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Assessee represented by Ms. Chaitali Shah, C.A. Department represented by Shri Vinod Kumar, Sr. DR Date of hearing 28/06/2023 Date of pronouncement 30/08/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A)) dated 19/05/2022 for the Assessment Year (AY) 2011-12. The assessee has raised following grounds of appeal: “1. The ld. CIT(A) erred in law and on facts of the case erred in confirming the decision of Assessing Officer in making addition as explained FD of Rs. 12,55,000/-.
2. The ld. CIT(A) erred in law and on facts of the case in confirming the decision of Assessing Officer in making addition u/s 69 of IT Act of Rs. 2,40,000/-.
3. Your Appellant craves the leave to add, alter, amend, modify, delete and append any of the grounds of appeal.” Vide application dated 08/05/2023, the assessee has raised following additional ground of appeal:
Bhaktikishoredas Dharmtanyadasji Swami Vs ITO “ On the facts and in circumstances of the case as well as law on the subject, the ld. CIT(A) erred in confirming the action of Assessing Officer in reopening assessment u/s 147 by issuing notice u/s 148 of the I.T. Act, 1961.”
Perusal of record shows that the impugned order was passed by the ld. CIT(A) on 09/05/2022, however, the present appeal is filed on 11/10/2022, thus there is a delay in filing appeal before the Tribunal. The assessee in para 3 of Form No. 36 has mentioned that the order of ld. CIT(A) was communicated on 30/06/2022. On the basis of such date of communication, the Registry of this Tribunal calculated the delay of 43 days in filing appeal. The assessee has filed application for condonation of delay which is supported by the affidavit of assessee.
The learned Authorised Representative (ld. AR) of the assessee submits that there is a small delay of 43 days in filing appeal from the date of communication of order of ld. CIT(A). The assessee is a Sanyasi and associated with Shree Swaminarayan Seva Gurukul Trust. The ld. AR of the assessee further submits their office prepared draft of appeal in September, 2022, though there was a little delay of more than a week at the time of preparation of appeal, however, due to heavy rain and water logging in around Gurukul road, Vapi, the required details and paper could not be shared with assessee. The delay in filing appeal is neither intentional nor deliberate but due to the rainy season and water logging in the area. The assessee has good case on merit and likely to succeed, if the delay is condoned and appeal is heard on merit. The ld. AR of the assessee submits that the assessee is not going to be Bhaktikishoredas Dharmtanyadasji Swami Vs ITO benefitted by filing appeal belatedly rather there is a chance that application for condonation of delay may not be accepted for some reasons. The ld. AR of the assessee prayed for condonation of delay and to allow her to make submission on merit.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the approach of assessee is casual in seeking condonation of delay. The ld. Sr. DR for the revenue despite opposing the cause of delay, submits that the Bench may take a view in accordance with its discretion.
I have considered the submissions of both the parties and keeping in view the fact explained by the ld. AR of the assessee which is supported by the affidavit of assessee that there is no intentional or deliberate delay, the delay was mainly occurred due to heavy water logging in an around, Shree Swaminarayan Seva Trust, Gurukul Road, Vapi. I also find merit in the submission of ld. AR of the assessee that by causing delay, the assessee is not going to be benefitted, therefore, keeping in view the cause of substantial justice, the delay of 43 days in filing appeal is condoned. Now adverting to the merit of the case.
Brief facts of the case are that the assessee has not filed return of income for A.Y. 2010-11. The case of assessee was reopened on the basis of information that the assessee made time deposit of Rs. 12.55 lacs in bank. Notice under Section 148 of the Income Tax Act, 1961 (in short, the Act) was issued on 28/03/2018 after recording reasons of 3 Bhaktikishoredas Dharmtanyadasji Swami Vs ITO reopening. In response to notice under Section 148, the assessee filed return of income on 07/04/2018 declaring taxable income of Rs. 1,31,500/-. The assessee requested for reasons recorded. The Assessing Officer recorded that the reasons recorded was provided to the assessee vide his letter dated 24/04/2018.
The assessee objected against reopening. The objection of assessee was recorded in para 2 of assessment order. In the objection, the assessee objected that case of A.Y. 2009-10 was also reopened on account of cash deposit in excess of Rs. 10.00 lacs in Savings bank account. The Assessing Officer after scrutiny of all the records, was satisfied that savings bank account in which cash in excess of Rs. 10.00 lacs has been deposited belonged to a trust namely Shree Swaminarayan Seva Trust and the Assessing Officer accepted the returned income and granted refund of Rs. 5,030/-. The assessee also stated that on account of reporting of Bank of India as holder of savings bank account, instead of authorised signatory in the savings bank account of Shree Swaminarayan Seva Trust, the reopening process was initiated. The case is reopened for the same reason for the year under consideration.
