TaxTMI 
TaxTMI 
2025 (11) TMI 565
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....ee is a Member of Scheduled Tribe of Arunachal Pradesh and is engaged in the business of contract carriage (Transportation) in the state of Arunachal Pradesh providing transport services the Director of Supply and Transport, Nagharlagun, Govt of Arunachal Pradesh during the year. The assessee is a resident of Arunachal Pradesh and filed the return of income on 6.4.2011 showing total income at Nil by claiming income to be exempt u/s. 10(26) of the Act. The return was processed u/s. 143(1) of the Act on 7.2.2012. Thereafter, the case of the assessee was selected for scrutiny through CASS followed by issuance of notices u/s. 143(2) and 142(1) of the Act along with questionnaire, which were duly served upon the assessee. Ld. AR of the assessee complied with the said notices by appearing personally before the Assessing Officer and submitting various documents such as Trade Licenses, ST certificate, photocopies of TDS certificates, Bank statements of Vijaya Bank, Itanagar Branch in respect of A/C No.880100300001451 and Axis Bank A/c No.015010100564274. Ld. AO further directed the assessee to furnish the details/evidences in support of cash transactions explaining the source. Thereafter, ....
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....n bank account. Ld. AR filed before the Bench the copies of the bank statement, evidences of withdrawals of cash on various dates and proofs of redeposits thereof. It was submitted before us that the cash was withdrawn for purchase of some properties, which did not materialise and, therefore, the cash was deposited back into the bank accounts of the assessee. Therefore, once the sources of cash deposits are explained to be out of withdrawals of cash from the bank account of the assessee, then same cannot be added to the income of the assessee as unexplained money. Ld. AR submitted that this is simple withdrawals and deposits of cash either in the same bank account or to another account, which did not generate any income or profit of any kind whatsoever and, therefore, same cannot be treated as income of the assessee. Ld. AR while referring to the books of account of the assessee submitted that all these entries were duly recorded in the assessee's books of account. The assessee also submitted before us the details of summary of cash withdrawals and deposits to corroborate the fact that the deposits of cash were out of assessee's own withdrawals and not from any outside sources. Ld.....
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.... 09-Feb-10 Vijaya Bank 0021 200000.00 5858500.00 Dr 09-Feb-10 Vijaya Bank 0021 130000.00 5988500.00 Dr 05 May-10 Axis Bank 4274 300000.00 6288500.00 Dr 11-Mar-10 Vijaya Bank 0021 3210000.00 9498500.00 Dr 23 Mar-10 Vijaya Bank 0021 10000000.00 19498500.00 Dr 27 Mar-10 Axis Bank 4274 1000000.00 20498500.00 Dr 8. The ld. AR while summing up his arguments and relying on the above decisions, vehemently submitted that the authorities below had hopelessly failed to bring any substantive evidences on records to prove to the contrary and therefore prayed that the appeal of the assessee may be allowed by directing the AO to delete the addition. 9. Ld. DR relied heavily on the orders of authorities below and submitted that the it was not in dispute that assessee was a transport contractor of Government of Arunachal Pradesh and derived gross freight /income from transportation activities amounting to Rs. 13,44,00,000/- from which the assessee was assessed @ 10% which worked out to Rs., 1,34,40,000/- and exemption u/s. 10(26) of the Act was allowed to the assess....
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.... into the banks out of withdrawals of cash, the evidences to that effect in the form of bank statements and books of account were on records. Therefore the order of ld CIT(A) appears to be wrong and thus cannot be sustained. In our opinion, the assessee has fully explained the sources of cash deposits into the bank account on various dates. Therefore, we find merits in the contention of ld. AR that the Assessing officer has wrongly treated the cash deposits into the bank account as undisclosed income of the assessee. Moreover, the Assessing Officer has not brought on record any extraneous and substantive material which proved that the assessee could have earned such income. Our view finds support from the decision of the Co-ordinate Bench of Amritsar in the case of Joginder Kaur vs ITO (2024) 169 taxmann.com 99 (Amritsar), wherein, the Co-ordinate Bench has held that where the assessee has submitted the details of cash summary showing inflow and outflow cash in the relevant year to show that cash has been withdrawn and redeposited, then the assessee was to be allowed the benefit of redeposit and the impugned addition deserved to be deleted. For the sake of brevity, the relevant fin....
