9911796707
TMI Blog2025 (2) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... closed. 2.3 That in the original assessment proceedings a show cause notice bearing number: ITBA/AST/F143(3) (SCN)/2018- 19/1013300032 (1) dated 25.10.2018 was issued to the Assessee wherein it was stated that the Assessee's case for assessment year 2016-17 was selected for complete scrutiny through Computer Aided Scrutiny Selection (CASS) for following reasons: 1. large cash deposit in saving bank account 2. Large investment in property. That a notice u/s 143(2) of the Act was issued to the Assessee on 27.09.2017 which was duly served upon the Assessee. That thereafter Notice u/s 143(1) along with specific questionnaire were issued to the Assessee as per details given below: S.No. Particulars Date of fixation Date of compliance 1 Notice u/s 143(1) alongwith question 18.10.2018 24.10.2018 2 -do- 05.10.2018 11.10.2018 3 -do- 06.09.2018 12.09.2018 4 -do- 26.07.2018 10.08.2018 5 -do 20.07.2018 25.07.2018 It was also averred in the aforesaid show cause notice that the Assessee has neither filed any information / document even once leading to the conclusion that Assessee is deliberately not complying with the proceedings. The Assessee was told that in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother show cause notice [ page 24 of paper book] was issued to the Assessee wherein it was stated - "that you have not attended the assessment proceeding even once, which leads to the conclusion that you are deliberately not filed any reply. As per information available with this office you have made cash deposits of Rs. 32,88,320/- in his saving Bank account maintained with ICICI Bank Ltd., Chandigarh. Apart from this you have also purchased residential house at Gaziabad consideration a amount of Rs. 80,35,000/- ( Rs. 75,00,000/- + Stamp Charges of Rs. 5,25,000/- + Rs. 10,000/-Registration fee) during the financial year 2015-16. You are again requested to explain the source of investment made by you as mentioned above. In the absence of any explanation from you this office is left with no option but to complete assessment in your case ex-parte. In light of above facts it is proposed to complete the assessment u/s 144 of the Income-tax Act, after making an addition of Rs. 1,13.23,000/- (Rs. 80,35,000/- purchase of property + Rs. 32,88,320/- cash deposits). In this regard, you are requested to explain the source of investment made to purchase the said property amounting to Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OF REPLY WAS 06.12.2018, HENCE I HAVE DULY FILED MY REPLY IN TIME IN COMPLAINCE TO YO UR NOTICE. HENCE YOU ARE REQUESTED TO DROP THE PROCEEDINGS UNDER SHOW CAUSE. THE COPY OF ACK IS ENCLOSED HERE WITH FOR YOUR KIND REFERENCE. THANKING YOU SD KULDEEP SINGH." 2.8 That on 12.12.2018 yet another notice u/s 142(1) of the Act was issued to the Assessee were in further requisitions were made [ page 158 of paper book] the Assessee by response on page 159 of paper book brought to the notice of ld. A.O. same facts which are already recorded by us in para 2.5 (supra) [page 159 to 166] 2.9 That by additional response on page 167 of paper book the Assessee brought to notice of ld. Assessing Officer following (i) Declaration of the father of the Assessee in the presence of the purchaser of the Agreement to sell who has also signed on the same declaration before Ist Class Magistrate - Annexure-I. (ii) Copies of gift deed form father, mother-in-law and sister to the Assessee during the year under consideration- Annexure II [ 168 to 188 of paper book] 2.10 That by yet another response on page 189 of paper book the Assessee brought on the notice of ld. Assessing Officer the copy of FARD of Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement. Agreement to sell is also not submitted. Also, as per the affidavit, the deal was cancelled - i 29.04.2017 as the purchasers failed to execute the sale deed. 3.2 In the absence of supporting documents the credit worthiness of the cash amounting to Rs. 40,00,000/- given by your father could not be established and hence, cash deposits amounting to Rs. 40,00,000/- remained unexplained. 4. In view of the above facts, the order passed u/s 143(3) of the Income Tax Act, 1961 in your case is erroneous and prejudicial to the interest of the Revenue. You are therefore requested to show cause as to why the aforesaid order of assessment may not be revised under the provisions of Section 263 of the Income Tax Act, 1961. 4. In view of the above facts, the order passed u/s 143(3) of the Income Tax Act, 1961 in your case is erroneous and prejudicial to the interest of the Revenue. You are therefore requested to show cause as to why the aforesaid order of assessment may not be revised under the provisions of Section 263 of the Income Tax Act, 1961. 