TMI Blog2021 (5) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the objection of non service of notice u/s 148 was not before the A.O. The assessee raised this ground before the Ld.CIT (A) as the substituted grounds which are duly reproduced by the Ld. CIT (A). However, these issues of the validity of proceedings u/s 147 for want of valid service of notice u/s 148 has not been decided by the Ld. CIT (A). The Ld. CIT (A) has rather stated that these grounds are general in nature. Thus, it is a matter of fact that all these issues regarding validity of reopening of the assessment and proceedings u/s 147 of the Income Tax Act without considering the fact of return of income filed by the assessee on 09.03.2007 as well as for want of valid service notice u/s 148 of the act remained un-adjudicated at the level of the A.O. as well the Ld. CIT (A). Though these issues an legal in nature however adjudication of same certain facts and record are required to be verified which are not before this Tribunal. Thus, in the facts and circumstances of the case these issues are remanded to the record of the A.O. for deciding the same after giving an appropriate opportunity of hearing to the assessee. Additions on account of cash deposit in the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. 5. The learned CIT(A) has erred in law and on facts in not appreciating the fact that the total amount of ₹ 13,63,985/- was not deposited in one go but on several dates and almost each deposit is followed by corresponding withdrawal and there is no dispute that the bank account belongs to the appellant and so only peak of the cash credits in the bank account may be held as unexplained money u/s 69 A. 6. The appellant craves leave to amend or substitute all or any of the ground at the time of hearing. 3. Ground Nos. 1 to 3 are regarding the validity of initiation of proceedings u/s 147/148 for want of valid service, incorrect facts recorded by the Assessing Officer (A.O.) in the reasons for reopening and non- adjudication of these issues by the Ld. CIT (A). 4.1 The Ld. AR of the assessee submitted that the assessee has filed his return of income for A.Y.-2006-07 on 09-03-2007 manually vide acknowledgement No. 0102000345 in Form-2D disclosing income of ₹ 97,936/-. Obviously, return was filed u/s 139(4). The appellant, during the relevant year, enjoyed income from petty contract works of individuals. Whatever receipts the appellant got th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible to him to be adjudicated on substituted grounds of appeal. No doubt a discretion is vested on the Ld. CIT(A) vide subsection (5) of section 250 but he must give reason as to why the said discretion has not been used in the favour of the appellant. In view of above submission, it can be said that learned CIT(A) has erred in law as well as on fact to not entertain the substituted grounds of appeal without any reason. Reliance is placed by the appellant on ratio of following judicial pronouncements: 1. Ajeet Kumar Seth v. Commissioner of Income-tax [2008] 170 Taxman 154 (Allahabad) 2. Commissioner of Income-tax v. Jindal Saw Pipes Ltd. [2010] 328 ITR 338 (Delhi) 4.4 It is further submitted that service of notice is a sine qua non for initiation and completion of a valid proceeding. The appellant has claimed before the Learned CIT(A), that there is no service of notice u/s 148 on the appellant. The appellant has raised this issue in ground no. 2 in substituted grounds of appeal. For a moment if it is assumed that he has validly not entertained the substituted grounds, even the issue is covered in ground no.1 of the original ground when it is stated that the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been accepted by the department. Thirdly, negating the information given in the said return (whether it is valid or invalid) is not justified because the department has accepted the same and information was with the department on 09-03-2007 i.e. before initiation of proceedings u/s 147. 4.6. In regard to this ground, the appellant contended that the learned CIT(A) has failed to appreciate that total cash deposit of ₹ 13,63,985/- was not deposited in one go but the same was deposited round the year in several amounts. Similarly, there were cash withdrawals after some deposits through cheques. Under the circumstances if it is assumed that the appellant has some unexplained money with him, it is logical conclusion that the same money was recycled in the bank account in the form of cash deposits on different dates. Bank Statement of the account is annexed with this submission as Annexure-B. A cash flow statement prepared from the same is also annexed as Annexure-N. In this statement, from cash withdrawals made by the appellant, cash availability on particular date has been drawn. It is found that the appellant has no cash available with him to deposit sums shown agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed manually therefore, it was not in the knowledge of the A.O. at the time of issuing notice u/s 148 of the Act. The Ld. CIT (A) has clearly held that the alleged return of income filed in Form 2D manually is nothing but after thought act of the assessee to avoid the tax liability. The assessee has failed to produce any documentary evidence to explain the source of the deposit made in the bank account. Thus, reopening is valid when there is a tangible material with the A.O. in the shape of deposits in the bank account of the assessee to form the belief that the income assessable from tax has escaped assessment. He has relied upon the orders of the authorities below. 6. I have considered the rival submissions as well as relevant material on record. As far as deposit of cash in the savings bank account of the assessee to the tune of ₹ 13,66,985/- is concerned the assessee has not disputed the said amount and the information received by the Assessing Officer on the basis of AIR information. The assessee has explained the source of cash deposit as the contract receipt which were offered to tax in the return of income filed by the assessee on 09.03.2007. The said return w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds are general in nature. Thus, it is a matter of fact that all these issues regarding validity of reopening of the assessment and proceedings u/s 147 of the Income Tax Act without considering the fact of return of income filed by the assessee on 09.03.2007 as well as for want of valid service notice u/s 148 of the act remained un-adjudicated at the level of the A.O. as well the Ld. CIT (A). Though these issues an legal in nature however adjudication of same certain facts and record are required to be verified which are not before this Tribunal. Thus, in the facts and circumstances of the case these issues are remanded to the record of the A.O. for deciding the same after giving an appropriate opportunity of hearing to the assessee. 7. Ground No. 4 and 5 are regarding the merits of the additions made by the A.O. on account of cash deposit in the bank on account of the assessee. The Ld. A.R. of the assessee has submitted that the Ld.CIT (A) has relied upon the decision of the Mumbai Benches of the Tribunal in case of Shri Prabhat M. Chamriya vs. I.T.O. in ITA No. 3059 of 2015 dated 05.05.2017 however, the said decision was subsequently recalled in the miscellaneous app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... com 476 (Allahabad) 2. Income Tax Officer v. Maheshkumar Jayantilal Vora [2004] 3 SOT 96 (Rajkot Tribunal) 3. S. Venkat Reddy v. Income Tax Officer, Ward 8(2), Hyderabad ( 2016) 76 taxmann.com 128. 8. On the other hand, the Ld. DR has submitted that the assessee has not produced any documentary evidence in support of the claim that the source of deposit made in the bank account is the contract receipt as the assessee is not maintained any books of account and the alleged return of income is filed based on the provisions of section 44AD of the Income Tax Act. He has relied upon the following decisions of (i) Bhaiyalal Shyam Behari vs. CIT 276 ITR 38 (Allahabad) (ii) Commissioner of Income Tax vs. Vijay Agricultural Industries 294 ITR 610 (Allahabad) (iii) I.T.A.T. Kolkata Bench decision dated 19.12.2013 in the case of Mrityunjay Kr. Sharma vs. DCIT, I.T.A. No. 1363-1364 of 2012. 9. I have considered the rival submissions as well as the relevant material on record. The assessee has explained the source of deposit as the contract receipt. In support of claim the assessee has referred to the return of income filed by the assessee as well as the order/certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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