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....ithdrawn from the same bank account by the assessee during the same financial year we allow the assessee the benefit of redeposit, in absence of any findings regarding the utilization of the said cash drawn elsewhere, and we direct the addition of Rs. 62,18,200/- to be deleted. 13.1 Since we have already decided the issue on merits of the case, in favour of the assessee, the other legal grounds taken by the assessee becomes academic and as such we are not adjudicating on the same. 14. In the result, the appeal of the assessee." 11. Similarly, in the case of Ajaya Data (supra), the Co-ordinate Bench has held as under: 6. We have considered the rival submissions as well as the relevant material on record. We note that the only issue in this ground is whether the Ld. CIT(A) is justified in not allowing set off of cash considered unexplained by him against the cash withdrawal of Rs. 4,72,000/- made from M/s Vijay Industries between 05.04.2014 to 20.04.2015. We note that no document is found in search to come to a conclusion that the amount withdrawn by the assessee from M/s Vijay Industries has been utilized elsewhere. There is no law which prohibits an assessee to....
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....ed the order u/s 250 of the Act on 31.12.2019, confirming the additions made in the assessment order passed u/s 143(3) of the Act which were already stood quashed by virtue of order passed u/s 263 of the Act dated 29.02.2016. 14. The assessee challenged the order passed u/s 250 of the Act dated 30.12.2019, upholding the assessment order passed u/s 143(3) of the Act dated 29.03.2014 before the tribunal. Now the assessee has raised an additional ground before us challenging the validity of the revisionary proceeding's u/s 263 of the Act and the consequent order passed u/s 263 of the Act dated 29.02.2016, on the ground that in terms of clause (c) of explanation 1 to Section 263 of the Act, the exercise u/s 263 of the Act is barred. In other words, it was argued before us that the ld. PCIT has no jurisdiction to revise the assessment which was sub judice before the ld. CIT (A) on the same issues at the relevant point of time. Pertinent to state that in the set aside proceedings the assessment was framed by the ld. AO u/s 143/ 263 of the Act making the same additions as were made in the assessment framed u/s 143(3) of the Act dated 29.03.2014, which stood revised by the ld. Pr. Commi....
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....IT, Kolkata in ITA no. 764 to 766/KOL/2024 vide order dated 05.04.2017, Concord Infra Projects Pvt. Ld. Vs. PCIT in ITA No. 174/KOL/2021 vide order dated 13.10.2024. Thus assessee is within its legitimate and lawful right to challenge the revisionary order u/s 263 of the Act even in the collateral proceeding/consequential proceedings as has been held in the aforesaid decisions. 17. The case of the assessee find support from the decision of in the case of Keshab Narayan Banerjee (supra) herein the Hon'ble Kolkata High Court has held as under: - "We, therefore, are of the view that there is neither any material which could justify the inference or finding that service by registered post was either effected or should be deemed to have been accomplished nor was this the case of the respondents before the learned single judge and thus the learned single judge erred in law in returning such a finding. We have, therefore, no hesitation in holding that the service by registered post of the notices allegedly sent to the appellant writ applicant, resulting in the passing of the order under section 147 of the Act was not properly effected or accomplished. Since, admit....
