TaxTMI 
TaxTMI 
2024 (7) TMI 583
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....ime found on portal on 22/02/2024 and this is the date of service. 4. The assessee prays to allow to add, amend, or alter grounds of appeal at the time of hearing." 2. Shri R.B Doshi, Ld. Authorized Representative (for short 'AR') at the threshold of hearing submitted that the appeal is time-barred by 37 days. Elaborating on the reasons leading to the delay, the Ld. AR had drawn my attention to an application dated 09.04.2024 seeking condonation of delay a/w. an affidavit of the assessee dated 10.04.2024. It was submitted by the Ld. AR, viz. (i) that all the communications regarding income tax matter were sent to the e-mail address "[email protected]"; (ii) that when a show cause notice u/s.271AAC(1) of the Act was received from email address "donotreply @incometax.gov.in", the assessee remained under a bonafide belief that no further action was required from her side against those emails as "do not reply" was mentioned in the sender's email address; (iii) the assessee being a septuagenarian was not computer savvy and her email account was created by an acquaintance; (iv) that the assessee had forgotten the password of her email address; (v) the asse....
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....ile. The assessee has been staying alone since last 20 years and her email account was created by an acquaintance and logged into it through the mope from which the assessee does not log out. This is for the reason that except for viewing the emails, the assessee is not in a position to do much in her email id. She even does not remember password of her email id and since the email account is never logged out from the mobile, the email id was being accessed. The assessee's husband expired in the year 1997 and thereafter in the year 2002 & 2003, five of her close relatives expired. Thereafter, she was survived by only a daughter, who was also married. Because of these reasons, the assessee, presently of 76 years of age, resides alone since last more than 20 years. Because of advanced age, loneliness, helplessness and circumstances through which she has passed in the last few years, the assessee always felt insecure and is not able to maintain proper frame of mind also. For all the to compliances, she totally depended on her counsel who has been assisting her since a very very long time. Under the above circumstances, due to confusion and the assessee never havi....
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....ector, Land Acquisition vs. Mst. Katiji and Others (1987) 167 ITR 471 (SC): - "The legislature has conferred the power to condone delay in order to enable the courts to do substantial justice to parties by disposing of matter on merits. The expression "sufficient cause" is adequately elastic to enable the courts to apply the law in a meaningful manner which sub-serves the ends of justice-that being the life-purpose of the existence of the institution of courts. A justifiably liberal approach has to be adopted on principal. Such liberal approach is adopted because ordinarily litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in meritorious matter being thrown out at very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. When substantial justice and technological consideration are pitted against each other, the cause of substantial justice deserves to be preferred. There is no presumption that delay is deliberate." The above case has been followed/ referred in a number of decisions of ....
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....) of the Act asked the assessee to furnish the reason for huge cash withdrawals from her bank during the year but she had failed to furnish any reply. The A.O observed that though the assessee had shown cash in hand as of 31.03.2016 at Rs. 18,92,325/- and as of 08.11.2016 at Rs. 22,62,325/-, but no evidence regarding the same was produced before him. As the assessee had failed to explain the source of cash deposits of Rs. 10,00,000/-, the A.O. held the same as her unexplained money u/s.69A of the Act. Accordingly, the A.O. vide his order passed u/s.143(3) of the Act dated 05.12.2019 determined the income of the assessee at Rs. 19,18,850/-. 7. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: "4.1 Ground No. 1 & 3: These grounds relate to the addition u/s. 69A of Rs. 10 lakh made by the AO on account of unexplained cash deposit in bank account during demonetization period. The appellant has derived income from salary and other sources. During the course of assessment proceedings, the appellant explained the source of cash deposit as withdr....
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....d the findings recorded by the Hon'ble ITAT that the assessee has failed to link the cash withdrawn from the bank with cash deposits made in her bank account. Finding strength from the said decision of the Hon'ble Punjab and Haryana High Court, it is clear that the onus lies with the assessee to establish that the cash withdrawn from the bank has been re-deposited which has not been discharged by the appellant. In this regard, the reliance is also placed on the decision of the Hon'ble ITAT Hon'ble ITAT Hyderabad Bench, while dealing the identical issue in the case of Mir Basheeruddin Ali Khan vs Income Tax Officer, Ward-6(3), Hyderabad [2014] 42 taxmann.com 69 has categorically held that the assessee has to demonstrate sufficient reasons to explain as to why such huge cash was kept when the assessee was in possession of bank accounts. The relevant portion of the said decision is reproduced herein as under: "Section 69 of the Income Tax Act, 1961-Unexplained Investments [Cash Deposit) Assessment Year 2005-06- Assessee had made cash deposit of Rs. 6.50 lakh in his saving bank account on 08/09/2004- He submitted that cash deposit was out of amount. withdrawn e....
