this account belongs to the assessee or not.
1.1) I had never heard name of this bank in his lifetime. The account on which department has reopened the assessment was never belonging to the assessee.
1.2) I had filed RTI application to said Laxmi co operative Bank Ltd. in reply that bank has confirmed that I Does not have any bank account with it.
Prayer I pray that learned AO made an wrong addition hence The order passed needs to be quashed.
2) Ground No.2- The appellant craves leave to add/amend or alter any of the above grounds of Appeal.”
Delay Condonation : 1.1 Assessee filed Affidavit and petition for condonation of delay of 160 days in filing appeal. We are convinced that there was reasonable cause for Delay. Hence, Delay condoned.
Brief Facts of the Case : 2. In this case, it is mentioned in the assessment order that the Assessing Officer received information on AIMS Module of ITBA that the assessee has deposited cash of Rs.29,45,400/-in Savings Bank Account maintained with The Laxmi Co-Op bank Ltd Solapur, during F.Y.2012-13 . The Assessing Officer issued Notice u/s 148 of the Act after recording the reasons. It is mentioned in the Assessment Order that the Assessee failed to file any reply and then Assessing Officer made addition u/s 69A of Rs.29,45,400/-. The assessee filed an Appeal against the Assessment Order before the Ld.Commissioner of Income Tax-Appeal. (CIT_A) the Ld.CIT(A) dismissed the appeal on the ground of Delay. Aggrieved by the order of the Ld.CIT(A) the assessee filed appeal before this Tribunal.
Submission of Ld.AuthorisedRepresentative of the Assessee : 3. The Ld.AR submitted that the Assessee is a poor worker staying in a village of Sindhudurg District, Maharashtra. He does not have any account in The Laxmi Co-Operative Bank Ltd, Solapur. Therefore, there is no question of cash deposit at all. The Assessee had informed this fact vide letter dated 29/12/2021 to ITO, Kudal which has been duly acknowledged by ITO Kudal vide Acknowledgement No.268.Then, the assessee has also informed The Laxmi Co-Operative Bank and the Asst.Commissioner of Income Tax, vide letter dated 28/07/2022 which was duly acknowledged by ITO Kudal, vide Acknowledgement Number 139 dated 01/08/2022.Copy of the said letter was also marked to Superintended of Police, Sindhudurg.Ld.AR filed a paper book. Ld.AR invited our attention to a letter dated 12/01/2024 issued by Chief Executive Officer of The Laxmi Co-Operative Bank Ltd Solapur, stating that the bank does not have any account in the name of Bharat Yashwant Gawas. Therefore, Ld.AR pleaded that assessee has not deposited any cash. Ld.AR pleaded to delete the addition.
3.1 The ld.AR also pleaded that the reopening is bad in law, as the Assessing Officer(AO) was not having any information to reopen the assessee’s case. Since assessee does not have any bank account, explains that the information which was in the possession of the AO is factually incorrect. Hence, notice u/sec.148 issued based on factually incorrect information is bad in law. Ld.AR relied on the case laws.
Submission of ld.DR :
The ld.DR for the Revenue filed a copy of reasons recorded by the AO, dated 29.01.2020. The ld.DR also filed copy of the Screenshot regarding the information which was available with the AO. At our request Ld.DR also filed copies of the letters dated 28/07/2022, 29/12/2021 written by the assessee to ITO Kudal, obtained from ITO Kudal. Ld.DR strongly relied on the order of AO and ld.CIT(A).
Findings and Analysis:
We have heard both the parties and perused the records. We have studied the reasons recorded by the Assessing Officer and the copy of the information which was available with the AO, which is referred as “NMS Data available in AIMS Module of ITBA”. The impugned information which was available in ITBA Module is reproduced here as under :
R R A T N T T Tr T D T Tx Tr T Jo Tr Tr F Tr B U A P D P R R c xn a ra r an r a r n an x int an an I an R pl GE o a A R R t P m ns a sa a t a Pa sac n Tr sa sa L sa A o NC s t N Nu u ar e ac n cti n a n rt tio P an cti cti E cti N a Y ti a D mb a ty M ti s on s D s y n a sa on on R on C d FIl n a er l N at on a De a et a N on r cti D A Fil H T er g D t L a c P c sc c a c a Pa t on at m N er A y AD D e e i m h ar ti ri ti II ti m rty y Pa e ou A T D p DR a t n e Fl ty o pti o o e Ad C rt nt M A D e ES t a e as a N n on n n as dr it y E N R S e N pe g a C A T pe ess y C E i I o r m o m y r ou S n I A e d o p CI nt S I IS e u e B T n In S t fo r m ati on 9/ 990 1 B M B 0 00 2 4 A B A/P B 1 31/ 0 B M L O 8 2 A 0 000 0 H A H 0 1- 9 7 I H ZO A 01/ A U A RI 5, 0 U 8/ 000 7 A T A 1 DE 4 7 R A LA N 20 N M X GI ST 1 KP 0 006 0 R C R PO 5 4 R TA D 13 D B MI N AR 2 G5 1 500 6 A H A SI 4 7 AT L A A 11 X A HO 25 3 T E T TE 0 2 Y DO 42 C L US 6A
Y D Y D 0 4 AS DA 3G O R E, AS AS C 7 H MA P E G,B H H AS W RG O T AN W W H A A/P X U DR A A OF NT ZO L R A N N Rs. G LA A N KU T T 10 A MB X RL G G 00 W E MI A A A 00 AS GA X CO W W 0 VT C MP AS AS O AN O LE R W M X, M AD PL MU O I, E MB RE BA X AI, IN ND X 400 A A X 051 SA 416 O VI 511 P N P G X B N A P N O K X A/ B C P O X B A N D A X X T A L X X S A W A N T W, P O X B A N D A X X T A L X X S A W A N T W 41 65 11
The AO has relied on the above information which was available on NMS Data. The entire “reasons for reopening” are merely referring to this “NMS Data”. It means that Assessing Officer has merely relied on the impugned NMS Data. No verification has been carried out by the AO. We have keenly studied the impugned NMS Data. Nowhere in the data, the Bank Account Number is mentioned. Therefore, the information on NMS Data is vague. The AO has not independently carried out any verification with reference to the said data. Thus the reasons recorded by the AO are based on vague, nonspecific information.
