2022 (2) TMI 105 - AT - Income Tax

Tribunal emphasizes evidence examination and procedural compliance in tax appeal, remits for fresh assessment

The Tribunal allowed the appeal for statistical purposes, highlighting the importance of conducting a thorough examination of evidence provided by the ... Addition of unexplained cash deposits in the assessee's bank accounts - HELD THAT:- The subsequent utilization of the deposit amount could also assume significance in this regard. These are of course apart from the aspect of the time lag attending the dates of the first sale and the first bank deposit, as well as a reconciliation of the dates qua the stated source of the second deposit. Meet the assessee's first contention, i.e., of the impugned assessment being invalid as it was finalized while the assessment proceedings were on and, further, without the benefit of the information called for vide notice u/s. 142(1) dated 24/10/2019. The material called for, as apparent from the annexure to the said notice, is the copy of the assessee's HDFC Bank account (for the relevant year) which, in view of the fact that the AO is in the know of the cash deposited by the assessee in his said account (not contended as joint with his father) on 03/3/2012, and which fact is not disputed, rather appears to be available with him. Nothing, thus, turns thereon; there being in fact no explanation by the assessee in its respect either before the AO or before the first appellate authority. No prejudice stands shown caused to the assessee thereby. The argument, therefore, fails. It is a open set-aside, and nothing stated or observed herein, even as it may raise pertinent issue/s to be addressed, may be construed as an expression of any opinion by the Tribunal. Also, the assessee is at liberty to produce and rely upon any material in support of his explanation/s or otherwise to advance his case before the assessing authority, irrespective of whether it was produced during the first round or not - We decide accordingly. Issues:1. Delay in filing the appeal and condonation of the delay.2. Addition of unexplained cash deposits in the assessee's bank accounts.3. Validity of the assessment order and compliance with notice u/s. 142(1).Issue 1: Delay in filing the appeal and condonation of the delayThe appeal was delayed by 29 days, but a condonation petition explained that the delay occurred due to the counsel not receiving the appeal papers on time. The Tribunal accepted the explanation and proceeded with the hearing.Issue 2: Addition of unexplained cash deposits in the assessee's bank accountsThe primary issue raised in the appeal was the addition of Rs. 12,01,500 in the assessment due to unexplained cash deposits in the assessee's bank accounts. The assessee claimed that the cash was received by his father from the sale of ancestral land, supported by sale deeds. However, both the Assessing Officer and the CIT(A) did not accept the explanation due to the illegibility of the sale deeds.Issue 3: Validity of the assessment order and compliance with notice u/s. 142(1)The counsel for the assessee argued that the assessment was invalid as it was concluded before the compliance deadline of a notice u/s. 142(1). The Tribunal observed that the material provided by the assessee was not examined properly at any stage. The Tribunal directed the matter to be remitted back to the assessing authority for a fresh assessment, emphasizing the importance of due diligence and fairness in tax proceedings.In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the need for a thorough examination of the evidence provided by the assessee and proper compliance with procedural requirements in tax assessments.