Tribunal invalidates tax notice and cash deposit addition, ruling in favor of appellant. The Tribunal ruled in favor of the appellant, invalidating the notice u/s 148 of the Income Tax Act, 1961, and overturning the addition of Rs. 19,19,333/- ...
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Tribunal invalidates tax notice and cash deposit addition, ruling in favor of appellant.
The Tribunal ruled in favor of the appellant, invalidating the notice u/s 148 of the Income Tax Act, 1961, and overturning the addition of Rs. 19,19,333/- in cash deposit in the Savings Bank Account. The Tribunal found that the Assessing Officer's actions lacked proper application of mind in both instances, similar to previous cases. The assessment order was annulled, and the appellant's appeal was allowed. The order was pronounced on 11.06.2020.
Issues involved: 1. Validity of notice u/s 148 of the Income Tax Act, 1961. 2. Addition of Rs. 19,19,333/- in respect of cash deposited in the Savings Bank Account.
Analysis: Issue 1: Validity of notice u/s 148: The appellant challenged the validity of the notice u/s 148, arguing that it was not in accordance with the law. The Assessing Officer proceeded ex parte as the appellant did not attend the assessment proceedings and no return was filed in response to the notice u/s 148. The appellant contended that the reasons recorded by the Assessing Officer and the approval given by the Additional CIT lacked proper application of mind. The appellant had indeed filed a return of income before the notice u/s 148 was issued, which the Assessing Officer overlooked. The Tribunal found that the Assessing Officer issued the notice mechanically without due consideration, similar to a case previously decided by the Hon'ble High Court of Delhi. Consequently, the Tribunal quashed the notice u/s 148, thereby annulling the assessment order.
Issue 2: Addition of Rs. 19,19,333/- in cash deposit: The appellant disputed the addition made by the Assessing Officer regarding the cash deposited in the Savings Bank Account. The appellant approached the CIT(A) and submitted additional evidence under Rule 46A of the I.T. Rules, which was not admitted by the CIT(A). The Tribunal observed that the Assessing Officer's actions lacked proper application of mind, similar to the case discussed earlier. The Tribunal allowed the appellant's appeal, setting aside the addition of Rs. 19,19,333/-.
In conclusion, the Tribunal ruled in favor of the appellant on both issues, invalidating the notice u/s 148 and overturning the addition of Rs. 19,19,333/- in cash deposit. The order was pronounced on 11.06.2020.
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