TaxTMI 
TaxTMI 
2024 (10) TMI 75
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....is that the entire proceeding is illegal in the eyes of law for not informing about the transfer of case from one jurisdiction to another jurisdiction as per section 127 of the Income Tax Act, 1961 ["Act" in short]. The ld. AR drew our attention to the written submissions in this regard. The written submissions filed by the ld. AR are reproduced herein below for ready reference: I. The Transfer of case of the appellant was not in accordance with section 127 of the Income Tax Act, 1961: 1. The first notice u/s. 143(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 03/09/2015 (Page 1 of Additional Paper book) is issued by the Income Tax Officer, Business Range II(4) Thereafter, a subsequent notice u/s. 143(2) r.w.s 129 of the Act dated 07/10/2015 (Page 2 of Additional Paper book) and all further communications thereafter have been issued by Deputy Commissioner of Income Tax, Non Corporate Circle - 2. Therefore, the inference is that the case has been transferred from the Jurisdiction of Income Tax Office Business Range II(4) to the Jurisdiction of Deputy Commissioner Income Tax, Non Corporate Circle -2. 2. As per section 127 of the Income Tax Act, 1961....
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....e is transferred from the usual place of residence or office where ordinarily assessments are made to a distant area, a great deal of inconvenience and even monetary loss is involved. That is the reason why before making an order of transfer the legislature has ordinarily imposed the requirement of a show-cause notice and also recording of reasons. The question then arises whether the reasons are at all required to be communicated to the assessee. It is submitted, on behalf of the Revenue, that the very fact that reasons are recorded in the file, although these are not communicated to the assessee, fully meets the requirement of Section 127 (1). We are unable to accept this submission. 11. We are clearly of opinion that the requirement of recording reasons under Section 127(1) is a mandatory direction under the law and non-communication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee." Therefore, since no order u/s. 127 of the Act was passed and since the reasons recorded in writing for the transfer of the case was not communicated to the appellant, the entire proceedings are in violation of section 127 as well as aga....
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....all be served on the assessee after the expiry of "six months" from the end of the financial year in which the return is furnished. The appellant filed his return of income on 23/07/2013. The time limit to serve a notice u/s. 143(2) is within "six months" from the end of the financial year 2013-14.i.e on or before 30/09/2014. However, the notice u/s. 143(2) r.w.s.129 of the Act was issued on 07/10/2015. Therefore, the notice u/s. 143(2) r.w.s 129 is time barred and Deputy Commissioner of Income Tax, Non Corporate Circle -2 does not have jurisdiction over the appellant. 7. The ld. DR vehemently opposed the submissions of the ld. AR and submits that the notice issued by the Assessing Officer is not barred by limitation, is within limitation. 8. We note that the assessee filed revised return of income on 05.03.2014 and the time limit available for the Assessing Officer to issue notice under section 143(2) of the Act is within 6 months from the end of the financial year 2013-14 i.e., 30.09.2014. On perusal of the assessment order, we note that the notice under section 143(2) of the Act dated 03.09.2014, at page No. 1 of paper book, was issued and served on the assessee which, clearly....
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....gra Bench in the case of DCIT v. Ramesh Chand Jain [2007] 108 ITD 446 (Agra)) (Page 21 of Additional Paper book) wherein the Hon'ble tribunal has held that the assessing office is duty bound to inform about the change in incumbent of an office u/s. 129. The relevant portion of the decision is extracted hereunder: "12. In the case of Jagdish Prasad Chaudhary (supra), the Hon'ble Patna High Court had an occasion to examine the provisions of section 39 of Wealth-tax Act. Section 39 of the Wealth- tax Act deals with the effect of the transfer of authorities during the pendency of the proceedings. The proviso to section 39 gives a right to assessee to demand that before the proceedings are continued by the succeeding officer, the previous proceedings or part thereof, may be reopened or that before any order is passed against him, he may be re-heard. This condition implies and postulates that before the assessee can demand the right given to him under the said proviso, he must necessarily have a right to be put on notice of two facts, namely, (a) that the previous authority who was so long continuing the proceeding has been succeeded by another officer; and (b) that the officer....
