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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar
Assessment Year 2013-14 Bhagvanjibhai The ITO, Somabhai Patel Vs Ward-1(3)(1), Patel Faliya, Vasai, Vadodara Dabhoi, Vadodara PAN: BRNPP3635H (Respondent) (Appellant) Assessee Represented: Shri Hardik Vora, A.R. Revenue Represented: Smt. Trupti Patel, Sr.D.R. Date of hearing : 04-03-2024 Date of pronouncement : 08-03-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
This appeal is filed by the assessee as against the exparte appellate order dated 03-08-2023 passed by Commissioner of Income Tax [Appeals], National Faceless Appeal Centre [NFAC], Delhi arising out of the reassessment order passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 [herein after referred as the Act] relating to the assessment year 2013–14.
The brief facts of the case is that the assessee is an individual and engaged in the agricultural activities and deriving agricultural Page No 2 Bhagvanjibhai Somabhai Patel vs. ITO income, hence not filed regular Returns of Income. For the Assessment Year 2013-14, the assessment was reopened for the reason that the assessee has made huge cash deposits in his Bank Accounts. Therefore a notice u/s. 148 dated 31.03.2021 was issued to the assessee. In response, the assessee filed his Return of Income on 13.04.2021 declaring Nil income and agricultural income of Rs.12,24,600/-. The assessee was issued with notice u/s. 143(2) on 09.07.2021 and during Faceless Assessment proceedings issued further notices under 142(1) of the Act, asking the assessee to furnish certified English Translation of agricultural land sold, proof of agricultural income certificate and details of agricultural land holdings.
The assessee replied that the cash deposits is from agricultural income of past years as well as sale of 50% of his agricultural land vide Sale Deed dated 10.09.2012 for a consideration of Rs.5,50,000/- (received through Cheque No. 149797). The assessee further submitted he made cash deposits Rs.15,55,000/- in Bank of Baroda with Account No. 2030100014234 and Dena Bank Account No. 038110029050 a sum of Rs.21,00,000/-. However the Assessing Officer while framing the assessment treated the cash deposit in Dena Bank is Rs. 21,00,000/- and Bank of Baroda as Rs. 1,55,50,000/- and arrived the total figure of Rs.1,76,50,000/- as the cash deposits made in the Banks Account. The Assessing Officer also quoted another Bank Account No. 92420100003729 with Bank of Baroda. Thus the Assessing Officer treated the entire cash deposit as unexplained money u/s. 69A of the Act and demanded tax thereon. The Assessing Officer also charged interest Page No 3 Bhagvanjibhai Somabhai Patel vs. ITO u/s. 234A, 234B and 234C of the Act and also initiated Penalty proceedings u/s. 271(1)(c) for concealment of income, u/s. 271(1)(b) for non-compliance to statutory notices and u/s. 271F penalty for not filing of Income Tax Return.
4. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A), NFAC. The Ld. CIT(A) given three hearing opportunities on 01.09.2022, 07.03.2023 and 13.07.2023, as the assessee has not responded to the above notices, dismissed the appeal without adjudicating the grounds of appeal raised by the assessee.
Aggrieved against the same, the assessee is in appeal before us raising the following Ground of Appeal:
1. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming addition of Rs.1,76,50,000/- on account of cash deposit in bank account.
2. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming addition of Rs.1,55,50,000/-on account of cash deposit in bank account without considering that the actual cash deposited during the year was only Rs. 15,50,000/-.
3. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in confirming addition on account of cash deposit in bank account without considering that the same was out of the previously earned agricultural income and sale of agricultural land.
4. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing order without providing enough opportunities.
5. On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing order without considering that assessee is a non-techno savvy person and was unaware about the hearing notices.
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On the facts and circumstances of the case as well as law on the subject, the learned CIT (Appeals) has erred in passing order without discussing the grounds on merits.
7. It is therefore prayed that the above addition/disallowance made by the assessing officer may please be deleted. 6. Ld. Counsel Shri Hardik Vora appearing for the assessee in support the grounds submitted that the addition made by the Assessing Officer are baseless, more particularly cash deposit of Rs.15,50,000/- made by the assessee in his Bank of Baroda Account whereas ld. A.O. treated the same as Rs.1,55,50,000/-. Thus pleaded the addition is liable to be deleted.
