TMI Blog2023 (12) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... his case u/s 147/148 of the Act. However, we note that Assessing Officer did not dispose of the objection raised by the assessee, by way of passing speaking order, in writing and therefore re-assessment proceedings should be quashed on this count only. Reasons were recorded by the Assessing Officer in an arbitrary manner and there is no application of mind by the AO. For example, the reasons stated that assessee has deposited an amount in his bank account to the tune of Rs. 14,55,300/-, whereas the actual amount deposited in the bank account by the assessee was to the tune of Rs. 21,54,800/- hence reasons were recorded on arbitrary basis and there is no application of mind by the AO. Therefore, respectfully following the binding precedent of Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] quash the reassessment proceedings. Decided in favour of assessee. Addition u/s 69A - as per AO considering the smallness of the amount of cash deposit a suitable addition, say, @ 5% of the total cash deposit in the bank account of assessee may be sustained in the hands of assessee - HELD THAT:- Admittedly, AO during the assessment pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant objection and without passing speaking order as required under the law and as per the guidelines of Hon ble Supreme Court in the case of GNK DRIVESHAFT. 4. Ld.CIT(A), NFAC, Delhi has erred in law and on fact to uphold total addition of Rs. 29,09,512/- / and / or AO s addition u/s 69A at Rs. 28,76,000/- ignoring the fact that the said amount is a gross receipts and not the income chargeable to tax. 5. Ld. CIT(A), NFAC, Delhi has erred in law and on fact to direct the AO to give telescoping effect of cash withdrawal against cash deposit during the year under appeal. He further erred in direct in the AO to apply percentage of profit on gross receipts appearing in the appellant record. 6. Ld. CIT(A),NFAC, Delhi has erred in law and on fact to uphold AO s addition for bank interest at Rs. 6,376/- as well as AO s disallowed the deduction u/s 80C of the Act for Rs. 27,136/-. 4. Both these appeals filed by the assessee for AYs 2010-11 and 2011-12, are barred by limitation by 489 days each. The assessee has moved a petition requesting the Bench to condone the delay, in both these appeals. The contents of the petition for condonation of delay filed by the assessee, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.e.f. 01.03.2022 (i.e., upto 31.05.2022) vide their order dated 10.01.2022. Ld. CIT(A), NFAC, Delhi has decided my appeal on 15-03-2022 (i.e. during Covid-19 effected period) ex-parte on the ground of nonappearance/ non filing of supporting documentary evidences in response to his notices u/s 250 of the Act dated 09.12.2021, 20.12.2021 and 02.03.2022, which was neither in my knowledge nor in the knowledge of my CA Shri Jignesh Sha, who has filed appeal for me. 4- Thereafter, my family members have put strict restriction upon me for going outside the home. My auto consulting business was also closed in those days. Even they are not making me aware of any communications or letters received from anybody including Income tax Department by following doctors that I may not be given such news which creates mental and emotional pressure or tension. This is because of the fact of my heart disease as well as possible effect of pandemic Covid-19 upon such type of patients. As a result of multiple efforts, my life can be saved. 5- After passing considerable time, I become well by health to some extent. So I can able to make contact of one of the retired officer from the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment of Hon ble Supreme Court in suo motu Writ Petition in MA No.21/2022 and the balance delay in filing both the appeals have not been explained by the assessee in a satisfactory manner. Therefore, delay should not be condoned and both the appeals of assessee should be dismissed. 8. I have heard both the parties on this preliminary issue. I note that Hon ble Supreme Court of India has granted substantial relief w.r.t. filing of appeals, petitions, various proceedings under different laws, compliances, reply to notices, assessment proceedings etc. Last of such orders is in MA No.21/2022 whereby period from 15.03.2020 to 28.02.2022 stands extended. Further 90-days period is allowed w.e.f. 01.03.2022 (i.e., upto 31.05.2022) vide their order dated 10.01.2022. The Ld. CIT(A), (NFAC), Delhi has decided assessee`s appeal on 15-03-2022 (i.e. during Covid-19 effected period), ex-parte, on the ground of non-appearance/non-filing of supporting documentary evidences in response to his notices u/s 250 of the Act dated 09.12.2021, 20.12.2021 and 02.03.2022, which was neither in assessee`s knowledge nor in the knowledge of CA Shri Jignesh Shah, who has filed appeal of the assessee. 