TaxTMI 
TaxTMI 
2024 (9) TMI 1958
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.... reported by the Appellant of Rs. 10,06,240/- on the facts and circumstances of the case. 3. The learned Commissioner of Income-tax (Appeals) erred in passing the order without giving adequate opportunities hence violated the principles of natural justice. 4. The Learned Commissioner of Income-tax (Appeals) erred in upholding the addition of Rs. 50,25,540/- as unexplained cash credit despite the fact that the same was attributed as part of turnover by reducing a net profit rate of 1.37%; hence the source stands explained to be business income in the facts and circumstances of the case. 5. The Learned Commissioner of Income-tax (Appeals) erred in law that the Appellant was not authorised to accept demonetised currency between 8.00 - 11.00 pm on 8 November 2016 despite the fact that it ceased to be legal tender from 9 November 2016 as per RBI notification in the facts and circumstances of the case. 6. The Learned Commissioner of Income-tax (Appeals) erred in upholding the addition of Rs. 50,25,540/- as unexplained cash credit just because cash was accepted during demonetisation which is against the intention of demonetisation which was not to penal....
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....d that the additional grounds of appeal raised are pure question of law and further requested to dispose of the same on the merits for the advancement of substantial cause of justice. Reliance is also placed on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Company Limited v. CIT reported in 229 ITR 383 (SC) and also on the ratio of the decision of the Hon'ble Karnataka High Court in the case of Gundathur Thimmappa and Sons v. CIT reported in 70 ITR 70 (Kar.) in support of his prayer. 5. The learned Departmental Representative, on the other hand, strongly opposed the admission of additional grounds of appeal at this stage. 6. We have heard both the parties on the admission of additional grounds. In our opinion, all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of adjudication of the above grounds. Further, we also find that as it is a pure question of law, and therefore, by placing reliance on the judgment of the Hon'ble Supreme Court in the case of NTPC Ltd. (supra), we inclined to admit the additional grounds for the purpose of adjudication as there is no investigati....
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....8.11.2016 (at the close of cash register and business hours) 4,28,280 C) Collections from debtors post 8:00 pm on 08.11.2016 9,89,784 D = A-(B+C) 50,95,346 Net profit deduction had the cash deposit been considered as turnover. (1.37%*50,95,346) 69,806 Total deductions from cash deposits 14,87,870 Amount added u/s.68 50,25,540 The above cash deposit represents cash deposited in both demonetized & non-demonetized currency on 10th Nov.2016 & 12th Nov.2016. The Ld. Assessing Officer has added such cash deposits as unexplained cash credits to the Returned Income for the following reasons :- a. Pay-in-slips/Certificate from banks was not furnished: (i)The assessee had mentioned either demonetized currency and non-demonetised currency without any supporting proof either by way of pay-in-slips or certificate from the concerned bank before the AO. (ii) As the Assessment is getting barred by limitation on 31-12- 2019, the AO could not wait till the assessee produces details of demonetized currency. b. Cash collections post 8:00 p.m. in demoneti....
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....the appellant has deposited specified bank notes in the demonetized cash notes in the denomination of Rs.1000 & Rs.500. The appellant is barred from dealing in any illegal tender and the appellant cannot accept the demonetized specified bank notes even during his activity of sales because it is completely barred by the Central Government of India declaring that the bank notes of existing series of denomination of Rs. 1000 & Rs.500 shall cease to be legal tender on or from 09.11.2016. This has been notified by the Central Government in the Gazette Notification of the Ministry of Finance vide No.2652 dated 08.11.2016. Once the Central Government has notified that the denomination of Rs. 1000 & Rs.500 notes is not legal tender w.e.f. 09.11.2016, nobody can engage in any activity through this currency, hence, the AO has rightly added the amount to that extent of Rs. 35,51,000/- u/s.69A of the Act. Reliance is placed on the decision of Hon'ble ITAT in the case of Raju Ravichandran Namakkal Vs ITO, Ward-2, Namakkal vide ITA no 493/Chny/2023 dated 16.06.2023, regular bench decision in ITA No. 698/Chny/2022 dated 7/2/2023 and decision of Hon'ble ITAT Hyderabad in the case of Vaishn....
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.... in F.No.225/157/2017/ITA.II dated 23.6.2017. Further, the ld. A.R. for the assessee submitted that ld. Authorities below erred in upholding the addition of Rs.50,25,540- as unexplained cash credit by not accepting the fact that the entire cash deposits are part of the Turnover. Further the ld. AR submitted that the AO has not verified demonetized currency as per the notification/circular issued by the CBDT from time to time. 11. The ld. D.R. on the other hand, supported the orders of authorities below. 12. We have heard the rival contentions and perused the materials available on record. Before going into the merit of the case, first we are considering the only legal issue raised by the assessee by way of additional grounds of appeal that whether notice issued not in accordance with the format prescribed by the CBDT is bad in law and therefore, all the consequential assessment proceedings including the assessment order are rendered bad in law? 13 First we take a note of the CBDT instruction in F.No.225/157/2017/ITA.II dated 23/06/2017 which are reproduced below for ease of reference as claimed by the assessee- F. No. 225/157/2017/ITA.II Government of India Minist....