The objection of assessee was rejected by the Assessing Officer. The Assessing Officer in para 2.1 of assessment order, recorded that case for A.Y. 2009-10 was reopened on the basis of information relates to cash deposit of Rs. 10.00 lacs whereas for A.Y. 2011-12, the case was reopened on the basis of financial transaction of time deposit of Rs. 4 Bhaktikishoredas Dharmtanyadasji Swami Vs ITO 12.55 lacs. Hence, the reasons of reopening for A.Y. 2009-10 and 2011- 12 are totally different. The Assessing Officer after rejecting the objections, proceeded for reassessment. The Assessing Officer recorded that he has issued show cause notice to the assessee for furnishing details of term deposit. The Assessing Officer recorded that despite giving final show cause notice, the assessee has not furnished required details. The Assessing Officer on the basis of information available with him, made addition of Rs. 12,55,000/- and also made addition on account of cash deposit of Rs. 2,40,000/- and on account of interest income of Rs. 19,280/-.
Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). The ld. CIT(A) upheld the action of Assessing Officer by taking a view that the assessee has failed to prove his case before the Assessing Officer as well as in appellate proceedings and he deemed fit not to interfere with the assessment order. Further aggrieved, the assessee has filed present appeal before the Tribunal.
I have heard the submissions of ld. AR of the assessee and the ld. Sr. DR for the revenue. The ld. AR of the assessee submits that she has raised additional ground of appeal vide application dated 08/05/2023. The additional ground of appeal is purely legal in nature for challenging the validity of reassessment under Section 147 and notice under Section 148 of the Act. The assessee has objected right from the beginning against reopening as well as raised similar grounds of appeal before the 5 Bhaktikishoredas Dharmtanyadasji Swami Vs ITO ld. CIT(A). The ld. AR of the assessee submits that no new facts is to be brought on record for adjudicating additional ground of appeal
. The fact required for adjudication of additional ground of appeal is emanating from the orders of the lower authorities. To support her submission, the ld. AR of the assessee relied on the decision of Hon'ble Supreme Court in National Thermal Power Corporation Vs CIT 229 ITR 383 and Jute Corporation of India Vs CIT 187 ITR 688.
11. On the other hand, the ld. Sr. DR for the revenue submits that the assessee has not raised this ground of appeal at the time of filing original grounds of appeal and it should not be allowed at this stage.
12. I have considered the submissions of both the parties and perused the record carefully. I find that the case was of assessee was reopened under Section 147 of the Act. The assessee filed return of income in response to notice under Section 148 on 07/04/2018. The assessee immediately on filing return of income, requested for supply of reasons recorded. The reasons recorded were supplied to the assessee by the Assessing Officer on 30/05/2018. The assessee immediately filed his objection, objecting the reopening. The grounds of objection are recorded by Assessing Officer in para 2 of assessment order. Though, the Assessing Officer rejected the objection of assessee. The assessee also raised ground against reopening while filing appeal before the ld. CIT(A), thus in my considered view, the facts related to adjudication of additional ground of appeal are clearly emanating from the orders of 6 Bhaktikishoredas Dharmtanyadasji Swami Vs ITO lower authorities, and no new facts are to be brought on record, therefore, additional ground of appeal raised by assessee is admitted. Now adverting to adjudication of additional ground of appeal as well as original ground of appeal raised by assessee.
13. I have heard the submissions of ld. AR of the assessee and the ld. Sr. DR for the revenue. The ld. AR of the assessee submits that the case of assessee for A.Y. 2009-10 was also reopened on the basis of similar information that the assessee made cash deposit of Rs. 10.00 lacs. The assessee contested the reassessment proceedings and filed return of income. The assessee explained the fact that deposit in bank belongs to Shree Swaminarayan Seva Trust. The Assessing Officer after considering the deposits in bank and accepted the fact that nothing adverse was find against the assessee and nothing was added out of the information, on the basis of which, case was reopened. The ld. AR of the assessee submits that similar amount which was the subject matter of reopening for A.Y. 2009-10 was invested in term deposit/time deposit, such amount belongs Shree Swaminarayan Seva Trust having PAN No. AACTS0346K. The assessee is merely an authorised signatory of said bank. The ld. AR of the assessee submits that once the bank account has been accepted after detailed investigation, the same issue cannot be re-agitated every year. The ld. AR of the assessee filed copy of assessment order for A.Y. 2009-10 dated 27/10/2016 passed under Section 143(3) r.w.s. 147 of the Act. The ld. AR of the assessee further 7 Bhaktikishoredas Dharmtanyadasji Swami Vs ITO submits that there is no new deposit in the current assessment year except the deposit in earlier years which was again invested in time deposit/term deposit. The ld. AR of the assessee submits that the Assessing Officer was provided complete details at the time of filing objection and no new details were required to be furnished as all details were available before the Assessing Officer. The Assessing Officer wrongly concluded that the assessee has not furnished complete details.
