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आयकर अपीलीय अिधकरण,च"डीगढ़ "यायपीठ “बी” , च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE "ी आकाश दीप जैन, उपा"य" एवं "ी िव"म "सह यादव, लेखा सद"य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM आयकर अपील सं./ िनधा"रण वष" / Assessment Year : 2011-12 Shri Pardeep Kumar बनाम The Pr. CIT 285, Kurali, Tehsil Naraingarh Panchkula Ambala-134203 "थायी लेखा सं./PAN NO: BPUPK4517C अपीलाथ"/Appellant ""यथ"/Respondent िनधा"रती क" ओर से/Assessee by : Shri Sudhir Sehgal, Advocate and Shri Rishabh Marwah, C.A राज"व क" ओर से/ Revenue by : Smt. Kusum, CIT, DR सुनवाई क" तारीख/Date of Hearing : 18/01/2024 उदघोषणा क" तारीख/Date of Pronouncement : 04/03/2024 आदेश/Order PER VIKRAM SINGH YADAV, A.M. :
This is an appeal filed by the Assessee against the order of the Ld. Pr. CIT, Panchkula dt. 18/03/2021 passed under section 263 relevant to Assessment Year 2011-12.
2. At the outset it is noted that there is a delay in filing the present appeal by 253 days as pointed out by the Registry.
In this regard, the Ld. AR submitted that the assessee has shifted his residence and in view of the same, no order under section 263 was ever served or received by him. It was submitted that it is only on receipt of the notice under section 142(1) consequent to the order under section 263, the assessee got to know that the order under section 263 has been passed in his case. Thereafter the assessee applied for the copy of the said order and thereafter the appeal was filed. It was submitted that the assessee got the copy of the order only on 28/01/2022 and thereafter the appeal was filed on 07/02/2022. It was further submitted that even otherwise, the delay is covered by the decision of Hon’ble Supreme Court wherein the limitation period has been extended from time to time on account of COVID-19 Pandemic. It was accordingly submitted that the delay so happened in filing the present appeal may be condoned and the appeal be admitted for adjudication.
The Ld. DR is heard who has not raised any specific objection in view of the COVID-19 Pandemic.
After hearing both the parties and considering the material available on the record, we find that there was reasonable cause for delay in filing the present appeal which is hereby condoned and the appeal of the assessee is admitted for adjudication.
In the present appeal, Assessee has raised the following grounds of appeal:
1. That the Ld. PCIT has erred in cancelling the earlier assessment as passed by the Assessing Officer, Ward-3, Ambala vide order, dated 15.12.2018 and holding the same as erroneous and prejudicial to the interest of revenue.
That the PCIT has failed to appreciate the fact that the assessment was completed by the Ld. Assessing Officer, Ward-3, Ambala after due application of mind and after considering all the relevant material. Thus, the setting aside the assessment as framed by the AO is bad in law. 3. Notwithstanding the above said ground of appeal
, it is submitted that the notice u/s 263 having been issued on the basis of audit objection and, therefore, the proceedings having been initiated on the basis audit objection, the same is bad in law as per the Judgment of Hon’ble Punjab & Haryana High Court in the case of Sohana Woollen Mill reported in 296 ITR 238 and which have been followed by the Hon’ble Chandigarh Bench of the ITAT in the case of Sh.Surinder Pal Singh, reported in 94 ITR (Trib) 458 and other cases.