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play. (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation. (ix) The conduct, behavior and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such litigation. (xi) It is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On verification of bank statement, it was noticed by the Assessing Officer that during the relevant A.Y. 2010-11, the assessee has deposited following amount in his above said bank accounts: Sl.No. Name of bank Account No. Amount of cash deposited Amount other than cash deposited 1 HDFC Bank Vapi 01701000054723 14,55,300/- 7,21,200/- 2 Bank of Baroda, Fansa Br. 10050100007221 1,42,000/- 3 Dena Bank, Fansa Br. SB-3745 53,250/- 4 ICICI Bank 017901501413 5,04,250/- 21,54,800/- 7,21,200/- During the course of assessment proceedings, the assessee was asked to explain the source of the said amount deposited in his bank accounts with supporting evidence. The assessee expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the assessee was to the tune of Rs. 21,54,800/- hence reasons were recorded on arbitrary basis and there is no application of mind by the Assessing Officer. 18. Shri Rajesh Upadhyay further stated that in the reasons recorded, the Assessing Officer stated that assessee has filed the return of income showing total income of Rs. 1,62,500/-. However, in fact, the assessee has filed his return of income showing total income to the tune of Rs. 1,43,560/-, hence reasons were recorded based on arbitrary basis. The Ld. Counsel also stated that during assessment stage assessee requested Assessing Officer that reopening of assessment is not valid and assessee objected the reopening of assessment, despite of this, the Assessing Office did not dispose of the objection raised by the assessee in respect of reopening of assessment u/s 147 r.w.s. 148 of the Act. Therefore, it is against the judgment of Hon ble Supreme Corut in the case of GKN Driveshafts (India) Ltd. vs. ITO And Ors. in Civil Appeal No.7731 of 2002 dated 25.11.2002. Since the Assessing Officer without disposing of the objections raised by the assessee, framed the re-assessment proceeding, which is invalid and hence, reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved that above objections raised by the assessee during the assessment stage have not been disposed of by the Assessing Officer. I note that the proper course of action for the notice u/s 147/148 is to file return of income and if assessee so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the assessee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the assessee`s case, the Assessing Officer has not disposed of the objections raised by the assessee by passing a speaking order, therefore reassessment proceedings u/s 147/148 of the Act are void, for that reliance can be placed on the judgment of the Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra), wherein it was held as follows: We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. The Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant prays that he may be allowed one more opportunity of being heard. 4. Ld. CIT(A), NFAC, Delhi has erred in law and on fact to uphold total addition u/s 69A of Rs. 6,85,838/- ignoring the fact that the said amount is a gross receipts out of appellant s auto consultation business and not the income chargeable to tax. 5. Ld.CIT(A), NFAC, Delhi has erred in law and on fact to direct the AO to give telescoping effect of cash withdrawal against cash deposit during the year under appeal. He further erred in directing in the AO to apply percentage of profit on gross receipts appearing in the appellant record. 6. Ld.CIT(A), NFAC, Delhi has erred in law and on fact to uphold AO s addition for bank interest at Rs. 983/-. Further the appellant is also eligible for deduction u/s 80C and 24b of the Act, which may be directed to be allowed to the appellant. 27. At the outset, Ld. Counsel for the assessee informs the Bench that assessee does not wish to press ground No.1, therefore, I dismiss ground No.1, as not pressed . 28. Succinct facts qua the issue are that during the assessment proceedings, on verification of bank statement of bank account No.01701000054723 mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to explain the source of the money, so deposited in the bank. 33. I have heard the rival arguments made by both the sides and perused the material available on record. Admittedly, the Assessing Officer during the assessment proceedings made addition on account of cash deposited aggregating to Rs. 2,64,500/-, as well as amount deposited by cheques is to the tune of Rs. 4,20,355/-. The amount deposited by way of cheques in the bank account is out of known sources, hence addition should not be made in the hands of the assessee, hence addition to the tune of Rs. 4,20,355/- is hereby deleted. 34. So far cash deposit of Rs. 2,64,500/- is concerned, I note that issue under consideration is longer res integra and Co-ordinate Bench of this Tribunal in the case of Mukesh K. Lakahni v. ITO, in ITA No.20/SRT/2023 A.Y 2010-11, order dated 04.09.2023 wherein it was held that ad hoc addition at the rate of 5% of cash deposited in the bank account, is fair addition in the hands of the small assessee considering the smallness of the amount. The findings of the Tribunal are reproduced as follows: 11. I note that the total credit in the bank statement, after eliminating contra-entr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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