TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 910
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....s return of income for the Assessment Year 2011-12. Further, notice u/s 142(1) of the Act was issued and asked the assessee to file return of income, basic details like bank statement, P & L Account, Balance Sheet etc. Subsequently, the AR of the assessee attended in response to notice issued on 29/10/2018 and again he was asked to file the basic details. The assessee has filed part details vide letter dated 14/11/2018 along with a copy of ITR and declared net taxable income of Rs. 1,55,680/-. The Assessing Officer observed that the ITR filed by the assessee was not e-verified, therefore, assessee was asked to e-verify the same and file the balance documents. On 15/11/2018 after several notices, assessee had finally e-verified the ITR on 20/12/2018. Subsequently, notice u/s 143(2) was issued on the same date for fixing the hearing on 21/12/2018. Since, none appeared on behalf of the assessee, the Assessing Officer proceeded to complete the assessment based on the material available on record. The Assessing Officer made the following observations from the information submitted by the assessee. For the sake of clarity the same is reproduced below. "During the year F.Y. 2010-11, he ....
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....g to purchase of the property were filed Only a Agreement to Sell dated 07 06 2010 was filed Hence the capital gain of the property neither verifiable nor computable. * As per ITR filed by the assessee on 15. 11. 2018 which was e-verified at very later stage ie on 20 12.2018, there was no sale/purchase of any property All Column/Schedules pertaining to Long Term and Short Term Capital gain has been left blank. Thus, the value of such transaction has been taken at Nil only. * The filing of details was dragged to last point of time leaving no space for examining and cross examining of the documents Further, the assessee chose not to respond on last two occasions provided by way of hearing on 20.12.2018 and 21.12.2018. 7. In view of the reasons above, the Exemption claimed u/s 54F of the Income Tax Act. 1961 is not allowable. Therefore, this amount i.e. Rs. 40,96.805/- which is the almost the same amount which remains unexplained and is thus it is disallowed and added back to the income of the assessee The assessee made cash credits amounting to Rs 42,85,000/- and filed income tax return declaring Gross Taxable Income of Rs. 2,15,684/- (which included only interest income and in....
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....ment whereas Appellant need not submit any return u/s. 139 of 1. T. Act, 1961 having either below taxable income or exempt income u/s 10 as agricultural income under same Act. 3. On Facts & circumstances in law, Ld.CIT(A) has erred by exceeding jurisdiction while enhancing the addition from Rs. 4096805/- to Rs 4285000/- and changing under section from 68 to 69A of Income Tax Act, 1961 in contrary to provision of section 251(2) of such Act. 4. On Facts & circumstances in Law. Ld CIT(A) has erred in confirming addition of Rs. 4285000/- arbitrarily without appreciating facts of exempt & below taxable Income stated in Return submitted u/s. 148 of IT Act and without considering that Appellant is essentially from Agricultural profession. 5. On Facts & circumstances in Law, Ld CIT(A) has erred in confirming addition of entire deposits in Bank of Rs. 4285000/- arbitrarily without appreciating facts of sale proceeds of transaction due to agricultural land sale which would result to only profits or capital gain for taxability but not entire sale proceeds. 6. Appellant craves the right to add, delete, amend any of the grounds of appeal either before or at the time of hearing of appeal....
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.....У.2011-12. Although said fact was existing in F.Y 2010-11 by in itself, Yet Ld A.O. skipped to act under s. 142(1) or u/s 143(3) r.w.s 144 (Regular assessment). Ld A.O. waited till end exceeding 4 years to reopen the case u/s. 147 r.w.s 148 of I. T. Act 1961 as Income escaping assessment category for which action being unfair & arbitrary in Law, So Proceeding u/s. 148 r.w.s 147 needs to be quashed being devoid of merit. It may be noted here that Appellant genuinely believing the Income as below taxable or exempt income u/s 10 of I T Act, 1961 not included in total income as per provision section 139(1) would have filed same below taxable Return then u/s 142(1) on or before 31/03/2013 for A.Y. 2011-12 same as below taxable Return under section 148 for said A.Y. Moreover, Ld. A.O. in his Reason to Believe while proposing to issue Notice u/s. 148, has not mentioned about any sanction/approval from PCIT u/s. 151(1) in the Reason to Believe itself which is not correct legal procedure as per provisions of s. 147 r.w.s 148 r.w.s 151(1) of I.T Act 1961. Moreover, Ld JCIT who is not authorized under Law of provisions of section 147 r.w.s 148 r.w.s 151(1) to express her Satisfaction o....
