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2020 (12) TMI 107
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....de by the AO. The facts of the case in brief are that the AO on the basis of information that the assessee had made cash deposits of Rs. 20 lacs with HDFC Bank during the Financial Year 2010-11 relevant to the assessment year under consideration initiated the proceedings within the meaning of Section 147 read with Section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Since no return of income was received in response to the notice u/s. 148 of the Act, the AO assessed the income of Rs. 20 lacs treating the same as undisclosed income. 3. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and furnished the written submissions which has been incorporated in para 2 of the impugned order, which reads as under "Sub: Appellate proceedings in the case of Sh. Govinderjit Singh r/o village Hiana Kalna, Nabha A.Y. 2011-12 -PAN: CLVPS4520B Facts in brief: Case of the appellant has been reopened to verify the cash deposit of Rs. 20,00,000/- in his HDFC bank account. The appellant did not attend the assessment proceedings. Accordingly, the learned assessing officer completed the assessment u/s. 144 and charged the amount of Rs. 20 Lakhs to ....
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....the cash deposit from the concerned bank to make the assessment of total income of the appellant. Assessment order is not a speaking order as it does not disclose the detail of cash deposits. In this regard the appellant relies upon the following judgments: Case Laws CIT v. Ranicherra Tea Co. Ltd. [1994] 207 ITR 979 (Cal.) In this case, it was held that in making a best judgment assessment, the Assessing Officer does not possess absolute arbitrary authority to assess any figure he likes. Although he is not bound by strict judicial principles, he should be guided by rules of justice, equity and good conscience. Though there is an element of guess work in a 'best judgment', it shall not be wild one but shall have reasonable nexus to the available material and circumstances of each case. ITO v. Jitender Mehra (1995) 53 ITD 396 (Del-Trib.) It was held that even ex-parte assessment made under section 144 of the Income Tax Act must conform to rules of justice, equity and good conscience and cannot be arbitrary and capricious. There may be some guess work, but still there should be nexus between material available on record and income taken for assessment. 4. Reliance w....
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....n his HDFC Bank account. The notice was sent vide registered post and was not received back undelivered. As no communication was received from the assessee another show cause notice dated 05.01.2018 was again issued. However, this notice again remained un-complied with. In the interest of natural justice, a final opportunity was allowed to the assessee as per notice dated 13.03.2018 vide which a copy of the notice dated 28.11.2017, which was earlier sent through registered post, was also enclosed. The notice was duly served on the assessee. Despite affording reasonable opportunity, the assessee failed to comply with the terms of notice issued on 28.11.2017, 05.01.2018 and 13.03.2018. Therefore, on the basis of information available on record, the proceedings within the meanings of section 147 of the IT Act, 1961 were initiated accordingly, a notice under section 148 of the IT. Act dated 30.03.2018 vide RI_A RP 763089958IN which was not received back undelivered. However, no return of income was receive in response to such notice. 3. Subsequent to the initiation of proceedings under section 148 of the IT. Act and no receipt of return of income a notice under section 142(1) dated 1....
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....dingly, made a request for confirming an addition of Rs. 10,00,000/-, as against Rs. 20,00,000/- made as per order dated 05.12.2018. In support of his contention, the assessee has also filed a copy of his bank statement of A/c No. 01561000199117 with HDFC Bank. As per the bank statement, this account was opened on 25.01.2011 and there is a cash deposit of Rs. 10,00,000/- on 18.03.2011, as i evident from his bank statement. However, the assessee has not disclosed as to whether he is maintaining any other bank account except a bank account No. 01561000199117 with HDFC Bank. 4.1 In his appeal filed before your good-self, the assessee has virtually admitted that he source of cash deposit in his bank account is unexplained. He further admitted the fact of non-compliance of notice received by him from time to time in the course of assessment proceedings. However, no plausible explanation has been given for noncompliance of such notice where the deposit of Rs. 20,00,000/- in his bank account with HDFC Bank was confronted to him. Consequently, non-submission of return of income and requisite documents though the information of cash deposit of Rs. 20,00,000/- was made available to him in ....