Regarding the other cash deposits in Dena Bank Account, the Ld. Counsel submitted copy of the Sale Deed dated 10.09.2021 with Sub Registrar, Dabhoi wherein the assessee received his 50% share of income namely Rs.5,50,000/- as well as past two years of agricultural income. The Ld. Counsel also submitted Gram Panchayat Certificate stating the Annual Agricultural Income approximately during the year 2011-12 as Rs.13,00,000/- and during the year 2012-13 is Rs. 12,00,000/- respectively.
After hearing the assessee counsel, the Ld. Sr. D.R. Shri Santosh Kumar asked to get the information from the Assessing Officer about the addition of Rs.1,55,50,000/- as well as third Bank Account No. 9242010003729 with Bank of Baroda as mentioned in the assessment order. In response, the Ld. D.R. filed before us copy letter dated 01.03.2024 filed by the Jurisdictional Assessing Officer (JAO) which reads as follows:
Page No 5 Bhagvanjibhai Somabhai Patel vs. ITO
“v) All the details on system with regard to 3 bank account No 92420100003729 as mentioned in assessment order has been verified, however no record could be found specifically showing this bank account. From the case history notings on system, it is seen that the FAO has issued notice u/s 133(6) twice to the BOB and Dena Bank calling the details of accounts of the assessee held in these banks and their statement. However from the case history notings it appears that no reply has been received from these banks. Therefore, the undersigned is not able to comment on this issue as to how the FAO has quoted that third account in the assessment order. Hence, if directed by the Hon'ble ITAT, the NeFAC may be requested to unmask the FAO so that his comments about quoting the third account may be called for. Alternatively, the JAO may be directed to make afresh inquiry u/s 133(6) from BOB, to get the bank details and their statement so as to verify about the third account and deposits thereon. vi) On verification of the information on system it is noted that the cash deposit reflecting in the case of assessee in account in BOB was Rs. 1,55,50,000/-, For ready reference the screenshot of AIR information available on system is reproduced hereunder.
However from the copy of passbook, it is seen that the actual cash deposit is Rs. 15,50,000 in the account in BOB. Thus it appears that the BOB has made a mistake in uploading the data of cash deposit in AIR wherein one extra five (5) has been put, thereby making the figure of cash deposit from 15,50,000/- to 1,55,50,000/-. It appears that the FAO has made the addition relying on the AIR information.
Factual report in the matter as above is submitted herewith for your kind reference and producing before Hon'ble ITAT. In this regard, it is submitted that there is nothing extra on record which could be submitted by the undersigned before the Hon'ble ITAT through physical presence, as the assessment has not been made by the undersigned. In this matter, the FAO (Faceless Assessing Officer) who made the assessment, may give Page No 6 Bhagvanjibhai Somabhai Patel vs. ITO better reply about the quantum of cash deposit taken by him and third account mentioned in assessment order. Hence, if desired by the Hon'ble ITAT, the FAO may be called for.”
We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee and reply letter dated 01.03.2024 filed by the JAO. It is clear from the above letter filed by the JAO, there is no Bank Account No. 9242010003729 in the name of the assessee. However based on the information available with the department in its system, wherein the cash deposit is wrongly mentioned as Rs.1,55,50,000/- is treated as the unexplained cash deposited by the assessee and demanded tax thereon. It is further seen the Faceless Assessing Officer failed to verify the reply filed by the assessee, enclosing his bank details. Thus in our considered view, the addition of Rs.1,55,50,000/- made as unexplained cash deposit in the hands of the assessee is liable to be deleted. The Ld. Counsel admitted before us that average agricultural income of the assessee for the previous year as Rs.12,00,000/- per annum which was deposited during this period and assessee’s share of income on sale of agricultural land. In our considered opinion, the assessee has properly explained the cash deposits made by the assessee in his bank accounts and also proved the extent of agricultural land held by the assessee by producing 25/7 records and other materials before the Lower Authorities. Therefore the additions made by the Assessing Officer are baseless and without application of mind and the same are liable to be deleted.
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In the result, the appeal filed by the Assessee is allowed.