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Order PER PARESH M. JOSHI, J.M. : This is an appeal filed by the Assessee under section 253 of the Income Tax Act, 1961 as and by way of second appeal. The relevant assessment year is 2017-18. The assessee is aggrieved by the order bearing No. ITBA/NFAC/S/250/2023-24/1056766677(1) dt. 04/10/2023 of Ld. CIT(A) which is hereinafter referred to as the “impugned order”. Factual Matrix 2. During the relevant assessment year, the assessee has e-filed its return of income on 05.08.2017 declaring total income of Rs.2,18,980/- vide acknowledgement No.150870440050817. Thereafter, the case was selected for complete scrutiny under CASS on the main reason "cash deposits during demonetization period and gross total income including exempt income and agricultural income". Notice under section 143(2) of the Income Tax Act, 1961 dated 09.08.2018 was issued and served upon the assessee through E-filing Portal.
Notice u/s 142(1) of the Income Tax Act, 1961 was issued 04.04.2019 was issued alongwith questionnaire specifically for cash deposit during the demonetization period i.e. 09.11.2016 to 30.12.2016. The assessee filed his reply point wise alongwith documentary evidence from time to time on e-filling portal. From his reply it has been observed that the assessee has income from capital gain, bank interest and dividend income from company.
The assessee was asked to explain cash deposited during demonetization period of Rs. 30,00,000 on 22.12.2016 in the account of 50100072903398 maintained with HDFC Bank. In his reply the assessee stated that, "cash deposited during the demonetization period by the assessee is against income of Rs. 50.00 Lacs disclosed under IDS 2016. Copy of IDS form 1 (in evidence of income disclosed) and evidence of deposit tax Rs.22.50 Lacs@45% of income disclosed under Income Declaration Scheme, 2016". Copy of Income Declaration Scheme, 2016 form 1 (in evidence of income disclosed) and evidence of deposit of tax Rs. 22.50 lacs @45% of income disclosed) as challan are furnished by the assessee but not furnished Form 4 (Form 4 of the IDS is the certificate granted by the jurisdictional Principal commissioner or Commissioner of Income Tax for the proof of payment of tax, surcharge and penalty made). "He also stated that he has no any bank deposits/FDR's which also depicted from the bank account statement, no sale/purchase of immovable/moveable property." 4.1 For the verification of the same and Form -4 of IDS., 2016, a letter was written to the Income Tax Officer (Hq.)(Tech.)', O/o the Pr. Commissioner of Income Tax-1, Ludhiana on 23.11.2019 through ITBA portal to clarify "whether the above said assessee was deposited cash of Rs. 50.00 Lacs during the demonetization period and disclosed the same under IDS. 2016 scheme or not alongwith documentary evidence produced during the disclosed under IDS 2016 for further necessary action." In his reply the ITO(Hq.)(Tech.), O/o the Pr. Commissioner of Income Tax-1, Ludhiana replied that, "I have been directed to convey that the above said assessee has declared Rs. 50,00,000/- under IDS. 2016 for the A.Y. 2011-12, 2012-13, 2013-14, 2014-15& 2015-16 on 29.09.2016 in the Form No. 1 on 29.09.2016. Form 4 has not been issued to the declarant due to part/short payment made with the stipulated time."
That further, notice u/s 142(1) of the Income Tax Act, 1961 was issued on 16.12.2019 for requirement of Form-4 of the I.D.S. Scheme, 2016 for 18.12.2019. But on the fixed date of hearing neither anybody attended nor has any written reply been received for adjournment. Therefore, I have left with no alternative but to complete the proceedings on merits on the basis of the material available on records as this case is barred on time on 31.12.2019. Therefore, the cash deposit of Rs.30,00,000/-during the demonetization(i.e. 22.12.2016) is treated as unexplained cash deposit in the bank of the assessee u/s 69A of the Income Tax Act, 1961 and added to the income of the assessee. Further, tax will be charged on this income as per provision of section 115BBE of the Income Tax Act, 1961. Thus, being satisfy that the assessee has deposited unexplained cash as unexplained u/s S9A of the Act, to the tune of Rs.30,00,000/-, therefore, penalty proceedings u/s 271AAC(1) of the Income Tax Act,1961 are being initiated separately. (Addition of Rs.30,00,000/-)
In view of the above, the total income of the assessee is computed/ assessed as under:-
Returned income Rs. 2,18,980/- Add: Addition unexplained cash deposits u/s 69. . read with Rs.30,00,000/- Section 115BBE of the Income Tax Act, 1961 as discussed above in para 8 2 Assessed Income Rs.32,18,980/-
The case is assessed at income of Rs.32,18,980/- out of which income of Rs. 30,00,000/- is chargeable to tax u/s 115BBE of the Act for the year under consideration and charge interest as per the applicable provisions of Income Tax Act. Issue requisite documents to the assessee alongwith penalty notice u/s 274 read with section 271AAC(1) of the I.T.Act,1961.
The above assessment order of Ld. AO bears no. ITBA/AST/S/143(3)/2019- 20/1023338768(1) and is dt. 28/12/2019. 9. The assessee being aggrieved by the aforesaid order of Ld. AO dt. 28/12/2019 preferred first appeal before Ld. CIT(A) who by impugned order has sustained the order of Ld. AO (supra).