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.... after considering the same, had rejected the same having lack of merit therein leading to addition thereof in the subject assessment order. The lack of merit travels to the instant appellate proceeding to enable a view, different than that of the AO on these issue. In this circumstance, | find no infirmity in the order of the AO. The decision of the AO is, consequently, upheld. The appeal of the appellant is, therefore, dismissed. The appellant has placed reliance on the decision*of the Hon'ble ITAT in the case of M/s. Hirapanna Jewellers, ITA No. 253/Viz/2020. The said. case law has been considered but the same is found quite distinguishable from the factual matrix of the present case. In the said case, the main question before the Tribunal was whether the cash receipts found during the course of survey action represent sales or not. The Hon'ble ITAT after considering the financial statements held that there was sufficient stock to affect the sales and therefore, the cash receipts found during the course of survey action represent the sale which was already included in its financial statements. Therefore, no further addition is called for on account of such cash receipts....
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....ed rate of 60% and surcharge @ 25% on the 'advance tax'. The learned Single Judge rejected the writ petition by a cryptic judgment relying on Commissioner of Income Tax v. SA Wahab. (1990) 182 /TR 464 (Ker). 2. The learned Counsel Sri Vishnu S Arikkattil appearing for the appellant would contend that even going by the decision in Karimtharuvi Tea Estate ltd. v. State of Kerala (AIR (1966) SC 1385), an amendment, made on the 1st day of April of any financial year, would apply to the assessments of that year. That is, if an amendment is brought into force on 01.04.2017, as is the case here, it can only apply to the assessment made in 2018- 2019 (Assessment Year) of the income accrued for the previous financial year; which is 2017-2018. The learned Counsel would seek to draw a distinction insofar as a modification of the rate as brought out in the Finance Act and a substantive provision altering accrued rights or creating new liabilities, on the 1st of April of a year. In the former, it could apply to the assessments of the previous year, made in that financial year, but a substantive amendment not relating to the rates, could only be applied to the assessments of tha....
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....a 2016 brought in under Chapter IX A of the 2nd amendment Act. The 2nd amendment Act as is clear from the Statements of Objects and Reasons, was to curb, evasion of tax and black money as also plug loopholes in the IT Act and to ensure that defaulting assessee are subjected to higher tax and stringent penalty provision. Both the measures spoken of herein were to further the said objects and there cannot be any nexus assumed nor is it discernible. 13. Section 115BBE was inserted by Finance Act 2012 w.e.f. 01.04.2013. As on 01.04.2016 the financial year in which the subject seizures occurred Section 155BBE provided for 30% 68, 69, 69B, 69C and 69D. The same was amended by the 2nd Amendment, w.e.f. 01.04.2017, enhancing the rate to 60%. Hence there was no new liability created and the rate of tax merely stood enhanced which is applicable to the assessments carried on in that year. The enhanced rate applies from the commencement of the assessment year, which relates to the previous financial year. 14. Likewise it was by Chapter II with heading 'Rates of Income Tax, as provided in the Finance Act 2016, that a surcharge was introduced by way of the 3rd proviso of Se....
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....commencement of a year. The said contention, however, cannot be sustained especially looking at the decision of the Hon'ble Supreme Court in CIT Kerala v. K Srinivas. [(1972) 4 SCC 526]. The facts are not relevant to the issue raised here and we need only look at the declaration as to the nature of a surcharge imposed in the Finance Act. The legislative history with respect to the concept of surcharge was traced by the Court, which, for the first time was found to have been recommended, in the report of the Committee on Indian Constitutional Reforms Volume. [Part I]. The word surcharge was used compendiously for the special addition to taxes on income imposed in. September 1931. It was held so in paragraph 7 and 8 7. The above legislative history of the Finance Acts, as also the practice, would appear to indicate that the term "Income tax" as employed in Section 2 includes surcharge as also the special and the additional surcharge whenever provided which are also surcharges within the meaning of Article 271 of the Constitution. The phraseology employed in the Finance Acts of 1940 and 1941 showed that only the rates of income tax and super tax were to be increased by a surcharge for....
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.... income tax computed ... shall be increased by a surcharge. Section 4 of the IT Act squarely applied to the surcharge imposed. The judgement of the Learned Single judge is affirmed for the reasoning herein above and the writ appeal would stand dismissed without any order as to costs." The ground raised by the appellant herein, is, thus, contra, to the decision of the ITAT and the Kerala High Court, and, consequently, dismissed on applicability thereof, to this issue." 8. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal. 9. The assessee has filed an application for admission of additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963. The Ld. AR had drawn my attention to the documents filed before me as additional evidence, which comprises of, viz. (i) a copy of the certificate dated 12.04.2024 issued by the bank; (ii) copies of returns of income of the assessee for the past 5 years; (iii) copies of the acknowledgments of the income-tax returns; and (iv) copy of medical certificates. The Ld. A.R submitted that the aforesaid documents have a strong bearing for adjudication of the issue involved i....