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....n on merits, from the facts adduced above, it is evident that during the entire assessment proceedings, a number of opportunities were provided to the assessee to establish the genuineness of the source of deposit but he failed to avail such opportunities. This rather indicates that the assessee was purposely avoiding the compliance of notice to deprive the assessing officer for making through investigation in the matter. It is settled law that when the assessment is getting barred by limitation and the assessee is using dielectric tactics in furnishing the required information and details etc., the assessing officer is within his jurisdiction to complete the assessment to the best of his judgement on the basis of facts available on record. In view of these facts, there is no merit in the contention of the assessee and the same is liable to be rejected. However, your kind direction in the matter are solicited." 7. The ld. CIT(A) forwarded the report of the AO to the assessee for his comments. In response, it was submitted as under: 2.2 A copy of the above report was sent to the appellant for comments. In response the AR submitted his arguments as under: 'Sub: Appellate pro....
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....hat the assessee did not attend the proceedings. 3. In para 6 of the comments submitted by the assessing officer that the assessee is not entitled to file additional evidence under Rule 46A. In this regard it is submitted that the appellant assessee has not filed any additional evidence under rule 46A. The assessee has only submitted his bank account statement which is already on record of the assessing officer on the basis of which assessment has been completed. 4. In para 6.1 of her comments, the assessing officer has contended that "when the assessment is getting barred by limitation and the assessee is using dielectric tactics in furnishing the required information and details etc., the assessing officer is within his jurisdiction to complete the assessment to the best of His judgment on the facts available on record." Sir, I fully agree with observations made by the learned assessing officer. However, the learned assessing officer did not consider the bank statement of the appellant available on her record. In the following cases, it was held that in making a best judgment assessment, the Assessing Officer does not possess absolute arbitrary authority to assess any figure ....
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....laiming that the actual cash deposit in those cases was less than the addition made by the AO. It is however relevant to note that this cannot be the basis for allowing the relief to the assessee, as the facts of each case are different and it is not necessary that the mistake which occurred in other cases has occurred in this case also. The AO has categorically stated that there was information about the deposit of Rs. 20 lacs in the HDFC Bank Account of the assessee and the AR has not been able to explain the source of the same. In the absence of the justification, the cash deposit remains unexplained, to be treated as income of the assessee. Under the facts & circumstances of the case, the addition made by the AO is confirmed. Accordingly, this ground of appeal is dismissed." 10. The assessee also raised another ground before the ld. CIT(A) which read as under: "The learned assessing officer is not justified in treating the bank deposit as income of assessee as the deposit was made out of the sale proceeds of agricultural land." 11. The aforesaid ground was rejected by the ld. CIT(A) by observing that no arguments had been put forward by the assessee. Now the assessee is in ....
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....ted cash amounting to 3.00 Lakhs in my bank account and therefore an addition of Rs. 20.00 lakhs was made in my case. The reliance is also placed on jurisdictional Punjab & Haryana High Court in case of Land Acquisition Collector Vs Addl. CIT Jalandhar, Income Tax Appeal no 54 of 2010 date of order dated 29-07-2016. The Hon'ble High Court in para 17 held that the decision of rejecting the application for admission of additional evidence in form of revenue record is incorrect & cased on incorrect finding of law & of fact. We also submit that the Chandigarh ITAT has given series of judgments for admission of additional evidence as additional evidence goes to the root of case & in the interest of justice and therefore it should be admitted. In view of above I submit that there was reasonable & sufficient cause for not submitting the documents during the course of assessment proceedings. The reliance is placed on the jurisdictional Punjab & Haryana High Court judgment in case of CIT vs. Mukta Metal Works, 336 ITR 555 (P&H). In view of above I request your honour to please admit the additional evidence give me the relief as per the Act. Thanking you, Yours faithfully, ....