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....hich you feel is necessary in support of the said return of income on or before 3. The above mentioned evidence/information is to be furnished online electronically in 'E- Proceeding' facility through your account in e-Filing website of Income-tax Department. Further proceedings shall also be conducted electronically (*). A brief note on salient features of 'E- Proceeding' is enclosed. 4. In case you do not wish to produce any evidence/information, as mentioned in para 2, you are requested to intimate the same electronically on or before .......................... 5. Specific questionnaires/requisition of information or documents would be sent subsequently, if required. 6. Para(s) (2) to (4) are applicable if you have an account in e-Filing website of Income-tax Department. Till such an account is created by you, assessment proceedings shall be carried out either through your e-mail account or manually (if e-mail is not available). (*) Subject to exceptions as per the enclosed note Yours faithfully, Seal (Name of the Assessing Officer) (Designation) (Telephone No./Fax No.) (E-mail ID) Complete S....
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.... 3. The above mentioned evidence/information is to be furnished online electronically in 'E- Proceeding' facility through your account in e-Filing website of Income-tax Department. Further proceedings shall also be conducted electronically (*). A brief note on salient features of 'E- Proceeding' is enclosed. 4. In case you do not wish to produce any evidence/information, as mentioned in para 2, you are requested to intimate the same electronically on or before ............ 5. Specific questionnaires/requisition of information or documents would be sent subsequently, if required. 6. Para(s) (2) to (4) are applicable if you have an account in e-Filing website of Income-tax Department. Till such an account is created by you, assessment proceedings shall be carried out either through your e-mail account or manually (if e-mail is not available). 7. In cases where order has to be passed under section 153A/153C of the Income-tax Act, 1961 read with section 143(3), assessment proceedings would be conducted manually. (*) Subject to exceptions as per the enclosed note Yours faithfully, Seal ....
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....his Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment. ] 13.4 On a plain reading of the above section, we find that assessee shall be precluded from taking any objection with regard to service of notice in an improper manner if he has appeared in any proceedings or co-operated in any enquiry relating to an assessment. In the present case, we find that during the course of assessment proceedings, the assessee had filed his reply and co-operated with the proceedings by way of filing submissions on different dates and therefore, the assessee is not entitled to take this ground before this Tribunal for the first time as he had not raised any objection before the AO before the completion of Assessment proceedings. Therefore, in our considered opinion, as the assessee had co-operated with the proceedings ....
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.... is undisputed fact that notice u/s 143(2) of the Act dated 24.9.2018 was served on the assessee and as we observed in the assessment order, the assessee had filed submissions/replies/explanations in response to notices issued by AO and accordingly, we are of the opinion that assessee has cooperated with the proceedings before the AO. The assessee had also not raised any objection before the AO with regard to the issue of notice not in the prescribed format as per the CBDT Instruction on or before the completion of the Assessment proceedings. Further it is also not disputed that the notice is not signed and issued in paper format or communicated in electronic format. It is also not disputed that the name & office of the designated income tax authorities is not printed, stamped or written thereon. Upon careful consideration of the arguments presented, it is evident that while the format of the notice is important the primary concern is whether the notice effectively communicated the necessary information to the respondent or not? We are of the strong opinion that notice even though not in the prescribed format if it serves the intent & purpose of the Act, i.e. to inform the assessee....
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....uctions have been issued by CBDT dated 21.2.2017, 3.3.2017, 15.11.2017 & 9.8.2019. The ld. A.R. submitted that as the verification of cash deposit is not in accordance with instruction of CBDT, there is inadequate enquiry in respect of cash deposited during the demonetization period. These, CBDT instructions gives hint regarding what kind of investigation, enquiry, evidences that the assessing officer is required to take into consideration for the purpose of assessing such cases. 16.1 In one of such instructions dated 09/08/2019 speaks about the comparative analysis of cash deposits, cash sales, month wise cash sales and cash deposits. It also provides that whether in such cases the books of accounts have been rejected or not where substantial evidences of vide variation be found between these statistical analyses. Therefore, it is very important to note that whether the case of the assessee falls into statistical analysis, which suggests that there is a booking of sales, which is non-existent and thereby unaccounted money of the assessee in old currency notes (SBN) have been pumped into as unaccounted money. 16.2 The instruction dated 21/02/2017 that the assessing officer ba....