The assessee being further aggrieved by the “impugned order” passed in first appeal has preferred second appeal before us and interalia has raised following grounds of appeal in Form No. 36 which is reproduced below:
The learned CIT( Appeal) is not justified in not deleting addition of Rs.30.00 Lacs to the returned income of the assessee made by the AO as this amount is part of total amount of Rs.50.00 Lacs declared under IDS 2016 Scheme by the assessee and all lax dues under IDS 2016 have been paid by the assessee and even form 3 have been duly filed Online by the assessee, however Form 4 which was to be issued by Ihe department was not issued by the department. The assessing officer though confirmed bank deposits of Rs.50.00 Lacs in bank by the assessee under IDS and also tax payments of Rs.22.50 Lacs within the due dales of deposits as per IDS 2016 has wrongly made addition orRs.30.00 Lacs though cash deposit of Rs.30.00 Lacs in bank on 22.12.2016 formed part of total income declared under IDS 2016 i.e; Rs.50.00 Lacs. However now even Form 4 has been issued by Pr. CIT, Ludhiana on 19.05.2022 (copy enclosed) which clearly depicts income declared under IDS Rs.50.00 Lacs by assessee and taxes paid within due date Rs.22.50 Lacs. As assessee has deposited Rs.50.00 Lacs disclosed under IDS in his bank account(s) and paid all tax dues under the scheme for which form 4 has also been issued by the department, addition of Rs.30.00 Lacs made by the AO. is illegal and biased and should be deleted. Keeping in view the above submission and also the fact that Form 4 issued by Pr. CIT, Ludhiana dated 19.05.2022 ( copy enclosed) has also remained unnoticed by the CIT(Appeal) while deciding the appeal filed by the assessee, it is prayed that addition of Rs.30.00 Lacs made by the AO and subsequently upheld by the CIT(Appeal) should be deleted and full relief should be allowed to assessee,
11. The hearing in the matter took place on 09/09/2024 when both the parties appeared before us. Both the parties were treated equally and equal opportunities were afforded to them. Each parties contentions were heard at length. The Ld. AR has placed on record paper book containing 1 to 9 pages. It was contended by him that under the income declaration scheme 2016 a scheme for undisclosed income of any financial year upto 2015-16 came where under, tax was charged at the rate of 30% on declared income as increased by surcharge at the rate of 25% of tax payable (to be called the Krishi Kalyan Cess) and so also penalty @ 25% on undisclosed income declared. The relevant notification and income declaration scheme 2016 is at page 5-9 of paper book. The assessee had declared sum of Rs. 30,00,000/- under the scheme and had paid all taxes as applicable. Copy of Form 4 as envisaged under income declaration scheme 2016 issued by PCIT-1, Ludhiana is enclosed at page 1 of Paper Book. It was urged by him that this Form 4 was not on record in a sense that it could not be generated from portal due to certain reasons beyond the control of one and all.
However now it is placed on record which fact can be verified by Ld. AO if this Tribunal remands the case back to the file of Ld. AO for limited purpose of verification of said Form 4. It was also contended that at the material time and place (Portal) it was just not appearing and therefore there was just cause for not producing before the lower authority for a suitable and just explanation that income of Rs. 30,00,000/- was disclosed under IDS 2016 & applicable taxes on it were paid hence by no stretch of imagination it can be said to be non disclosed income. It was further contended by Ld. AR that assessee has given plausible and just explanation for cash deposit of Rs. 30,00,000/- during the period of demonetization and therefore impugned order should be set aside and matter be relegated / remitted back to the file of Ld. AO for limited purpose to cross check that taxes have been paid and Form 4 as enclosed is proof enough. Per contra the Ld. DR conquered with the view expressed by Ld. AR. Findings and Conclusions
We have examined the records of both the lower authorities i.e; Ld. AO and Ld. CIT(A) and we are of the considered view that on income of Rs. 30,00,000/- as disclosed under IDS 2016 the necessary taxes as applicable have been paid by the assessee and form 4 is proof enough. However since this document was absent both before Ld. AO and Ld. CIT(A) we deem it fit that its contents be verified and if upon due verification of all facts including payment of taxes thereon are found correct then a closure should be given to this dispute between he assessee and Income Tax Department so that a quiteous prevail.
12.1 We therefore set aside the “impugned order” and remit the matter back to the file of Ld. AO for verification of Form 4(supra) which should be done as expeditiously as possible preferably within a period of 45 days from date of receipt of the copy of this order of Tribunal so that issue is closed once and for all. Order
In the result appeal of the assessee is allowed in terms as aforesaid. As a matter of abundant caution we make it clear that save and except verification (supra) of Form 4 no other exercise detrimental to the interest of assessee would be carried out in so far as this matter is concerned.
Appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 13/09/2024 िव"म िसंह यादव परेश म. जोशी ( VIKRAM SINGH YADAV) (PARESH M. JOSHI) लेखा सद"/ ACCOUNTANT MEMBER "ाियक सद" / JUDICIAL MEMBER AG