4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
7. Briefly the facts of the case are that the case of the assessee was reopened on account of the reasons that there was certain cash deposits in the bank account maintained with SBI amounting to Rs. 18,00,000/- during the F.Y. 2010-11 relevant to impugned assessment year. The reasons were recorded and thereafter, notices were issued under section 143(2) and 142(1) and after considering the submissions of the assessee, no adverse findings was recorded by the AO and the return of income was accepted vide order passed under section 147 r.w.s 147(3) dt. 15/12/2018 8. Subsequently, the Ld. Pr. CIT issued a show cause under section 263 of the Act dt. 04/03/2021 stating that the AO had completed the assessment in undue haste and without carrying out necessary inquiries which he ought to have carried out and in particular, it was stated that from the perusal of the reply/ information / documents furnished by the assessee, it is seen that the amount of Rs. 18,00,000/- was deposited by the assessee in his bank account out of the sale consideration of plot on 02/08/2010 as per re-allotment letter by HUDA dt. 02/08/2010 which was purchased by the assessee on 15/03/2010. It was stated that the said plot was purchased and sold within short span of 5 months and therefore attract Short Term Capital Gain (STCG) of Rs. 7,60,000/- (18,00,000- 10,40,000) which has escaped assessment and since no inquiries have been made in this regard, the escaped income of Rs. 7,60,000/- needs to be assessed under the head ‘STCG’ and accordingly the assessee was issued a show cause as to why the assessment order so passed under section 147 r.w.s 143(3) should not be cancelled and set aside. In response to show cause, there was no response or any explanation furnished by the assessee and thereafter the Ld. Pr. CIT passed the impugned order stating that the AO has passed the assessment order in undue haste and in a very casual manner without due diligence and without conducting any worthwhile enquiries and therefore the same was set aside with the direction to pass a fresh order in accordance with law keeping in view the observations made in the impugned order and after providing reasonable opportunity of being heard to the assessee. 9. Against the said findings and directions of the Ld. Pr. CIT, the assessee is in appeal before us. 10. During the course of hearing, the Ld. AR submitted that the case of the assessee was opened and the reasons recorded u/s 148 of the Act for the reason that "Cash Deposited in the bank account amounting to Rs. 18,00,000/-". Thereafter, the assessee filed his return of income for the impugned Assessment Year i.e. 2011-12 on 06.07.2018, wherein, the income of the assessee was declared at Rs. 9,108/-. The assessee himself appeared during the course of assessment proceedings and submitted his reply dated 13.12.2018 before the Ld. Assessing Officer. The assessee in his reply has mentioned that the cash deposited in his bank account no. xxxxxx by his father namely Sh. Narinder Kumar was out of the sale proceeds of an old residential plot and other assets in the form of tractor, agriculture equipments and other assets. It was also submitted that the bank account in which the cash was deposited was under joint ownership wherein, the First holder was father of the assessee i.e. Sh. Narinder Kumar and the assessee was the second holder. The copy of the bank statements of bank account no. xxxxxx and bank account no. xxxxxx both with State Bank of India are placed on record. It was only after the death of Sh. Narinder Kumar (Father) on 02.03.2015 that the assessee became the first owner along with his wife. The copy of the death certificate of the assessee's father Sh. Narinder Singh is placed at paper book. In the same letter, it was also duly mentioned that the deal of the sale of plot was solely handled by assessee's father and thereby was sold by him for Rs. 10,40,000/- and along with such plot, various other assets i.e. Tractor, Popular Trees and other agricultural equipments were sold. The assessee along with his letter submitted various annexures being the evidences with regard to sale of each and every asset as mentioned above. The evidence with regard to the sale of tractor is placed in paper book at page no. 6, for sale of agricultural equipments at page no. 7 and for the sale of popular trees is placed in paper book at page no.
8. In addition to this, the assessee also submitted before the Ld. Assessing Officer, the evidence with regard to the purchase of the plot by the assessee. Thereafter, the assessment was framed u/s 143(3) r.w.s. 147 of the Act wherein, the Ld. AO made NIL additions and accepted the income as declared by the assessee in his return of income.
It was submitted that the issue for which the proceedings u/s 263 of the Act has been initiated is "Short Term Capital Gain of Rs. 7,60,000/-“. It is worthwhile to mention here that the Show Cause Notice issued dated 05.03.2021 u/s 263 of the Act wholly revolves only around the cash deposit of Rs. 18,00,000/- in the bank account of the assessee alleging the same to be wholly out of the sale proceeds of the residential plot and hence, arriving at alleged Short Term Capital Gain for Rs. 7,60,000/-. Hence, it is submitted that the issue on the basis of which the ld PCIT has initiated the proceedings u/s 263 of the Act has been duly considered by the Ld. Assessing Officer during the assessment proceedings u/s 147 r.w.s 143(3) of the Act only after due application of mind as such cash deposit of Rs. 18,00,000/- was the only reason recorded u/s 148 of the Act for reopening the case of the assessee u/s 147 of the Act. It is submitted that the cash deposit and the alleged short term capital gain are not different issue but part of the same transaction which have been duly explained before the Ld. Assessing Officer during the course of assessment proceedings along with relevant annexures. And the Ld. AO had duly and consciously applied his mind on the issue of cash deposit of Rs. 18,00,000/- while concluding the assessment u/s 148 of the Act. It is a well settled principle that when the AO during the assessment proceedings has applied his mind on certain issue which is totally evident from the assessment order and the detailed letters filed by the assessee along with relevant documents, then, there arises no question as to initiation of the revision proceedings u/s 263 of the Act especially when the same issue is forming the reason recorded u/s 148 of the Act for assessing the case of the assessee for income escapement assessment.
