TaxTMI 
TaxTMI 
2023 (8) TMI 1106
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....the Income Tax Act, is bad in law as the same has been disposed off without examining the merits of the case and is against the principles of natural justice. 3. That the CIT(A) has erred in making addition of opening cash balance arbitrarily and without assigning any cogent reason and without bringing any evidence on record treated the opening balance of Rs. 13,82,815/- as on 01.04.2011 of cash in hand to be that of unexplained cash credits u/s. 68. 4. That the CIT(A) has erred in confirming the addition made by the AO ignoring the fact, that the assessee being an agriculturist and not having any business income is not bound to maintain books of accounts. 5. For that and under the facts and circumstances of the case and in law, CIT(A) erroneously passed order as failed to consider the issues whether the "Reason recorded to believe escapement of income and said Copy of Reasons recorded "was duly served on the assessee is the precondition before initiation of proceedings and issuing notice u/s 147 and 148 of the IT Act 1961 is a grave question of fact as well as law, accordingly the action taken as well as order passed over looking that matter is liable to....
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....the details and documents before the assessing officer. 6. During the course of assessment proceedings, on perusal of records, it was noticed by the assessing officer that in the cash-Book furnished for financial year (F.Y.) 2011-12, the assessee has shown opening cash balance of Rs. 18,82,815/-. However, it was noticed by assessing officer that assessee has not filed any return of income up to assessment year (A.Y.) 2011-12). Further, assessee has not furnished any documentary evidences to justify the opening cash balance. It was further noticed from the ITS data that assessee has received Rs. 17,990/- as interest on fixed deposits from Bank of Baroda during the year but has not offered the same for taxation in the return of income filed. Therefore, a show cause notice was issued on 03.12.2019 to the assessee, which is reproduced below: "Please refer to the ongoing assessment proceedings in your case for A. Y. 2012-13. 2. During the course of assessment proceedings, on perusal of the records it is noticed that in cash-book furnished for F.Y. 2011-12, you have shown opening cash balance of Rs. 18,82,815/-. However, you have not filed any return of income upto A....
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.... The elder sister Mrs. Champaben Babubhai Gadhiya has gifted amount Rs. 2,00,000/- in the year 2005-06 (gift deed dated 30-03-2006) out of his accumulated savings and the elder brother of assessee Mr. Ganeshbhai Raghavbhai Beladiya has gifted a sum of Rs. 5,51,000/- in the year 2008-09 (gift deed dated 01-09-2008) out of his savings. The elder brother Mr. Gmeshbai has no child and hence he gifted all the accumulated savings to his brother Mr Mohanbhai (assessee) and the death certificate along with 7/12 is attached herewith. Hence, the assessee is engaged agriculture cultivation activity since last 51 years and the opening balance of cash is accumulated savings of the assessee from agriculture income and gift received from his brother & his sister and agriculture income was exempt from tax and so the income tax return was not been filed by assessee. So we hope that information and explanation provided herein above shall meet your requirements. However, if you require any further information or explanation in this behalf, we shall be pleased to provide the same on hearing from your end. Interest Income of Rs. 17,990/-: We here by inform t....
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....ding agricultural land and doing agricultural activities does not automatically endorse the huge cash on hand of Rs. 5,51,000/-. Further, bank account statement or copy of ROI filed by Ganeshbhai has not been furnished. Therefore, creditworthiness of the donor is not proved. In view of the above, claim of gifts received in cash was accepted by the assessing officer. 11. In respect of investments made in cash during last 10 years by the assessee, the assessing officer observed that assessee has purchased lands at Gothan in FY 2006-07 & 2007-08 for investment of Rs. 1,72,000/-. It was further observed by the assessing officer that assesses has purchased diamonds worth Rs. 3,50,000/- in FY 2004-05 and Rs. 3,75,000/- in FY 2007-08. Thus, assessee himself has bought the investment made in cash of Rs. 9,00,000/- in last 8 years on records. 12. In view of the above facts, the assessing officer held that agricultural income, and claim of gifts were bogus therefore not accepted by the assessing officer. Considering the fact that investments made of by assessee to the tune of Rs. 9,00,000/- in cash in last 8 years, the assessing officer accepted Rs. 5,00,000/-, as opening cash in hand ....
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....atically endorse the huge cash on hand of Rs. 5,51,000/-. Further, bank account statement or copy of ROI filed by Ganesh bhai has not been furnished. Further, regarding the gift deed of his daughter (Rs.2,00,000/- dated 30.03.2006. Further, bank account statement or copy of ROI filed by Mrs. Champaben Babubhai Gadhiya has not been furnished. Further, in the gift-deed itself, it is written that Champaben has given the gift from her savings from the 'Majuri karri' i.e. labour work. Therefore, creditworthiness of both the donors is not proved. In view of the above, the ld CIT(A) confirmed the addition made by the Assessing Officer. 14. Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before us. 15. Ms Anchal Poddar, Learned Counsel for the assessee, stated that assessee has raised additional grounds of appeal, stating that notice under section 143(2) has not been issued on the assessee, during the assessment proceedings, therefore the entire assessment proceedings are invalid and hence assessment order itself may be quashed. For that Learned Counsel relied on the judgment of Hon'ble Supreme Court in the case of ACIT vs. M/s. Hotel Blue Moon....
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....er to Rs. 2,00,000/-. Normally the father gives gift to his daughter and it is a reverse situation, besides the gift received from brother at Rs. 5,51,000/- is also in the same nature and these gifts are kind of a bogus gifts to defraud the revenue. 19. About additional ground raised by the assessee, ld DR pleaded that it should not be admitted. The assessee has raised the additional ground of appeal stating "that notice under section 143(2) of the Act, has not been issued during the assessment proceedings" and ld DR stated that it should not be admitted, as the assessee has not raised this ground before the lower authorities (AO and CIT). The Ld. Sr. DR for the Revenue invited our attention towards section 292BB of the Act and stated that assessee has participated in the assessment proceedings, therefore this additional ground cannot be adjudicated at this stage. 20. I have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. I note that assessee has ....
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....ng notice u/s 143(2) of the Act. I note that for completing the assessment under section 148 of the Act, compliance with the procedure of issue of notice under Section 143 (2) was mandatory. It has been contended by ld DR that assessee attended the assessment proceedings regularly and never objected regarding issue and service of notice u/s143(2) so the default can be treated as procedural irregularity u/s 292BB of the Act. As per the provision of section 292BB where an assessee had appeared in any proceedings or cooperated in any enquiry relating to an assessment or re-assessment, it shall be deemed that any notice under any provision of this Act which is required to be served upon him, has been duly served upon him in time in accordance with the provision of this Act. The provision of section 292BB clearly laid down the circumstances/conditions under which the deeming fiction has to come into force. These conditions have been stated to be as (a), (b) and (c) which talks about the situation where: (a) notice was not served upon the assessee, (b) not served upon him in time, and (c) served upon him in an improper manner respectively. Therefore, section 292BB talks about only the si....