5. In this connection, your case is fixed for hearing before the undersigned on 12.03.2021 at 01:10 PM. In case of failure on your part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idences as pointed out in your notice under section 263 of Income Tax Act Act. vii) We understand that the show cause notice has been issued without verifying the complete records available on e-filing website and two documents for land holding and agreement to sell were brought to our notice for taking action under section 263 of Income Tax Act whereas both documents i.e., Fard for land holding and agreement to sell were duly uploaded at the time of assessment. 2.15 In view of the above reply to the Show Cause Notice u/s 263 of the Act the Assessee requested that the Revisionary proceeding be dropped as all material question posed to them in the Show Cause Notice are answered and that there is no deficiency on part of Assessee. They sought personal hearing in border to clarify any question if any. 2.16 That basis above documents on record, the ld. PCIT by impugned order in para 6 has finally held as under: "In the facts and circumstances of the case, the failure of the Assessing Officer make enquiries/verification to arrive at the correct law mistake the assessment order erroneous in so far as prejudicial to the interest of revenue. Hence, the said assessment order dated 24. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply to the Show Cause Notice and information furnished along with it have been totally ignored by the ld. PCIT while passing the impugned order which shows non application of mind and arbitrary exercise of power. It was contended that basis paper book filed running into pages 1 to 99 were in all material information along with documents are placed on record of this Tribunal (supra) with regard to assessment order of ld. Assessing Officer and so also with regard to revisionary proceedings u/s 263 of the Act that in both the proceedings i.e. u/s 143(3) and u/s 263 each and every query for the Revenue stood answered along with documentary evidence which describes source of money. It was contended that once all queries by the ld. A.O. are answered alongwith the documentary evidence which were all examined and verified by ld. A.O. before accepting the ROI there is absolutely no legal basis to pass the impugned order. The ld. PCIT ought not to have distorted the assessment order as there is no material on record to disturb the finding of ld. A.O. made in assessment order 3.2 The ld. AR then contended before us after taking us through pages 7 of paper book that no material information a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order that this document was unregistered document and further ld. A.O. has failed to conduct third party verification, on genuineness of transaction leading to availability of cash in the hand of Assessee The ld. AR per contra has contended that agreement to sell is an important document and need not be registered. By virtue of agreement to sell a right in personam was created in favour of vendee, in whose favour the agreement to sell had been executed. Such contractual right can be surrendered or neutralized by parties through subsequent contract- or conduct leading to no transfer of the property to the proposed vendee. Reliance was placed on the judgement of the Hon'ble Supreme Court of India in the case of Shri Sanjeev Lal etc. vs. CIT and another reported in 2014(7) TMI 99-SC. 3.7 The ld. AR in so far as following observation of ld. PCIT in the impugned order is concerned which is reproduced below. "4.1 The reply filed by the assessee has been considered. The assessee has made cash deposits in his bank account. These cash deposits are the source of investment in the flat Regarding the source of these cash deposits the assessee claimed that these were out of the cash g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee in the assessment order. It is only thereafter he has accepted the return of income and it is without making any additions. We thus find no infirmity legal or otherwise in the assessment order. Be hat as it may the ld. PCIT in exercise of power conferred exercised her power u/s 263 of the Act and sought revision of assessment order on the ground that the same is erroneous and prejudicial and issued a show cause notice dated 6.3.2021 to the Assessee on the basis of the details of land holding of Pratap Singh the father of the Assessee from whom the Assessee has claimed to have received Rs. 40 lakhs have not been furnished during the course of the assessment proceedings to prove genuineness of agreement to sell. Further it was alleged and stated that Assessee has also failed to furnish agreement to sell too. Basis non-furnishing of these two documents during the course of assessment proceedings source of cash deposit of Rs. 40 lakh has not been established and that the same remained unexplained. In view of this, assessment order is erroneous and prejudicial to the Revenue and that same deserves to be set aside u/s 263 of the Act. In reply Assessee brought to the Notice o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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