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TMI Blog2020 (9) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction and various other reasons and hence the same may kindly be quashed. 2. Rs. 9,19,000/-: the ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 9,19,000/- made by the ld. AO on account of alleged unexplained cash deposits in the bank accounts u/s 68. Hence, the addition so made by the ld. AO and confirmed by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the penalty may kindly be deleted in full. 3. The ld. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234 A,B,C. The appellant totally denies its liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 4. The appellant prays your honours indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing." 4. Ground No. 1 of the appeal is regarding validity of reopening of the assessment and particularly the issuance of notice U/s 148 of the Act. The assessee is an individual and has not filed return of income U/s 139 of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome assessable to tax has escaped assessment. The ld DR has further submitted that it is not a simple case of information regarding deposit of cash in the bank account but the Investigation Wing has conducted a proper enquiry on the source of deposit and only after response/reply of the assessee was considered. The said information was sent to the A.O. for taking appropriate action. Thus, The A.O. was having report of the Investigation Wing and specific information of deposit of cash by the assessee in the bank account as well as the stand of the assessee regarding source of deposit. The reasons recorded by the A.O. manifests the application of mind on the part of the A.O. and therefore, it is a good prima facie case to forming the belief that the income chargeable to tax has escaped assessment. The ld. Pr.CIT has approved the reasons recorded by the A.O. which are part and parcel of the performa which was sent by the A.O. for approval/sanction. Thus, the sanction granted by the ld. Pr.CIT is based on the reasons recorded by the A.O. and not merely on the proposal sent by the A.O. In support of her contention, she has relied upon the following decisions: (i) Prem Chand Shaw (Jais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct which contemplates that no notice U/s 148 shall be issued inter alia not more than six years have elapsed from the end of the relevant assessment year. For ready reference, we reproduce Section 149 of the Act as under: Time limit for notice. 28 149. 29[(1) No notice under section 148 shall be issued30 for the relevant assessment year,- 31[(a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) 32[or clause (c)]; (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has 33escaped assessment amounts to or is likely to amount to one lakh rupees or more33 for that year;] 34[(c) if four years, but not more than sixteen years, have elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.] Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the information and formation of belief that the income assessable to tax has escaped assessment then the Pr.CIT need not to given separate reasons for his satisfaction. In the case in hand, the assessee has not filed any return of income U/s 139 of the Act and the A.O. received information from the DIT(Inv.), Jaipur regarding the deposit of cash of Rs. 9.19 lacs in the bank account of the assessee that too after an enquiry conducted by the Investigation Wing regarding the source of the said deposit and only when the reply of the assessee was not found to be satisfactory the said information was sent to the A.O. for appropriate steps. In view of these facts as well as the decisions relied upon by the ld DR, we are of the considered opinion that when the reasons recorded by the A.O. prima facie lead to the formation of belief that the income assessable to tax has escaped assessment then the ld. Pr.CIT is not required to record separate satisfaction as the reasons itself reveal the satisfaction of the A.O. The ld. CIT(A) has considered this issue in para 3.1.2 as under: "3.1.2 Determination: (i) From the facts of the case, it is seen that on the oasis of information that, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer is bound to dispose of the same by passing a speaking order, in the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the above said five assessment years." Moreover, considering the facts & circumstances of the case and relying upon various judgments of Hon'ble Supreme Court and Hon'ble High Courts on the issuance & service of notice u/s 148 within the limitation period, it is mandatory upon the AO to issue notice u/s 148 sending for delivery of service upon the assessee in view of the provisions of Section 282 of the Act, which has done by the AO before the expiry of the limitation period of 6 years. It has further been held that it is mandatory to issue and service of notice upon the assessee before starting of the assessment/ reassessment proceedings but or the purpose of limitation, the issue of notice u/s 148 before the expiry of limitation is enough compliance, which has already been made by the AO. It is further relied upon that 'what is the meaning of the term word and phrases "issue", it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained before issuing of the notice u/s 148. If original assessment has been framed u/s 143(3) or section 147 has been made for any relevant assessment year no notice can be issued by an A. 0. below the rank of ACIT or DC/T unless the JC/T has given a sanction on the reasons recorded by the A.O. that it is fit case for issue of notice. Provided that after the expiry of four years in such case from the end of relevant asst year no notice without the sanction of CTT or CC1T can be issued. In cases other than stated aforesaid no notice shall be issued by an A. 0. below the rank of JCIT after the expiry of four years from the end of relevant assessment year without the sanction of JCIT. However only sanction is required from the JCIT, CIT & CCIT as required and notice need not be issued by them. In case where notice u/s 148 is issued in violation of the provisions of section 151 discussed above proceedings undertaken against such notice are invalid. Reference may be made to the judgments: 249 CTR(Delhi)357 (Bombay) 370 (iii) Issue of Notice within the limitation period: Provisions of time limit for issue of notice have been provided in Section 149 of the Act. The time limit for iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Hon'ble Apex Court in the famous case of GKN Drive Shaft reported in 259 ITR (SC )19. In view of the above, it is construed that the .AO has issued u/s 148 after following the provisions of Section 147 read with Section 151(2) & Section 149(1) and sent for delivery of service of the notice within the limitation through the postal authority in view of the provisions of Section 282 of the Act. Moreover, the assessee has furnished no evidence supporting to his claim of issuance of notice in contrary of the provisions of Section 148 read