TaxTMI 
TaxTMI 
2022 (8) TMI 940
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....sis and is bad-in-law." FACTS OF THE CASE 3. Facts giving rise to the present appeal are that the Assessing Officer ("AO") was in possession of information regarding deposits of cash amounting to Rs.16,18,605/- in the Saving Bank Account of the assessee held with State Bank of India, Mahilpur, Distt.-Hoshiarpur. The AO issued a letter dated 06.12.2017 calling upon the assessee to explain the source of cash deposits made in his bank account. However, no requisite explanation or reply was filed on behalf of the assessee. Therefore, the AO re-opened the assessment and issued a notice to the assessee u/s 148 of the Income Tax Act, 1961 ("the Act"). It was noticed that the assessee did not co-operate in the assessment proceedings despite having been given various opportunities of hearing to the assessee. The AO on the basis that the assessee failed to substantiate the source of cash deposits amounting to Rs.16,18,605/- in the Saving Bank Account, made addition in his income thereby, he assessed income at Rs.17,84,370/- against the income disclosed as per income tax return dated 14.12.2018 of Rs.1,65,760/-. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A....
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....hich is not enough for issuance of notice u/s 148. 6. a) It is pertinent to mention that the total cash deposit during the year is rs.1573500, whereas following are the entries not related to cash deposit as the assessee went to ATM to withdraw the money and he could not withdraw the same due to some technical issue of ATM machine. Hence it is clearly written in bank statement that - ATM withdrawal and reverse ATM withdrawal. Meaning thereby there is neither cash deposit nor cash withdrawal. b) Following are some of the entries which have also been included as cash deposit to derive the figure of Rs. 1618605 and it is clear cut case of non-application of mind by AO, while recording the reasons u/s 148 ,as per the following table:- Table Sr.No. Date ATM withdrawal Reversal ATM withdrawal Enclosed at page no. 1 18-05-2010 10000 10000 53 2 18-05-2010 5000 5000 53 3 30-08-2010 15000 15000 64 4 09.10.2010 10000 10000 67 Total 40000 40000 b) No addition can be made on Rs. 40000-/-, which are just reversal of entries. c) So much so The Ld. A.O even....
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....page 117 to 124) Ground No. 2 1. That the sanction of PCIT, Jalandhar for reopening the case is mechanical in nature being he has not scrutinized the reasons so recorded by A.O before the sanction. The A.O has written two different figures of cash deposit in the reasons so recorded. At Point 2, he is writing figure of Rs. 1548500 and in Para 3, he is writing a figure of Rs. 1618605. AND Ld. PCIT-1 has not categorily mentioned in a satisfaction note that how he had made his satisfaction regarding the two figures of cash deposits and how they are relevant with each other. What information and document he has examined for his satisfaction and sanction to AO. The sanction of PCIT-1, Jalandhar is mechanical in nature. 2. Even PCIT has not put date while signing the sanction and the sanction is undated and invalid. Following are the case laws in support of the above Sanction should not be mechanical:- 1) Approval given by PCIT-1, Jalandhar at page and note is as under, which is bad-in-law, as per the following case law:- "I am satisfied with the reasons recorded by A.O that this is a fit case for issue of notice u/s 148 of Income Tax ....
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....ices, the assessee did not give any explanation regarding deposits of cash prior to issuance of notices u/s 148 of the Act. Therefore, the AO had reason to form belief that the cash deposited and presented the income escaped assessment. Therefore, Ground Nos. 1 & 2 raised by the assessee in this appeal are devoid of any merit, the same are therefore, dismissed. 10. Ground No.3 raised by the assessee is against sustaining 50% of addition on estimate basis. 11. Ld. Counsel for the assessee vehemently argued that there was no justification in treating the cash deposited in Saving Bank Account of the assessee as unexplained. He further re-iterated the submissions as made in the written submissions. For the sake of clarity, the relevant contents of the written submissions are reproduced as under:- "The Ld. CIT(A) has suo-moto estimated and restricted the addition of Rs. 1618605 to Rs. 809303 i.e; @50%, without mentioning any reason. It means he accepted the amount of Rs. 1618605-/-, as cash deposit. Whereas Rs.40000-/- are reversal entries. Rs. 5000-/- is transfer and Rs. 105 is interest income. He made addition @ 50% on all the above items and has not applied his mind. ....
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....elow. 13. I have heard the contentions of Ld. Authorized representatives of the parties and perused the material available on record and gone through the orders of the authorities below. The Ld.CIT(A) has decided the issue by observing as under:- 4.3. "I have carefully considered the facts of the case and submissions of the appellant. The Ld. counsel has stated that presently the assessee is working as an employee with M/s Khurana furniture and is a person of no means. From the bank statement submitted by the assessee, it is apparent that the assessee has made deposits and withdrawals of cash from time to time. The assessee has taken the plea that transactions of deposits and withdrawals were repeated for the purposes of showing higher with for visa purposes. But, no such evidence has been brought on record. The assessee has been making ATM withdrawals of smaller amounts, Some part of the withdrawals would have been used for the activates being done by the assessee and for personal purposes. The assessee has not brought on record any facts in this regard. In the circumstance, considering that part of the withdrawals were for personal purposes and for the activities bein....