PALWINDER KAUR,VPO SIWAN, TEH. GUHLA vs. INCOME TAX OFFICER, KAITHAL

That the order of Id. CIT (A) is illegal, erroneous and perverse and thus needs to be quashed.

During the course of hearing, the Ld. AR submitted that the assessee Palwinder Kaur, is a housewife and married to Sh. Kulwant Singh of Kanthali. She is only joint bank account holder with her husband namely, Kulwant Singh. The account joint saving account number is 911010049479566 in Axis Bank. Assessee family sold an agricultural land for Rs. 64,75,000/- in Village Sodhiwal, Punjab, and sales proceeds of that agriculture land was deposited in the joint saving account held with Axis Bank. Proof of land sold documents are attached which is placed on record. It was further submitted that the assessee is cancer patient, unable to move and medical report is also enclosed. It was submitted that the Ld. A.O. and CIT (Appeals) has not served upon any notice to the assessee. It was further submitted that the assessee husband duly discharged and given the complete proofs of this deposit of Rs. 38,00,000/-. His assessment order is available on income tax portal and records, and in favour of assessee in all assessment proceeding and assessment order is attached. It was submitted that the asseesee family is purely and exclusively agriculturists and has no others sources of income except agriculture. It was submitted that there is no provision in income tax and in any other law to levy tax on one entry of Rs. 38,00,000/-, which is already assessed and explained with all proofs in case of husband with nil demand. It was submitted that the Ld A.O. and Ld CIT (Appeals) have not applied judicial mind to levy and confirmed on same entry in the hand of joint saving bank account holder. It was submitted that huge demand of Rs. 28,71, 220/- including interest under section 234A & 234B of Income Tax Act, 1961 has been raised. Hence, this demand is totally illegal, un-logical and unreasonable in the laws and on the records.

Further, during the course of hearing, our reference was drawn to the order passed by the AO in case of husband of the assessee Shri Kulwant Singh under section 143(3) r.w.s 147 dt. 27/12/2019 and the contents thereof read as under:

Thereafter, notices u/s 142(1) were issued to the assessee from time to time calling therein the requisite information alongwith documentary evidence. In response to statutory notices Sh. O.P. Arora, Advocate, the authorised representative of the assessee attended the proceedings from time to time and filed reply along with supporting documents which were examined and placed on file after examination, /detail/documents filed and pleadings made by the counsel of assessee during the course of assessment proceedings are considered and no adverse inference is drawn on account of cash deposits made in the above said bank account. As such, the returned income of the assessee is accepted.”

The ld DR is heard who has relied on the order of the lower authorities. Regarding the plea of the ld Counsel for the assessee that the matter relating to cash deposit in the joint bank with the husband of the assessee has already been examined by the AO, it was submitted by the ld DR that the matter may be remitted to the file of the AO for necessary verification.

We have heard the rival contentions and purused the material available on record. Admittedly and undisputedly, both the case of the assessee and her husband were reopened basis information regarding cash deposit of Rs 38 lacs in the joint bank account maintained by both of them with Axis Bank. The case of the husband of the assessee was reopened by ITO Ward 1, Kaithal and vide order passed u/s 143(3) r/w 147 dated 27/12/2019, the explanation so furnished by the husband of the assessee explaining the source of cash deposit has been accepted and no adverse inference has been drawn. The case of the assessee was reopened by ITO Ward 2, Kaithal and vide order passed u/s 144 r/w 147 dated 05/12/2019, in absence of any explanation forthcoming from the assessee, whole of cash deposit in the joint bank account has been brought to tax in the hands of the assessee as unexplained deposits u/s 69 of the Act. In the aforesaid factual background of the matter, we find that where the necessary explanation regarding source of cash deposit in the joint bank account has been furnished by the husband of the assessee in his assessment proceedings and the same has been accepted by the Revenue and no adverse finding has been recorded thereby accepting the said explanation, no further cause of action lies in bringing the same amount to tax in the hands of the assessee as the deposits stand duly explained and the contentions so advanced by the ld AR are therefore found acceptable and is hereby accepted. 7. In the result, we set-aside the matter to the file of the AO for the limited purpose of verifying the passing of the order u/s 143(3) r/w 147 dated 27/12/2019 in case of husband of the assessee, Shri Kulwant Singh by ITO Ward 1, Kaithal and where the same is found to be in order, we hereby direct the AO to delete the impugned addition of Rs 38 lacs so made and allow the necessary relief to the assessee.

In the result, the appeal of the assessee is partly allowed for statistical purposes.