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Assessee represented by Shri A Gopalkrishnan Aiyer, CA Department represented by Shri Vinod Kumar, Sr. DR Date of hearing 30/01/2023 Date of pronouncement 06/03/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the separate orders of National Faceless Appeal Centre, Delhi (NFAC)/Commissioner of Income Tax (Appeals), (in short, the ld. CIT(A)) even dated 22/03/2022. In the assessee has challenged the additions in the quantum assessment and in Section 271(1)(c) of the Income Tax Act, 1961 (in short, the Act) for the Assessment year (AY) 2010-11. Both the appeals are interconnected, thus, both the appeals were clubbed heard together and are decided by consolidated order. In ITA No.131 & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod quantum assessment appeal the assessee has raised following grounds of appeal: (1) On appreciation of facts and circumstances of the case and law, the ld CIT(A)/NFAC has erred in confirming the addition of Rs. 10,00,000/- made by the assessing officer out of the deposits made by the assessing officer out of the deposits made in the bank account of the appellant, treating the same as unexplained money u/s 69A of the Act. The action of NFAC/CIT(A) is not in accordance with the facts of the case and deserve to be deleted.
2. The assessee vide application dated 25.01.2023, the assessee has raised following additional ground of appeals: (2) On appreciation of facts and circumstances of the case and law, the ld CIT(A)/NFAC has erred in not adjudicating the additional grounds of appeal No.1 raised by the appellant as regards the validity of notice under section 148 of the Act issued by learned assessing officer. (3) On appreciation of facts and circumstances of the case and law, the ld CIT(A)/NFAC has erred in not adjudicating the additional grounds of appeal No.1 raised by the appellant against framing of the assessment order u/s 144 of the Act instead of u/s 143(3) of the Act by assessing officer.
3. In second appeal in the assessee has raised following grounds of appeal: “1. On appreciation of facts and circumstances of the case and law, the learned CIT(A) NFAC has erred in confirming the penalty U/s 271(1)(c) to the tune of Rs. 3,01,600/- levied by the ld. Assessing Officer. The appellant has neither concealed any income nor submitted any inaccurate particulars of income.
2. On appreciation of facts and circumstances of the case and law, the learned CIT(A) NFAC has erred in imposing penalty U/s 271(1)(c) of the Act, without a specific finding of fact as to whether the appellant has concealed any income or furnished any inaccurate particulars of income is contrary to law and hence deserves to be deleted. “3. The appellant craves leave to add, amend, modify or alter the above grounds of appeal at any stage of appellate proceedings.”
4. The assessee vide application dated 19.12.202 also raised following additional grounds of appeal, & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod “1. Alternatively, and without prejudice on appreciation of facts and circumstances of the case and law, the learned CIT(A) ought to have directed the ld. assessing officer to calculate the tax liability of the appellant correctly as per law.”
5. Brief facts of the case are that case of assessee was reopened under section 147 by assessing officer by taking prior approval of the higher authorities. Notice under section 148 was issued to the assessee on 30.03.2017. The assessing officer noted that despite issuing various notices, the assessee neither filed return of income nor responded to various notices. The assessing officer in para-3 of the assessment order recorded non-compliances of various notices, and proceeded to complete the assessment on the basis of the material on record. The assessing officer recorded that during assessment he find that the assessee made cash deposited Rs.10,00,000/- in her saving bank account with Indusind Bank. The assessee was asked to explained about such cash deposits but the assesse failed to explained source of such cash. Thus, the assessing officer while passing the assessment order under Section 144 r.w.s. 147 of the Act made addition of Rs. 10.00 lacs on account of unexplained investment under Section 69A by taking a view that the assessee has deposited cash of Rs. 10.00 lacs in her savings bank account with Indusind Bank, Silvassa and that on issuance of show cause, the assessee neither attended nor filed any explanation, therefore, cash deposit was treated as unexplained & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod investment under Section 69A of the Act. The assessing officer also initiated penalty for concealment of income under section 271(1)(c).
6. On appeal before ld CIT(A)/NFAC the assessee the assessee stated that she is engaged in the agricultural activities on taking land on lease. Bank deposits represents the agricultural income. The assessee also claimed to have earned agriculture income in past years and furnished copy of return of income, computation of income, income and expenditure account and balance sheet and bank statement. On the submission of assessee, the remand report was called for from the Assessing Officer. The assessing officer objected about accepting the evidences filed before NFAC by raising objection that the assessee has not given satisfactory reason why such evidences were not produced before him. In the remand report, the Assessing Officer contended that the lease of land with Md. Amin Kadir Chikliwala was on plain paper and not the registered one. Md. Amin Kadir Chikliwala not responded to the notice issued under Section 133(6) of the Act, thus the source of deposit could not be verified. The assessee was also asked to file various details of various bills and vouchers for verification, but no such details were filed. On the basis of report of Assessing Officer, the ld. CIT(A) confirmed the penalty. Further aggrieved, the assessee has filed the present appeal before this Tribunal by raising various grounds of appeal, which I have recorded above. & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod
7. I have heard the submissions of the learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the Revenue and have gone through the orders of the lower authorities carefully. The ld. AR of the assessee submits that the Assessing Officer made addition of Rs. 10.00 lacs on account of deposit in Indusind bank. In the return of income, the assessee has disclosed net agricultural income of Rs. 6.60 lacs which consists of income from sale of milk, grass and paddy of Rs. 2,51,063/-. The assessee was having opening cash balance of Rs. 1,75,288/-. The ld AR for the assessee at the time of making his submissions referred his submission filed before NFAC and would submit that he has filed the details of agriculture income earned by assessee from 1999-2000 till 2017-18. The Assessing Officer and the ld. CIT(A) held that the assessee could not substantiate the cash deposit of Rs. 10.00 lacs. Such deposit was made out of source of income including agricultural income which were forming part of accounts disclosed by assessee in her return of income. Such agricultural income disclosed by assessee was not accepted as source of cash deposit even though the Assessing Officer included such income while calculating tax liability for income tax rate purpose. The transaction of cash deposit was disclosed in the balance sheet and account available on record which is not disputed by the Assessing Officer even in the remand proceedings. The addition is made & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod by the Assessing Officer that the assessee could not substantiate the cash deposit. The assessee explained the source of cash deposit with documentary evidence as well as the manner in which recorded in the accounts, forming part of return of income.