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....n that the succeeding authority intends to continue the proceeding from the stage at which it was left by his predecessor is illegal and unreasonable. The relevant portion of the judgement is extracted hereunder: "9. In this batch of cases, it cannot be denied that the succeeding assessing authority did not intimate to the assessee his intention to continue the proceeding from the stage at which it was left by his predecessor. There is no plea or proof in this case that the assessee was aware that the assessing authority had been succeeded by another and that the successor proposed to pass the penalty order. In these circumstances, we are of the view that the AAC was justified in holding that the successor- assessing authority had acted illegally and unreasonably in imposing the penalties without intimating to the assessee his intention to continue the proceedings from the stage at which it was left by his predecessor. There has been a breach of the valuable rights of the assessee, specified in section 274(1) read with section 129. The AAC was justified in cancelling the penalties and the Tribunal was justified in confirming the said cancellation orders. We hold that the Tribunal....
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....return of income and argued that the Assessing Officer conducted the assessment proceedings based on the revised return of income as filed by the assessee. No ground whatsoever raised before the ld. CIT(A) and drew attention to the ld. CIT(A)'s order. He vehemently argued that the revised return is a valid return. 16. Having heard both the parties, we notice that the Assessing Officer issued notice under section 143(2) of the Act dated 03.09.2014 in response to the revised return which was served on the assessee on 08.09.2014, whereas, another notice under section 143(2) r.w.s. 129 of the Act dated 07.10.2015 is also issued to the assessee, which was received on 12.10.2015. The assessee appeared before the assessment proceedings by filing relevant evidence, which is evident from para 2 of the assessment order. On perusal of the impugned order at page 2, we note that the ld. CIT(A) reproduced grounds of appeal, wherein, we find no mention of challenge to the validity of revised return of income. We find two paper books filed by the assessee before us, one is consisting of 52 pages and another of 78 pages, wherein, we find written submissions filed on 24.12.2018 before the ld. CIT(A....
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....2 at Rs..51,22,635/-. The ld. CIT(A), by placing reliance on the decision of this Tribunal in assessee's own case for AYs 2008-09 to 2012-13 confirmed the order of the Assessing Officer in making the addition. 19. The ld. AR submits that the assessee's mother lent money to various persons through Axis Bank account and some were repaid in cash. The assessee filed return of income by admitting the said transactions from assessment years 2008-09 to 2012-13. The ld. AR drew our attention to the decision of the Hon'ble Supreme Court in the case of DSP, Chennai v. K. Inbasagaran, reported as (2006) 1 SCC 420 and argued that the money found in joint possession cannot be saddled in the hands of one of the joint holders in the absence of any evidence. He argued vehemently that the transaction of monies by assessee's mother cannot be made in the hands of the assessee as he is a joint holder. 20. The ld. DR relied on the order of the ld. CIT(A). 21. Heard both the parties and perused the material available on record. On perusal of the impugned order at page 3, wherein, the ld. CIT(A) reproduced the discussion made by the ITAT in assessee's own case for AY 2008-09 to 2012-13, wherein, it is....
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.... to the assessee. The AO was not satisfied with the explanation offered by the assessee that repayments in some of the cases are received in cash. The amounts were lent by way of cheque from axis bank account, which clearly establishes the identity of the payee. 10.4 The AO had stated that amount lent to persons by way of cheques were received in modes of cash is not acceptable by citing the example of transactions where amount lent by way of cheques were received back through mode of cheque. This reasoning lacks logic. 10.5 The AO had alleged that receiving back in cash of loans lent by cheques is against the principle of human probabilities, which is wholly baseless. The AO had alleged that most of the debtors are business men which is a presumption and not supported by materials on record. The AO had alleged that repayments were received through banking channel in subsequent year, which is not supported by any material on record. 10.6 Based on the above alleged assumptions, the AO had redrawn the cash book of the assessee by excluding cash repayments received from some of the parties. The peak deficit balance, that appeared on 19.2.2008 at Rs. 52,405/- was added to the tax....
