TMI Blog2023 (4) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... erify the maintainability of the aforesaid claim of the assessee by calling for the supporting documentary evidences, i.e., purchase/sales bills which would substantiate the assessee s claim that the cash deposits in question were sourced out of the turnover of his aforesaid trade. Ground allowed for statistical purposes. - ITA No. 205/RPR/2022 - - - Dated:- 27-3-2023 - SHRI RAVISH SOOD , JUDICIAL MEMBER For the Assessee : Shri S.R. Rao, Advocate For the Revenue : Shri Piyush Tripathi, Sr. DR ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 30.06.2022, which in turn arises from the order passed by the A.O under Sec. 144/147 of the Income-tax Act, 1961 (in short the Act ) dated 22.11.2019 for the assessment year 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before me: 1) In the facts and circumstances of the case, the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi has erred in confirming addition of Rs.5,35,000/- being 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 4. I have given a thoughtful consideration and find substance in the claim of the Ld. AR that the delay in filing of the present appeal had occasioned not on account of any malafide conduct or lackadaisical approach on the part of the assessee but for reasons which were beyond his control. Although the assessee appellant ought to have been more vigilant about filing of the present appeal within the stipulated time period, but considering the totality of the facts leading to the delay of 63 days in filing of the same, I am of the considered view that the same merits to be condoned. 5. Succinctly stated, the A.O. on the basis of information received by him that the assessee during the year had though made a cash deposit of Rs.10,70,000/- in his savings bank account with State Bank of India, Branch Bhaiyathan but had not filed his return of income, thus, initiated proceedings u/s.147 of the Act. Notice u/s.148 of the Act was issued by the A.O on 28.03.2019. In compliance, the assessee filed his return of income declaring an income of Rs.2,38,220/-. 6. During the course of assessment proceedings, on being queried about the source of the cash deposits of Rs.10.70 lac in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me. 9. The Ld. Authorized Representative (for short AR ) for the assessee at the very outset assailed the validity of the reasons to believe recorded by the A.O for initiating proceedings u/s.147 of the Act. My attention was drawn by the Ld. AR to the copy of the reasons to believe , Page 1 of APB. It was submitted by the Ld. AR that the reasons to believe recorded by the A.O dated 18.02.2019 were not as per the standard procedure that was prescribed by the CBDT for recording of satisfaction u/s.147 of the Act vide its internal guideline that was circulated amongst the PCIT, CIT (Central), DGIT (Inv.), CIT-International Taxation and CCIT Exemption. My attention was drawn to the standard procedure laid down by the CBDT vide its internal guideline dated 10.01.2018 (supra), Page 19 to 29 of APB. On the basis of his aforesaid contention, it was submitted by the Ld. AR that as the reasons to believe were not in conformity with the aforesaid standard procedure that was prescribed by the CBDT for recording of satisfaction for initiating proceedings u/s.147 of the Act, therefore, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 13. As the Ld. AR has assailed the validity of the jurisdiction assumed by the A.O for initiating proceedings u/s.147 of the Act, therefore, I shall first deal with the same. 14. As observed by me hereinabove, it is the claim of the Ld. AR that as the reasons to believe recorded by the A.O for initiating proceedings u/s.147 of the Act dated 28.02.2019 are not in conformity with the standard procedure for recording satisfaction u/s.147 of the Act as had been laid down by the CBDT vide its internal guideline dated 10.01.2018, therefore, the very basis for initiating proceedings in the case of the assessee could not be sustained and was liable to be quashed. 15. I have given a thoughtful consideration and am unable to persuade myself to subscribe to the aforesaid claim of the Ld. AR. I, say so, for the reason that though the CBDT circular or instruction is binding on the department, but the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh the claim of the assessee that he was engaged in small time trading business, therefore, in the totality of the facts after partly accepting the assessee s claim he had scaled down the addition to 50% of the entire amount of cash deposits i.e. to Rs.5.35 lac. 20. After having given a thoughtful consideration to the facts involved in the present case, I am of the considered view that as observed by the CIT(Appeals) and, rightly so, the A.O had failed to conclusively establish that the assessee was not engaged in any small time business of trading of wheat, agricultural fertilizers and agro-products. Also, I concur with the CIT(Appeals) that it is a matter of an admitted fact borne from record that the assessee could not substantiate his claim of being engaged in any retail trade by placing on record any clinching evidence. At the same time, I find some substance in the claim of the Ld. AR that now when the A.O while framing the assessment had accepted the assessee s returned income under the deeming provisions of Section 44AD of the Act, i.e. @8% to his trading turnover of Rs.18,23,140/-, therefore, he had impliedly accepted his trade receipts to the said extent. Although, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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