TaxTMI 
TaxTMI 
2025 (7) TMI 1657
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....ithout approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed. 1.2 The ld. AO has grossly erred in law as well as on the facts of the case order in passing the Ex-party order u/s 144 rws 147 without providing the adequate and reasonable opportunity of being heard to the assessee in gross breach of law and are bad in law, invalid, illegal and on facts of the case, and hence the same may kindly be quashed and the resultant addition may kindly be deleted in full. 2.1 The ld. CIT(A) has grossly erred in law as well as on the facts of the case in passing the Ex-party order without providing the adequate and reasonable opportunity of being heard to the assessee and on wrong stands are in gross breach of law and are bad in law, invalid, illegal and on facts of the case, and hence the same may kindly be quashed and the resultant addition may kindly be deleted in full. 3.1 Rs. 19,81,560/- : The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 19,....
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....as total income for the financial year. No details regarding such huge investment have been declared by the assessee. Further verification reveals that the assessee has declared income of Rs. 2,04,420/- under the head income from business and has claimed deduction of Rs. 19,000/- only u/s 80C of the Act. As such the investment made by the assessee in purchase of aforesaid policies remained unexplained and deserves to be added u/s 69 of the Act. Thus, the case was reopened and notice under section 148 of the IT Act, 1961 was issued on 20.09.2020 and served electronically to the assessee. The assessee filed his return of income for A.Y. 2013-14 in response to this notice on 18.10.2019. A notice under section 143(2) read with section 147 of the IT Act, 1961 was issued and served electronically to the assessee on 23.09.2020 requesting clarification on certain issues which the assessee did not respond. Thereafter notices under section 142(1) of the IT Act, 1961 dated 04.02.2021 and 02.09.2021 were issued along with a detailed questionnaire calling for the requisite documents in respect of source of huge investment in cash amounting to Rs. 19,81,560/-. However, the assessee has not filed....
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....er, which shows how the PR. CIT has acted in very formal way. When we examined of the assessment record, it is gathered that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slips....
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....d and the additions so made liable to be deleted. 2. The ld. AO has not rebutted the affidavit filed by the assessee and the contention made in the letter of affidavit should be accepted as truth unless rebutted. Because these affidavits have not been rebutted by lower authority by bring any contrary evidence or without examining. It is very settled legal position that in the cases where affidavit has been filed yet the contents thereof have not been rebutted by the AO/authority, the facts mentioned therein have to be read as the facts binding upon the Income Tax authorities. Kindly refer Mehta Pareek& Co. 30 ITR 181 (SC), ITO v. Dr. Tejgopal Bhatnagar 20 TW 368 (Jp) Paras Cotton Company vs. CIT (2003) 30 TW 168 (JD)., CIT v/s Lunard Dimond Ltd. 281 ITR 1 (Del). Recently in CIT v/s Bhawani Oil Mills (P) Ltd 239 CTR 445/49 DTR 212(Raj.)- It has been held that contents of affidavit could not be treated as of a lesser importance than the statement given by the creditor before the AO. Recently this Honble ITAT in the case of Narayani Bai Dangi v/s ITO Ward 2(1), Udaipur in ITA No.22/Jodh/2022 dt.13.10.2023 it has been held that we respectfully relied on the order Meht....
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....be noted, however, that beyond these calculations of figures, no further scrutiny was made by the Income-tax Officer or the Appellate Assistant Commissioner of the entries in the cash book of the appellants. The cash book of the appellants was accepted and the entries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party. The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Income-tax Officer, who was present at the hearing of the appeal before the Appellate Assistant Commissioner, considered it necessary to call for them in order to cross-examine them with reference to the statements made by them in their affidavits. Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits. This being the position, the state of affairs, as it obtained on 12th January, 1946, had got to be appreciated, having regard to those entries in the cash books ....
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....tion before the ld. CIT(A), the same deemed to be accepted in absence of any contrary material or in any adverse finding. Further if a appellate authorities has not given any finding on the documents filed before him, then there is no fault of the assessee and a poor assessee should not be suffered for that rather it may be deemed to be accepted by the ld. CIT(A) and the addition should be deleted. 5. Hence in view of the above facts and circumstances and legal position of law the assessment order may kindly be quashed and the addition so made may also kindly be deleted in full and oblige." The assessee has also submitted compilation of Paper Book in support of its case as under :- S.No. Particulars Page No. 1. Copy of Notice u/s 148 dt. 20.09.2019 1 2. Copy of Approval letter of JCIT dt. 01.07.2019 2 3. Copy of reasons recorded u/s 148 3-6 4. Copy of notice u/s 143(2) 7-9 5. Copy of affidavit of the assessee filed to CIT(A) 10-12 6. Copy of balance sheet from AY 2007-08 to 2013-14 13-19 6. On the other hand, the ld. DR supported the orders of the revenue authorities. 7. We have heard rival submissions....