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....y the AO before initiating assuming jurisdiction u/s 147 of the Act then in such an event it cannot be said the AO has validly assumed jurisdiction u/s 147 of the Act. As discussed even if for any reason, the assessee had not challenged the validity of proceedings u/s 147 of the Act by filing appeal against the order framed u/s. 147 of the Act, it can be challenged in the appeal against an order passed by the Ld. PCIT u/s 263 of the Act revising the invalid order u/s 147 of the Act. As noted this issue has been analysed by the Mumbai Bench of the Tribunal in the case of M/s. Westlife Development Ltd. (supra) wherein the Tribunal has equated the reopening assessment u/s 147 to primary proceedings and the subsequent proceedings by Ld. PCIT u/s 263 passed to be collateral proceedings. In this order the Tribunal has taken note of several ratio's of the Hon'ble Supreme Court wherein the Hon'ble Supreme Court held that if the primary proceedings are non-est in law or void on the ground of lack of jurisdiction, then the validity of such proceedings can be challenged even in an appeal arising out of collateral proceedings. Since we have already set out the ratio/operating portions of these....
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....the settled position of law on this issue. 11. As noted (supra) the Parliament has given power to AO to reopen the assessment, if the condition precedent as discussed above are satisfied, and not otherwise. It should be kept in mind that the concept of assessment is governed by the time-barring rule and the assessee acquires a right as to the finality of proceedings. Queitus of the completed assessment is the Fundamental Rule and exception to this rule is Re-opening of assessment by AO under section 147 or exercise of Revisional jurisdiction by CIT under section 263 of the Act. Therefore, the Parliament in its wisdom has provided safeguards for exercise of the reopening of assessment jurisdiction to AO; and revisional jurisdiction of CIT by providing condition precedent which is sine qua non for assumption/usurpation of jurisdiction. In the case of reopening of assessment, the reason to believe escapement of income is the jurisdictional fact and law (mixed question of fact and law) and for revisional jurisdiction the order of the AO should be erroneous as well as prejudicial to the revenue. Unless the condition precedent is not satisfied, the AO or the CIT can exercise the....
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....bsequently the case was selected for scrutiny u/s 147 on the basis of an information received from the authentic source that M/s Miracle Commodities Pvt Ltd there is frequent high value deposit in their bank accounts and immediate transfer to some third party account. During the course of further investigation it is found that large value of amount has been routed to M/s Concord Infra Projects Pvt. Ltd. From further detailed investigation and analysis of data/information it is revealed that during the FY:2009-10 corresponding to A Y :2010-11, M/s Concord Infra Projects Pvt Ltd has allotted shares @ Rs. 10 per share at high premium to as many as 16 Kolkata based companies amounting to Rs. 8,34,00,000/-. The fund so raised was invested in the shares of Kolkata based companies at very high premium which does not commensurate with the financial position of the company in which such investment was made. Subsequently there was change in the Directors of M/s Concord Infra Projects Pvt Ltd. It clearly shows that the company has been sold claimed as to real beneficiaries who channelized their unaccounted income and converted bogus investment to real usable assets. Funds so....
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....as the foundation fact on the basis of which reopened the assessment as is evident from the reasons recorded (supra) was that high value of money was deposited in the bank account of M/s Miracle which in-turn has been routed to the assessee through third party in the form of share subscription to the tune of Rs. 8.34 crores which fact was found by Ld. PCIT to be absent. So, the AO's belief of escapement of income was on wrong assumption of facts and so invocation of reopening jurisdiction by issue of notice u/s 148 of the Act is bad in law and, therefore, the consequent re-assessment order dated 29.12.2017 of the AO is a nullity and, therefore, the order of the Ld. Pr. CIT to interfere in the order of the AO dated 29.12.2017 u/s. 144/147 of the Act is also a nullity and, therefore, the action of the Ld. Pr. CIT to invoke his jurisdiction u/s. 263 of the Act itself was without jurisdiction. Ergo, we hold the impugned order as null in the eyes of law, so we quash it. 17. In the result, the appeal of assessee is allowed." 19. We have heard the rival contentions and perused the materials available on record, we find that in this case the ld. PCIT exercised the revised juris....