14. On merit, the ld. AR of the assessee submits that once the issue was examined in depth in A.Y. 2009-10 and was accepted the same issue, neither can be agitated nor it should be brought to tax when it was accepted in A.Y. 2009-10. There were no new funds deposited with the bank, rather it was the same amount re-deposited in time / term deposits. The ld. AR of the assessee submits that before the ld. CIT(A), they have filed various submissions including the submission dated 05/11/2018, bank statement, computation of income alongwith reasons of reopening. However, the ld. CIT(A) has not considered those submissions and confirmed the order by taking a view that no additional submission or evidence is filed before him. The ld. AR of the assesse also furnished copy of screen shot of ITBA portal.
To support her various submissions on legal issue as well as on merits, the ld. AR of the assessee relied on the following case laws:
Bhaktikishoredas Dharmtanyadasji Swami Vs ITO (i) Mumtaz Haji Mohmad Memon Vs ITO SCA No. 21030 of 2017 (Guj) (ii) Amar Jewellers Ltd. Vs DCIT (2018) 91 taxmann.com 4 (Guj) (iii) Bir Bahadur Singh Sijwali Vs ITO, Haldwani (2015) 68 SOT 197 (Delhi Trib) (iv) Shri Rinamkumar A Shah Vs ITO ITA No. 172/Ahd/2017. (v) Ashish Natvarlal Vashi Vs ITO (Srt Trib) dated 19/04/2021. (vi) Hasmukh B Patel Vs ITO ITA No. 193/Srt/2019 dated 24/07/2019. (vii) Jayesh G. Balar Vs ITO 71 taxmann.com 221 (Guj) 16. On the other hand, the ld. Sr. DR for the revenue supported the orders of lower authorities. The ld. Sr. DR for the revenue submits that case of assessee was reopened on the basis of information of term deposit which is different than the information in earlier years. The assessee has not given all the details or information despite giving ample opportunity and the assessment was completed under Section 144 of the Act. Even before the ld. CIT(A), the assessee has not filed any other or additional information or submission to substantiate their grounds of appeal. The ld. Sr. DR for the revenue prayed for confirming the orders of lower authorities. In the alternative submission, the ld. Sr. DR for the revenue submits that in case, the Bench is of the view of that the assessee required any relief, the matter may be restored to the file of Assessing Officer for adjudicating this issue afresh with the direction to assessee to provide complete details to the Assessing Officer.
Bhaktikishoredas Dharmtanyadasji Swami Vs ITO 17. I have considered the submissions of both the parties and gone through the orders of the lower authorities carefully. I have seen the assessment order dated 27/10/2016 passed under Section 143(3) r.w.s. 147 of the Act for A.Y. 2009-10. On careful perusal of contents of assessment, I find that the case of assessee for A.Y. 2009-10 was also reopened on the basis of information that there was cash deposit in bank account. The assessee furnished return of income in response to notice under Section 148 of the Act and that ultimately no addition on account of cash deposit in bank account was made. Before me, the ld. AR of the assessee explained that there is no new deposit in the bank and that deposits in the bank belongs to Shree Swaminarayan Seva Trust which is source from the proceeds of old FDs. On perusal of record of various bank statements, I find merit in the submission of assessee that the reopening for the assessment year under consideration is the same which was the basis for A.Y. 2009-10 wherein the department has already accepted and no addition was made on the basis of similar reasons of reopening. The only difference in facts are that for this year, the assessing officer made reopening by recording that the assessee made time deposits in bank account. Therefore, I am of the view that reopening under Section 147 of the Act on the basis of similar reasons, which was the basis of earlier assessment year (2009-10), is not justified, particularly when the assessing officer was satisfied and nor addition was made. Thus, the 10 Bhaktikishoredas Dharmtanyadasji Swami Vs ITO reopening under section 147 is invalid and the assessment order passed by the Assessing Officer is held void ab initio.
As discussed above, as no addition was made in A.Y. 2009-10 on same deposit which is the source of deposit/term deposit in the year under consideration, thus the assessee also succeeded on merit. In the result, grounds of appeal
raised by the assessee are allowed.
19. In the result, this appeal of assessee is allowed. Order announced in open court on 30th August, 2023.