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.... of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore the reopening was not sustainable as per above judicial pronouncements and irregularities noted. There were clear irregularities and violation of the provis....
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....ppeal of the assessee. 8. Once, we quash the proceeding U/s 147 of the Act, therefore, there is no need to adjudicate the other grounds raised in this appeal. On merits : 9. At the very outset, we find from the case file that the assessee in support of his case has filed affidavit duly Notarized by the Notary Public that the assessee belongs to a farmer family and earned income from various types of crops cultivated by him in his agricultural land, with the help of his sons (PB pages 10-12). The assessee also earned income from selling milk, vegetables and doing business of selling shoes etc. in a shop nearby Old Bus Stand, Jhunjhunu for the last couple of years. The assessee also filed the balance sheets from AY 2007-08 to 2013-14 (PB pages 13-19).The affidavit was filed before the ld. CIT(A) and the grievance of the assessee is that the ld. CIT(A) without verifying the truthfulness of the contents of the affidavit, or brining on record any contrary evidence, or making any enquiry or directing the AO to make enquiry in respect of what has been stated in the affidavit, confirmed the addition made by the AO. It is settled legal position that in the cases where affidavit has....
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....its source. The assessee has also filed a family settlement of her wife family vide PB31-32, where she got Rs. 3,61,000/- which is also available with the assessee and the lower authorities has discarded or disbelieved without examining and without bringing any adverse evidence. The assessee has also filed the affidavit of his wife namely Smt. Kanak Lata Chhajed before CIT(A), which is produced before us at page 16-17 of paper book. We note in the affidavit she clearly stated that the bank accounts were jointly owned and she had deposited the cash of Rs. 15,59,000/- in these bank accounts, this affidavit has also been remained uncontroverted. It is settled law that the contents of an affidavit should be read correct and full unless not controverted. 8.1 To support his arguments the Ld. AR for the assessee has also drawn our attention to the judgments of Hon'ble Supreme Court in the case of Mehta Parikh & Co. v. Commissioner of Income-tax, [1956] 30 ITR 181 (SC) wherein Court has held as that:- " It has to be noted, however, that beyond these calculations of figures, no further scrutiny was made by the Income-tax Officer or the Appellate Assistant Commissioner ....
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....e, the same is directed to be deleted." The ld. AR further submitted that the ld. CIT(A) is having coterminous power because there cannot be any dispute over the settled legal proposition that the powers of the first appellate authority are very wide and co-terminus with those of the AO. Reference is made to the judgment of Hon'ble Supreme Court in the case of CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) wherein the Hon'ble Supreme Court have held that the powers of the Commissioner (Appeals) are coextensive with that of the adjudicating authority. What the Assessing Authority can do, can also be done by the Commissioner (Appeals).Section 250 (4) empowers the CIT(A) to make further inquiries on its own or to direct the AO to make further inquiry and to report him, which also empower the CIT(A) to direct the production of any document / the examination of witness, to enable him to dispose of the appeal. Thus, the legislative intent is quite clear that the CIT(A) should not straight away reject, evidence/s filed before him. 9.1 Considering the facts and circumstances as narrated above and respectfully following the judicial precedents as discussed herein above, we are o....
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....deleted in full. 3. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing." The grounds raised in this appeal are interrelated and interconnected and relate to challenging the order of the ld. CIT(A) on the ground that impugned order u/s 271(1)(c) dated 24.02.2022 is bad in law, illegal, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons, therefore, all the grounds are being adjudicated together. 11. The brief facts of the case are that in this case assessment proceedings were completed under section 147 read with section 144 of the I.T. Act, 1961 vide order dated 24.09.2021 assessing the total income of the assessee at Rs. 21,63,980/- by making an addition of Rs. 19,81,560/- on account of unexplained investment under section 69 of the IT Act, 1961 and initiated penalty proceedings under section 271(1)(c). Subsequently, penalty order was passed vide order dated 24.02.2022 imposing penalty of Rs. 4,93,570/- on account of concealment of income. On appea....