with Section 151(2) & Section 149(1) and further service of the notice as per the provisions of Section 282 of the Act before starting of assessment/reassessment proceedings. A copy of reasons recorded u/s 147 has already been provided to the assessee. Therefore, it is averred that the above notice is a valid one which has been issued and sent for delivery of service before expiry of the limitation period as per the law and thus, the objection of the assessee on the account is not tenable in the eyes of the law and the same is hereby rejected. In view of the facts & circumstances of the case and settled law, as discussed above, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent u/s 147 of the Act. Reliance is placed on the decision of Hon'ble Apex Court in the case of Raymond Woollen Mills Ltd. Vs ITO [1999] 236 ITR 34 (SC), wherein it was held by their lordship that: "In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed." (iv) Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter, to make deposit in the bank accounts. The assessee has not furnished any evidence of source of wife's income which has been claimed to have deposited in the above bank account. It is revealed that the assessee unsuccessfully makes statement in affidavit form at different levels without any substantia, evidence in supported to the claims) and thus, such statement lacks verification of the true & correctness of the facts. It is revealed that the assessee used to take different stand at different level without substantial evidence which cannot be substituted by giving self-serving statement. In the objection letter dated 20/10/2016, the assessee has categorically submitted as under: - "That at present I am not having physical evidence of deposits in the Yes bank being very old matter that is why I am giving to you affidavit on oath. That yet your honour is of satisfied about my above contention than the same may be taken as my business receipts from jewellery trading or boutique and net profit may be worked on those receipts. Here the assessee stands on the same submission." In contrary to the above submission, the assessee has further submitted vide reply dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld justified u/s 68 of Income Tax Act 1961. iv. INDUS VALLEY PROMOTERS LTD. v. COMMISSIONER OF INCOME-TAX [2008]305 ITR 202 (DELHI) Cash credits-Assessee failing to prove identity or creditworthiness of creditors and source of deposits -Additions justified u/s 68 of Income-tax Act, 1961 v. CHAND PRAKASH VIJ v. C1T [ITR NO. 626 OF 2008, DECIDED ON 12.12.2008]/[2009] 16 CPT 570 (PUNJ. & HAR.) Tribunal's finding that assessee had not been able to explain source of cash deposit in bank account, is a finding of facts vi. CIT vs. P. MOHANAKALA (2007) 291 ITR 278 (SC) Cash credits; Burden of proof - Unexplained cash credits - Burden of proof - concurrent findings of fact that cash credits were not genuine - If such a finding could be interfered with by the High Court - The burden was upon the assesses to prove to the satisfaction of the Assessing Officer that the cash credits were genuine - The assessee in the instant case having failed to discharge the burden the Assessing Officer rightly treated the cash credits as income of the assessee which finding of fact having been upheld by the Commissioner (Appeals) as well as the Tribunal, the High Court erred in disturbing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate proceedings, the appellant again relied on its claim that the cash was deposited out of sale consideration of the property sold by his father Shri Tarachand Ajmera. The appellant filed copy of sale deed in support of above claim. From the sale deed, it is seen that the above property was sold for Rs. 53,00,000/- on 04.06.2007. Shri Tarachand Ajmera received Rs. 33,00,000/- vide cheque No. 059082 dated 14/05/2007 and Rs. 20,00,000/- vide cheque No. 068902 dated 14.05.2007 drawn on Citi Bank, Jaipur. The appellant has not submitted the bank account of Shri Tarachand Ajmera where such amount was deposited. In absence of bank account of Shri Tarachand Ajmera, it is not verifiable that any cash was withdrawn out of the above sale proceeds. The appellant has failed to establish any trail of cash flowing into his bank account. It is also seen that there is no cash withdrawal in the bank account of the appellant, which can explain the source of cash deposit. In view of the above facts, the appellant has miserably failed to discharge its onus regarding the source of cash deposited in the bank account. Therefore, the addition made by the AO on account of unexplained cash deposit in bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Chhitar Singh Gurjar Vs ITO in ITA No. 594/JP/2016 dated 26/09/2016. vii) ITO, Kishangarh Vs Sh. Pushpendra Kumar Jain ITA No. 289/JP/2012 dated 01/01/2016 9. On the other hand, the ld DR has submitted that the assessee has taken stand that the source of deposit is the sale proceeds of the land by the assessee. However, the ld. CIT(A) has recorded the fact that the entire sale consideration was received by the father of the assessee through cheque and the assessee has not produced any record to show that prior to deposit made in the assessee's bank account, any cash was withdrawn from the bank account of the father of the assessee. Despite specific directions, the assessee failed to produce the bank account statement of father of the assessee in support of his claim of source of cash deposit. Further the assessee has declared income of Rs. 1,48,000/- which is even not sufficient to meet the household expenses, therefore, the said income cannot be treated as source of deposit of Rs. 9.19 lacs in the bank account of the assessee. She has relied upon the orders of the authorities below. 10. We have considered the rival submissions as well as relevant material on record. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, to the extent of income declared by the assessee as well as the wife of the assessee has to be considered as source of deposit. Hence, we set aside this issue to the record of the A.O. for proper verification of the facts regarding the source being the sale proceeds of the property sold by the father of the assessee. The assessee is also directed to furnish details of bank account of father of the assessee for the purpose of conducting the proper enquiry by the A.O. by calling the relevant details from the bank. Hence, this issue is restored back to the file of the A.O. 11. Ground No. 3 of the appeal is consequential in nature and need not require any adjudication. 12. Now we take ITA No. 516/JP/2019. In the penalty appeal, the assessee has raised following grounds: "1.1 The impugned penalty order U/s 271F dated 19/05/2017 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same may kindly be quashed. 2. Rs. 5,000/-: the ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the penalty of Rs. 5,000/- imposed by the ld. AO u/s 271F. Hence, the penalty so imposed by the ld. AO and conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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