It was further submitted that all the cash deposits have been made on account of sale of various assets being tractor, agriculture equipments, popular trees and residential plot evidences for which have been placed in the paper book. The contention of ITO, Audit in the audit objection based on which the alleged notice u/s 263 of the Act is that the whole of the cash of Rs. 18,00,000/- has been deposited only out of the sale transaction of residential plot and the amount received for sale of other assets is deposited in the bank account of the assessee before 20.03.2010 is completely incorrect. In this regard, it is submitted that in the bank statement of the assessee for the period 01.04.09 to 31.03.2010, for account no. xxxxxx, there has been a cash deposit of an amount of Rs. 22,000/-only (The copy of the bank account statement is attached herewith). The cash of Rs. 22,000/- was deposited on 01.02.2010. It is pertinent to mention here that till 20.03.2010, the assessee sold his tractor on 15.02.2010 for an amount of Rs. 3,28,000/-, agriculture equipments on 20.03.2010 for an amount of Rs. 1,50,000/- which in aggregate amounts to Rs. 4,78,000/- and the ITO, Audit in his audit objection report has stated that the cash received out of sale of these assets along with the cash received on account of sale of popular trees dated 05.07.2010 has been deposited by the assessee till 20.03.2010 which is a completely invalid and wrong fact. It is also submitted that the total amount received by the assessee on account of all the sales during the year amounts to Rs. 18,18,000/- out of which the assessee deposited in his bank account Rs. 18,00,000/- (i.e. Rs. 450,000/- on 08.04.2010 and Rs. 13,50,000/- on 05.07.2010). Therefore, it is humbly submitted that the assessee has deposited cash in his bank account as and when the cash is received on account of sale of various assets and not solely against the sale of residential plot.
Per contra the Ld. CIT DR relied on the findings of the Ld. Pr. CIT. It was submitted that a perusal of assessment record shows that the replies filed during the assessment proceedings were just placed on record and the A.O has failed to make any independent enquiries to verify the contention of the assessee that cash amounting to Rs. 18,00,000/- was deposited by the assessee out of sale consideration of plot on 02.08.2010 as per re-allotment letter by HUDA dated 02.08.2010 which was purchased by the assessee by way of transfer in his name on 15.03.2010. Moreover the said plot was purchased and sold within short span of period of 5 months and therefore attracts short term capital gain of Rs. 7,60,000/- (18,00,000 - 10,40,000). No inquiries have been made by the assessing officer in this regard. Accordingly, the escaped income of Rs. 7,60,000/- needs to be assessed as per Income Tax Act, 1961 under the head “short term capital gain”. In view of the facts discussed above, it was submitted that the assessment order is erroneous and prejudicial to the interest of Revenue. She accordingly supported the order and the findings of the Ld. Pr. CIT.
We have heard the rival contentions and purused the material available on record. We find that the ld PCIT has issued the show-cause stating that an amount of Rs 18 lacs has been deposited in the bank account out of sale proceeds of the plot of land which has been sold within a span of five months and short-term capital gains of Rs 7,60,000/- has escaped assessment which the AO has failed to enquire and thus, the order so passed was prima facie held as erroneous and prejudicial to the interest of the Revenue and subsequently the same reasoning is apparent from the findings of the ld PCIT in the impugned order. The assessee in his submissions has stated that the deposit of Rs 18 lacs was not just on account of sale of plot but also on account of sale of popular trees, tractor, trolley and other agricultural equipments and in support, has drawn our reference to submissions and documentation filed before the Assessing officer. It was submitted that all these transactions were undertaken by his father who has since expired and during the course of assessment proceedings, he has submitted the copy of the bank statement, purchase and transfer papers (HUDA), papers of sale of popular trees, tractor and other agricultural equipments and death certificate of his father and which has been considered by the AO and after examination and verification, the explanation regarding source of cash deposits was accepted. During the course of hearing, the Revenue couldn’t rebut the said factual position. Infact, from the findings of the ld PCIT, we find that he has failed to take into consideration the submissions and documentary evidence filed by the assessee during the course of assessment proceedings. We therefore find that the matter relating to cash deposits and related sale transactions of plot of land, popular trees and agricultural equipments were duly enquired into by the AO, the submissions of the assessee were called along with documentary evidence, the assessee responded to the notices and filed necessary submissions which were duly examined by the AO and after due application of mind, the AO passed a speaking order accepting the source of cash deposits. We therefore find that it is clearly not a case of lack of enquiry or adequate enquiry on part of the AO. Given the fact that the transactions were undertaken by the father of the assessee who has since expired and the assessee on his part has tried to furnish all relevant documentation in support of source of cash deposits which the AO considered and found to be adequate given the peculiar facts and circumstances of the case, the order so passed by the AO cannot be held to be erroneous in so far as prejudicial to the interest of the Revenue. In light of the aforesaid discussions, the order so passed by the ld PCIT is set-aside and that of the AO is sustained.