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....ing to the provision of law, hence the same may kindly be deleted in full. 3. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing." The grounds raised in this appeal are interrelated and interconnected and relate to challenging the order of the ld. CIT(A) on the ground that impugned order u/s 271(1)(b) dated 15.03.2022 is bad in law, illegal, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons, therefore, all the grounds are being adjudicated together. 14. The brief facts of the case are that in this case assessment proceedings were completed under section 147 read with section 144 of the I.T. Act, 1961 vide order dated 24.09.2021 assessing the total income of the assessee at Rs. 21,63,980/- by making an addition of Rs. 19,81,560/- on account of unexplained investment under section 69 of the IT Act, 1961 and initiated penalty proceedings under section 271(1)(b). Subsequently, notices under section 142(1) were issued to the appellant on 11.02.2021 and....
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....ce of notices in those periods. 1.3 Due to all these reason the assessee could not make compliance of notice and the ld. AO nowhere provided any documentary proof that the notices were served on him physically. Hence no penalty can be imposed. 1.4 Thus no penalty should be imposed on a poor innocent assessee, when there was no fault and guilty mind has been established. Thus there was no melafide intention of the assessee nor counsel for not to comply the notices, when it is an admitted facts that the assessee is a regular IT assessee from last many years and till regularly filling his ITR . Further when the assessee has come to know he himself engaged the counsel and making the compliance the notices and filling the reply. 2. Technical breach only: Alternatively and without prejudice to our other submission, even assuming some default was there, the same at the best was a merely technical and venial breach of law and the conduct of the assessee has not been shown to be contumacious. No deliberate defiance of law is established. It has been held that by the Honble Supreme Court in the case of Hindustan Steels v/s State of Orisa 83 ITR 26 (SC). "That in or....
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....-five thousand rupees for each such failure; Section 273B in The Income-Tax Act, 1995 "273B. Penalty not to be imposed in certain cases.- Not with standing anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, section 271FB,section 271G, clause (c) or clause (d) of sub-section (1) or subsection (2) of section 272A, sub-section (1) of section 272AA or section 272B or subsection (1) or sub-section (1A) of section 272BB or sub-section (1) of section 272BBB or clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure." From a perusal of the above provisions, we can understand that, notwithstanding anything contained in the provisions of clause (b) of Sub-section (1) of section 271, no penalty shall be imposed on the person or the assessee as the case m....
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....e the enacting part of the section in case of conflict an overriding effect over the provision of Act mentioned in the non obstante clause (see Orient Paper and Industries Ltd v State of Orissa, AIR 1991 SC 672) A non obstante clause may be used as a legislative device, to modify the ambit of the provision of law mentioned in the non obstante clause, or to override it in specified circumstances (see T R Thandur v Union of India, AIR 1996 SC 1643) The true effect of the non obstante clause is that in spite of the provision or Act mentioned in the non obstante clause, the enactment following it will have its full operation or that the provisions embraced in the non obstante clause will not be an impediment for the operation of the enactment (see Smt Parayankandiyal Eravath Kanapravan Kalliani Amma v K Devi, AIR 1996 SC 1963) Therefore, in order to bring in application of section 271C in the backdrop of section 273B, absence of reasonable cause, existence of which has to be established by the assessee, is the sine qua non Levy of penalty under section 271C is not automatic Before levying penalty, the concerned officer is required to find out that even if there was any failure referred....
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....). 18. In the result, appeal of the assessee is allowed. ITA No. 1182/JPR/2024 : "1. The impugned order u/s 154 of the I.T. Act, 1961 dated 24.03.2023 as well as the notice u/s 154 and action or proceedings u/s 154 are illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, against the principle of natural justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed. 1.2 The ld. AO has grossly erred in law as well as on the facts of the case in passing the Ex party order u/s 144 rws 147 without providing the adequate and reasonable opportunity of being heard to the assessee in gross breach of law and are bad in law, invalid, illegal and on facts of the case, and hence the same may kindly be quashed and the resultant addition may kindly be deleted in full. 2.1 The ld. CIT(A) has grossly erred in law as well as on the facts of the case in passing the Ex party order without providing the adequate and reasonable opportunity of being heard to the assessee and on wrong stands are in gross breach of law and ar....