6.1 The Hon’ble Supreme Court of India in the case of Ganga Saran & Sons P Ltd V ITO [1981] 130 ITR 1 (SC) has observed as under : Quote,“The important words under section 147(a) are "has reason to believe" and these words are stronger than the words "is satisfied". The belief entertained by the ITO must not be arbitrary or irrational. It must be reasonable or in other words it must be based on reasons which are relevant and material. The Court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the ITO in coming to the belief, but the Court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147(a ). If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the ITO could not have reason to believe that any part of the income of the assessee had escaped assessment” Unquote.
The assessing officer should have reasons to believe that the taxable income has escaped assessment. The process of reassessment cannot be triggered based on a mere suspicion. The expression "reason to believe" which is found in Section 147 of the Act does not have the same connotation as "reason to suspect". The order recording reasons should fill this chasm. The material brought to the knowledge of the assessing officer should have nexus with the formation of belief that the taxable income of the assessee escaped assessment; the link being the reasons recorded, in that behalf, by the Assessing Officer.The reasons must demonstrate that the material used by the Assessing Officer to reopen, is reasonably capable of formation of his belief that income has escaped assessment. The belief does not mean purely subjective satisfaction on the part of the concerned officer, it must be held in good faith. In this case the Reasons are merely based on the NMS data, which we have already reproduced in earlier paragraph, from the impugned NMS Data, it is difficult for any individual well informed of facts and law to arrive at a conclusion that Income has escaped assessment. Even for argument-sake it is presumed that the assessee had deposited the impugned amount in the Bank, how one can arrive at the Prima facia belief that income has escaped assessment without carrying out basic verification! 7.1 Therefore, in these facts and circumstances of the case, we are convinced that the AO had no reasons to believe that income had escaped assessment in the case of the assessee. Hence the Notice u/s 148 issued in this case is bad in law. Hence the Assessment Order is bad in law.
7.2 In the assessment order, the AO has merely stated that assessee failed to file reply to various notices, hence, AO added Rs.29,45,400/- u/sec.69A of the Act. It is observed that the assessee had filed reply to notice dated 08.03.2021 in Marathi, stating that assessee does not have any account in the Laxmi Co- Operative Bank Ltd. 7.3 In this case the AO has made addition merely based on the impugned “NMS data”. The AO has not obtained copy of Bank statement and KYC details from the Bank u/sec.133(6) of the Act. The CBDT had instructed all AOs to obtain these details from Bank in such cases. But AO failed to make any inquiry.
7.4 The Ld.CIT(A) had merely dismissed the appeal. The Ld.CIT(A) had failed to consider the fundamental submission of the assessee that he had no account in the impugned bank, hence there is no question of deposits in the said bank.
7.5 The Assessee had denied having any Bank Account in The Laxmi Co-Operative Bank Ltd Solapur, and this submission has not been rebutted by any evidence by Ld.DR. Rather at our request the Ld.DR had asked the ITO Kudal to verify and the ITO Kudal had filed copies of the same letters written by the assessee to the ITO Kudal denying any bank account in The Laxmi Co-OP Bank Ltd Solapur. In this case the Revenue has not brought on record any positive evidence to prove that the Assessee had an account in The Laxmi Co-Operative Bank Ltd, Solapur. In the Assessment Order the AO has not even mentioned any Bank Account Number.
7.6 Therefore, in these facts and circumstances of the case, we are of the opinion that the Addition made by the AO of Rs.29,45,400/- is without any positive evidence and hence unsustainable in the eyes of law. Accordingly, the AO is directed to delete the addition of Rs.29,45,400/- made u/s.69A of the Act.
Accordingly grounds of appeal raised by the Assessee are allowed. Order pronounced in the open Court on 18th September, 2024.