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....mmissioner also acted on the same basis by mechanically giving his approval. Therefore, the proceedings under section 148 were to be quashed. F) Deith ITAT in case of ACIT vs. Mis. Pankaj Gas Cylinders Ltd. ITA No 5273/dell 2013dated 3rd May 2016 has held that the AD has not inhaled his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year, hence the order deserves to be quashed. 2. Without prejudice to above argument(s) despite the facts of (1) deposit in Barik account existing in F.Y. 2010-11 itself exceeding taxable limit but no Retum has been submitted by Appellant & (i) Ld. A.O. failed to issue/serve any Notice uls.142(1) or making any assessment u/s 143(3) r.w.s 144 of LT Act 1961, But Ld. A.O. waited beyond 4 years from end of A.Y.2011-12 to invoke proceeding u/s. 148 r.w.s 147 only for routine inquiry, He(Ld A.O.) did not appreciate the correct legal procedures for which act being arbitrary & unfair, Proceeding uls. 148 r.w.s 147 needs to be quashed being devoid of merit. Relevant case law(s) relied on: A.) Hon'ble Gujarat High Court in Hotel Oasis (Surat) (P) LTD. v. DCIT (2011) 57 DTR (Guj) 378, has....
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....rejudice to above argument(s), It may be noted here that once Ld.A.O. has accepted Returned exempt Income from agricultural produce of Rs 64000/- & Part of exempt Income(from sale of agricultural land) of Rs. 353195/-, the addition of balance exempt Income of Rs. 4096805/- as unexplained cash credits u/s 68 is not only illegal but also without any merit as provision of section 68 is not applicable to deposits in Bank account & Appellant is not maintaining any books of accounts(being No account case) as Ld.CIT(A) has quoted same in his appeal order & also simultaneously Ld.A.O cannot play hot & cold both at same time partly accepting exempt income & partly making addition on exempt income. Therefore proceeding u/s. 148 r.ws 147 needs to be quashed being devoid of merit 5. Without prejudice to above argument(s), It may be noted here that Ld CIT(A) has acted in an arbitrary manner while deciding first Appeal of Appellant as he has failed to issue any SCN(show cause Notice) u/s 251(2) r.w.s 251(1) of IT Act 1961 while Ld.CIT(A) not only changed addition source head income from section 68 to section 69A but also enhanced addition from Rs. 4096805/- done by Ld A.O. to Rs. 4285000/- Inter....
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....ome Tax. Therefore, the initiation of proceedings u/s 147 was proper and he relied on the findings of lower authorities. 10. In the rejoinder, the Ld. AR submitted that no doubt PCIT has approved the same, however, mechanically without applying his mind, with regard to non-filing of the return of income, he submitted that the assessee has sold the agricultural land and with the reasonable proof that the sale of agricultural land is exempt from tax. 11. Considered the rival submissions and material placed on record. It is fact on record that the assessee has sold agricultural land and believed that this sale is not taxable. It is also fact on record that the assessee has not filed any return of income believing that his income is exempt from tax. Since the assessing officer came to know about the huge cash deposit in assessee's bank account and capital transaction, he has sought approval to reopen the case even though beyond 4 years. It is noticed from the record that the AO has taken proper approval and the same was approved by the proper authority. Now the assessee has raised several arguments including the approval process. We are not inclined to accept any of the argument put ....