TMI Blog2022 (4) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT held that where Assessing Officer issued a reopening notice against assessee on ground that an information was received that assessee had deposited certain amount in cash in her bank account but did not file return of income, since Assessing Officer reopened assessment after recording due reasons and after following due process and such information available before Assessing Officer was relevant and afforded a nexus to formation of prima facie belief that income chargeable to tax had escaped assessment in hands of assessee, impugned reopening notice was justified. Therefore, in our considered view, looking into the totality of facts in the case, the Ld. Assessing Officer is justified in re-opening the assessment in the instant set of facts. The process of re-opening was initiated after affording due opportunity to the assessee to give explanation regarding source of deposit. It is only when the assessee failed to comply / co-operate that case was re-opened u/s 148 of the Act, after following due process of law. - Decided against assessee. Addition as cash credit in the hands of the assessee - As the assessee has been able to establish the source of cash deposit. The Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned CIT(A) has erred in confirming the additions made by the AO despite the fact that the Assessment Order was passed ex parte in violation of the Principles of Natural Justice. 2. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of reopening the assessment u/s 147 of the Act. On the facts and circumstances of the case, learned CIT(A) ought to have held that the action of reopening is without jurisdiction and not permissible either in law or on facts. 3. The learned CIT(A) has erred in law and on facts of the case in confirming addition of ₹ 22,21,1007- as unexplained cash credits u/s. 68 of the Act. ₹ 6,66,330/- 4. The learned CIT(A) has erred in law and on facts of the case in holding that alternatively, addition would be made u/s. 56 of the Act as Income from Other Sources without specific notice to the effect which is in violation of the principles of natural justice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sent several notices on the assessee (as listed in the assessment order), which all remained uncompiled with. Accordingly, the Ld. Assessing Officer added an amount of ₹ 22, 21, 100/- as unexplained cash credits u/s 68 of the Act. The Ld. Assessing Officer observed as under while passing the assessment order: 4.2. In view of the above facts, it can be seen that assessee has failed to provide the source of cash deposit of ₹ 25,21,100/- in the saving bank account. It can be inferred that assessee has nothing to say more in the matter and the cash deposited in the bank account is from unexplained sources. On further perusal of the bank statement, it is noticed that assessee has made cash deposits and cash withdrawal during the relevant period. Therefore, for natural justice a peak is drawn as under:- Date Particulars Amount (Rs.) Balance (Rs.) 24/09/2009 Deposit 1000 -1000 17/11/2009 Deposit 700000 -701000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Before the Ld. CIT(A), the assessee submitted that all parties are known to the assessee and are genuine, their identities have been established, their confirmations of giving gift to the assessee have been taken on record, copies of bills of agricultural produce on sample basis were produced, evidence of donor s land-holdings were produced, which all prove the genuineness of the transaction and no action u/s 68 of the Act is called for in the instant set of facts. The assessee submitted that since the donors are agriculturists, they are not required to file return of income. In the alternative, the assessee argued that for invoking section 68 of the Act, unexplained credit have to be found in the books of account maintained by the assessee. Now, in the instant case, the assessee being a student of 19 years of age is not required to maintain books of accounts and secondly, bank pass book does not qualify as books of account so as to invoke provisions of s. 68 of the Act. The assessee placed reliance on several judicial precedents in support of his contention. 5. The Ld. CIT(Appeals) however, dismissed the assessee s appeal by observing as under: The above-mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gifts. If all these gifts were genuinely received by the appellant in the assessment year under consideration (though in none of the confirmation letter, the date on which the gift was given has been mentioned), he would have filed a regular return u/s 139(1) of the Act or at least in response to notice u/s148 of the Act giving complete account of the amounts of gifts so received. The appellant did not discharge his primary onus to file the return of income. The father of the appellant who is having PAN has also not furnished the details of returns of income, if any filed by him. Thus, none of the persons claiming to have given the gifts has authentic and verifiable record of having the incomes/savings of the past years with the details of agricultural expenses, household expenses and social/medical expenses allowing the surplus of funds enabling them to provide the so-called gifts to the appellant. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 5.6 Further, several Tribunals and High Courts of various states have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his ground, the assessee has challenged the re-opening of case as being without jurisdiction. On going through the reasons for re-opening , it is seen that on receipt of information from AIR that assessee had received cash deposits of ₹ 25,21,100/-in saving bank account maintained with Corporation Bank, the Ld. Assessing Officer first called upon the assessee to justify the transaction and only when the assessee failed to comply, the Ld. Assessing Officer re-opened the case u/s 148 of the Act. The assessee had not filed return of income for the captioned year. Not only this, the subsequent conduct of the assessee during the assessment also points to total non-cooperation on his part and in absence of any explanation forthcoming from the assessee, the Ld. Assessing Officer was forced to pass ex-parte assessment order treating the above sum as undisclosed income of the assessee. In our view, since the assessee had not filed return of income for the captioned year and there was a huge cash deposit of ₹ 25,21,100/- in his saving bank account, and further, when the assessee was called upon to provide an explanation in respect of this deposit, he did not comply, this itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record, the lenders are known parties to the assessee and it is not the Revenue s case that there is no rationale for deposit or that it is the assessee s own unaccounted money which has flowed back to his bank account, the assessee is a student who was required to have certain liquidity in order to pursue higher education and it is for this purpose as affirmed by parties that cash was deposited in the assessee s bank account, details of landholding of lenders have been furnished and on sample basis details of agricultural produce in respect of lenders have also been placed on record. The Ld. CIT(Appeals) has not brought on record any cogent material or reasoning to disprove the above contention of the assessee or brought on record any material to disprove the documentary evidence placed on record by the assessee. In our considered view, the assessee has discharged the initial burden cast upon him u/s 68 of the Act. In the case of Sridhar Sahoo v. ITO [2017] 88 taxmann.com 881 (Cuttack - Trib.) the assessee was maintaining a saving bank account in joint name with his wife. In said bank account, certain cash was found deposited to which assessee explained that said amount was dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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