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.... for a moment, parties to whom monies were lent had not repaid in cash, then all such loans should be treated as bad debts as the same were not realized till date. 11.7 The exercise of redrawing cash book was carried out to verify source of cash deposits in the Axis bank account held by the assessee's mother. The peak balance in that bank account for each of the asst. years is as below : 2008-09 Rs. 1,20,07,202 2009-10 Rs. 1,47,45,486 2010-11 Rs. 92,00,767 2011-12 Rs. 1,10,11,782 2012-13 Rs. 1,64,28,318 11.8 According to ld. A.R, If peak credit is worked out on the basis of that axis bank statement, the maximum addition for all the years taken together would be Rs. 1,64,28,318/- as this is the peak balance across all the years. Whereas, the assessee had offered additional income as below: 2008-09 Rs. 1,27,61,144 2009-10 Rs. 14,54,486 2010-11 Rs. 15,49,289 2011-12 Rs. 16,49,056 2012-13 Rs. 18,59,653 Total Rs. 1,92,73,628 11.9 Considering the above, he submitted that there cannot be any additions on the basis of peak cash deficit in the cash balance. Therefore, it is prayed that the peak cash deficit additions be deleted. 11.10 For A.Y. 20....
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....ee offers no explanation or where the explanation offered by him is not satisfactory in the Assessing Officer's opinion, the value of the unexplained investment would be treated as the income of the financial year in question. In the case of Jatindra Nath Sarmah vs. ITO (1978) 113 ITR 898 (Gau), the Gauhati High Court observed that where the explanations furnished by the assessee were not fully relied upon by the Department, it cannot be said that the Department had any further burden to prove that this was an income of the assessee. 12.1 In the case of Raghbir Singh vs. ITAT & Ors. (2007) 209 CTR (P&H) 394 assessee failed to establish the capacity of NRI donor to make gift of huge amount or the source from which gift was made and hence addition of amount as deemed income of assessee was held justified. 12.2 In the case of Rahmat Development & Engg. Corpn. vs. CIT (1981) 130 ITR 602 (Cal), the Calcutta High Court opined that "unless the assessee had given the source of investment of this additional amount, whatever be the amount, that must have come from some source of income of the assessee." 12.3 However, without reference to any supporting evidence or material, the ITO....
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....able to explain the deposits made into Axis Bank A/c Adyar branch, Chennai. The assessee was not able to discharge the burden to prove that the sources were disclosed income of the assessee. In the absence of satisfactory explanation, the Assessing Officer was compelled to arrive at the un-explained cash by calculating the peak value of deficit cash balance in the books of the assessee in each assessment year. As a result, the Assessing Officer computed the unexplained income by redrawing the cash book and considered the peak value of the credit which is arrived after due credit for the amount of cash withdrawn from the bank. We do not find any infirmity in the method followed by the lower authorities in computing the unexplained investments in these A.Ys. The same is confirmed. This ground in all these appeals is dismissed. 22. We note that the Tribunal in assessee's own case for AY 2008-09 to 2012-13 held that no explanation was offered by the assessee, failed to discharge the burden to prove the source of income of the assessee and confirmed the order of the Assessing Officer in computing the unexplained income by redrawing the cash book and peak value of the credit, which was ....
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....sides and perused the material available on record. The ld. AR vehemently argued taking into account the decision of the Hon'ble High Court of Delhi in the case of PCIT v. Forum Sales (P.) Ltd. (supra) and the order of the Delhi Bench in the case of Shivam Industries (supra) and argued that the addition made by the Assessing Officer is not maintainable as the books of assessee were not rejected. We note that the Assessing Officer can make an assessment in the manner provided under section 144 of the Act if he is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) of section 145 of the Act has not been regularly followed by the assessee, wherein, in the present case, with the information under AIR regarding credit card payments and as there was no evidence furnished to substantiate the said payment, the Assessing Officer proceeded to add the said amount to the total income of the assessee. Therefore, the facts and circumstances of the case before the Hon'ble High Court of Delhi, in the case of Forum Sales (P.) Ltd. (supra), is not similar to the facts on hand and it is not applicable. Furt....