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....n of her husband, and interest income. 14. I find substance in the Ld. AR's claim that it is incomprehensible that the assessee, a septuagenarian, who had been practicing as a gynecologist for the last many decades would have no accumulated savings available with her to source the cash deposits during the year under consideration. My aforesaid conviction is all the more fortified after considering her income-tax returns of recent years, as under Assessment year Total Income (Rs.) 2012-13 10,81,730/- 2013-14 13,14,550/- 2014-15 15,74,140/- 2015-16 15,26,480/- 2016-17 9,23,010/- Apart from that, the assessee's various streams of income during the subject year i.e. salary, rent, pension of her husband, and interest on deposits, considered in the backdrop of her old age and ill health, do not inspire any confidence in the A.O's observation that the cash deposit of Rs. 10 lac in her bank account was sourced from her undisclosed sources. My aforesaid conviction is guided by the principle of preponderance of human probabilities as had been emphasized by the Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT 214 ITR 801 (SC). 15. Also....
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....d his discretion keeping in view the peculiar facts and circumstances of the case. 18. I shall now deal with the explanation of the assessee as regards the "source" of the cash deposit of Rs. 10 lacs made in her bank account during the demonetization period. As observed by me hereinabove, it is the claim of the assessee that the cash deposit in question was sourced from, viz. (i) cash withdrawals from her bank account; and (ii) accumulated cash savings of the past years that were available with her. At the threshold, I may hereinabove observe that the CBDT Instruction No.03/2017 dated 21.02.2017, which is binding on the revenue, had, inter alia, stated that in case of an individual taxpayer above 70 years of age not having any business income, no further verification is required to be made if the total cash deposit during the demonetization period is up to Rs. 5 lacs. It is further stated in the instruction that the source of such amount can be either household savings/savings from past income or amounts claimed to have been received from any of the sources therein mentioned, i.e. exempt income, cash withdrawals from bank, cash received from identifiable persons (with PAN/withou....
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....d 01.04.2016 to 31.12.2016 wherein cash movement inter-se the aforesaid bank accounts is revealed. Although the assessee in her "cash flow statement" had claimed that she had an "opening balance" of cash in hand of Rs. 18.92 lacs (approx.) on 01.04.2016, I am afraid that the same in the absence of any corroborative material cannot be summarily accepted and, thus, had rightly been rejected by the lower authorities. At the same time, I am of a firm conviction, that now when the CBDT Instruction No.03/2017 dated 21.02.2017 in itself provides for a blanket acceptance of cash deposits up to Rs. 5 lac in case of any individual taxpayer above 70 years of age not having any business income, for the reason that the same can safely be held as having been sourced from the said persons household savings/savings from past income, then, it can be concluded that the assessee in the backdrop of substantial income that was returned by her in the preceding years would be having substantially higher accumulated past savings. The Ld. A.R on being queried about the cash deposits of Rs. 10 lacs in the bank account with State Bank of India, Branch: Kutchery, submitted that the assessee due to certain fam....
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....perated her locker with State Bank of India, Branch: Kutchery on 16.11.2016 and on the same day deposited the amount therein kept a/w that as was available with her in the Savings bank account No.10470172333 held with the same bank. The Ld. AR to fortify his aforesaid contention had drawn my attention to the certificate of the Chief Manager, State Bank of India, Branch: Kutchery, dated 12.04.2024 wherein it was certified that the assessee had operated her bank locker no. 305 on 16.11.2016. 20. Considering the aforesaid facts, I find substance in the claim of the assessee that the cash deposit in her bank account during the demonetization period was sourced out of the past accumulated cash savings that were kept by her in the aforementioned bank locker, and also the cash-in-hand available with her out of the cash withdrawals made from her bank accounts during the year under consideration. The fact that the assessee had operated her bank locker no. 305 with State Bank of India, Branch: Kutchery on 16.11.2016 (as certified by the bank), i.e. the date of the subject cash deposit in her bank account further inspires confidence as regards the veracity of her claim that the same was, i....
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....s as regards the cash deposit of Rs. 10 lacs made in her bank account on 16.11.2016, i.e. during the demonetization period could be drawn. 23. I, thus, in terms of my aforesaid observations, not being able to persuade myself to sustain the addition of Rs. 10 lacs made by the A.O. in the hands of the assessee u/s. 69A of the Act, vacate the same. Accordingly, I set aside the order of the CIT(Appeals) and vacate the addition of Rs. 10 lacs made by the A.O. 24. In the result, the appeal of the assessee is allowed in terms of the aforesaid observations. Order pronounced in open court on 08th day of July, 2024. ============= Document 1 To TDS by RKC Raipur To 708 by Almarsingh Rather Shikshan Sansthan To TOS by CBI on FOR int To Income Tax To LIC Premium Ra 8923-9268+7281 To House Rent Deducted from salary by R.K.C To Municipal Tax Dr (Smt.) Kamal Verma. Rajkumar college campus.G.E.Road.Raipur CAPITAL ACCOUNT F.V. 2016-2017 24000.00 46992.00 1844.00 10000.00 25472.00 7200.00 54087.00 By Opening capital as on 31-3-2016 By Income from Salary Recieved from Rajkumar college (Rs. 428000.00 7200.00-435200.00) ....