8. The ld. AR further submits that he has also raised additional ground of appeal vide application dated 25.01.2013 in quantum appeal and dated 16/12/2022 in penalty appeal. The ld. AR of the assessee submits that no additional fact is to be brought on record. The facts related to adjudication of additional ground of appeal is emanating from the orders of the lower authorities. In support of additional ground of appeal, the ld AR for the assessee relied on the decision of Hon’ble Supreme Court in National Thermal Power Corporation Vs CIT (1998) 229 ITR 383 SC.
9. On the other hand, the ld. Sr. DR for the revenue objected against raising of additional ground of appeal. The ld. Sr. DR submits that in the additional ground of appeal in penalty appeal, the assessee is seeking calculation of tax liability which is not the subject matter of present appeal. Against other grounds of appeal, the ld. Sr. DR for the revenue submits that the assessee has not filed return of income in response to notice under Section 148 nor furnished any return of income despite giving sufficient and reasonable opportunity of the assessee. The Assessing Officer made addition under Section 69A by treating the & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod deposit as unexplained money. Since the assessee has not disclosed the source of deposit, thus the assessee has concealed the income. The Assessing Officer made addition under section 69A, while passing assessment order and also initiated penalty for concealment of income. The assessee failed to substantiate the source of cash deposits in bank account either during the assessment or in remand proceeding. So far as penalty under section 271(1)(c) is concerned, there is no question of change of opinion as argued by the ld. AR of the assessee, rather it is a clear case of concealment of income.
10. I have heard the submissions of both the parties and have gone through the orders of lower authorities carefully. I find that the case of assessee was reopened under Section 147 of the Act. Notice under Section 148 of the Act was issued on 30/03/2017. In response to notice under Section 148, neither the assessee filed return of income nor responded various notices issued by the Assessing Officer as clearly recorded in para 3 of the assessment order. The Assessing Officer made addition of Rs. 10.00 lacs under Section 69A.
11. As noted above, before the ld. CIT(A), the assessee submitted that she was engaged in agricultural activities and the bank deposit represented agricultural income. On the submission of assessee, the Assessing Officer was directed to furnish his remand report. In the remand report, the Assessing Officer reported that the lease of land with Md. Amin ITA No.131 & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod Kadir Chikliwala was on plain paper and not the registered one. Md. Amin Kadir Chikliwala not responded to the notice issued under Section 133(6) of the Act, thus the source of deposit could not be verified. On the basis of remand report, the ld. CIT(A) confirmed the addition in the quantum as well as penalty levied by the Assessing Officer.
Before me, the ld. AR of the assessee vehemently argued that the agricultural income and the agricultural activities of the assessee is not doubted by the Assessing Officer and that the assessee has not concealed any income rather deposit in the bank account are forming part of statement of account. Considering the facts that neither the assessee appeared nor filed any response to the show cause notice of assessing officer. During, appellate stage before NFAC, the submissions of assessee was remanded to the assessing officer. Again before assessing officer in the remand proceedings the assessee failed to appear and substantiate her contention. Therefore, al the grounds of the appeal raised by the assessee are restored to the file of assessing officer to examine the issue afresh and pass the order in accordance of law. In the result, the original grounds of appeal
raised by the assessee are allowed for statistical purpose.
13. So far as additional ground is concerned, the assessee is given liberty to hesitate all such submissions before assessing officer in quantum assessment. Considering the fact that the main issue raised in the & 132/Srt/2022 Nirmalaben Jaswantsinh Rathod appeal is restored to the file of assessing officer, therefore, the assessing officer is directed to examine the fact and work out the taxability as per law.
14. Needless to direct that before passing the order afresh the assessing officer shall grant opportunity to the assessee.
15. In the result, the appeal of the assessee in quantum assessment is allowed for statistical purpose. 271(1)(c).
16. Considering the facts that the grounds of appeal raised by the assessee are restored to the file of assessing officer, therefore, penalty order would not survive. Hence, grounds of appeal in ITA No. 132/Srt/2022 is allowed at this stage. However, the assessing officer would be at liberty to initiate and levy penalty after passing the order in quantum assessment, if so desired, in accordance with law.
17. In the result, ITA No. 132/Srt/2022 is allowed. Order pronounced in the open court on 6th March, 2023.