TaxTMI 
TaxTMI 
2026 (9) TMI 259
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....7/VNS/2024 "1. Because the Ld. Commissioner of Income tax (A) NFAC was not justify to confirmed the addition of Rs 5800000.00 u/s 69A under the head undisclosed amount and deposited to the bank. 2. Because the Ld. Commissioner of Income tax (A) NFAC was not justify to pass order and confirmed the addition though the appellant has already disclosed the receipts incompliance of notice u/s 148. 3. Because the Ld. Commissioner of Income tax (A) NFAC was not justify to reliance on the assessee submission and cited the case by the appellant. Thought the case of the appellant is fully covered by the apex court. 4. Because the appellant craves for a right to raise any additional ground during the course of hearing of the case. 5. Because the order passed by the Ld. Assessing officer is erroneous, bad in law and on facts and is liable to be deleted." ITA No. 228/VNS/2024 "1. Because the Ld. Commissioner of Income tax (A) NFAC was not justify to confirmed the penalty an amount of Rs. 10000/- under non-compliance of notice issued u/s 142(1) of the income tax Act. 2. Because the appellant craves for a right to raise any ad....
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....t of deposits in cash aggregating Rs. 20,00,000/-. As a result, the ld. Assessing Officer came to the conclusion that a sum of Rs. 1,06,00,500/- had escaped assessment within the meaning of clause (a) to Explanation 2 of section 147 of the Income Tax Act, since the assessee had not filed a return of income. After following the procedure under section 148A, the Assessing Officer issued a notice under section 148 to the assessee for filing of a return. He records that the assessee filed a return of income in compliance to the notice under section 148 on 20.06.2022, wherein he admitted income of Rs. 4,64,080/-. Notices were issued to the assessee to explain the deposits of Rs. 1,06,00,500/- in the bank accounts. In response, the assessee submitted a reply for the transactions made in the bank accounts. He also submitted a computation of income, ITR acknowledgement, bank account statements, TDS forms etc,. On perusal and analysis of the details submitted by the assessee, the ld. Assessing Officer found that the assessee had deposited cash of Rs. 43,00,500/- in an account maintained with Bank of India and Rs. 15,00,000/- in an account maintained with State Bank of India. The assessee wa....
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...., monthly sales summary, possibility of back dating of cash sale or fictitious sales, before arriving at a conclusion in this regard. Reliance was further placed on several judgments to the effect that where the complete books of accounts had been submitted to the Assessing Officer and no discrepancy had been pointed out, cash sales could not be treated as undisclosed income and no addition could again be made with regard to the same. 6. The ld. CIT(A) considered the additions made by the Assessing Officer and in the light of the submissions made by the assessee, but observed that the assessee had not given details of the specific amount of cash in hand as on 1.04.2014 and sale proceeds of Kirana business from 1.04.2014 to 25.06.2014. He further found that the assessee had filed his return in response to a notice under section 148 and no prior or subsequent returns had been filed by the assessee. No month-wise purchases / sales of his business had been submitted and it was only the cash deposits of Rs. 58,00,000/- from 25.06.2014 to 28.06.2014 which had been projected as the turnover on which income had been declared as per the provisions of section 44AB of the Act. No VAT or Sa....
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....asonable cause for said non-compliance. However, he held that the Assessing Officer was not correct in imposing penalty of Rs. 30,000/- for three defaults as the Hon'ble ITAT 'F' Bench Delhi in the case of Smt. Rekha Rani vs. DCIT (2015) 60 taxman.com 131 (Delhi-Trib), had held that the provisions of section 271(1)(b) were of deterrent nature and not for earning of Revenue and therefore, penalty under section 271(1)(b) could not be imposed for each and every notice issued under section 142(1) of the Act which remained not complied with on the part of the assessee, but it should be restricted to the first default only. Accordingly, he restricted the penalty to Rs. 10,000/- and partly allowed the appeals of the assessee. 9. The assessee is aggrieved at both these orders passed by the ld. CIT(A) and has accordingly come before us. Sh. O.P. Shukla, Advocate (hereinafter referred to as the ld. AR) appearing on behalf of the assessee submitted that the assessee had filed a return of income on 20.06.2022, in response to the notice under section 148, disclosing an income of Rs. 4,64,080/- on total receipts of Rs. 58,00,000/-. The assessee was engaged in the business of trading of Genera....
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.... and these credit payments had been realized, which were displayed in the books and duly deposited into the bank account from the same. It was submitted that section 69A could have no application to the facts of the assessee's case as the cash had been entered in the books of accounts against receipt of sale and already been considered in the income returned by the assessee. The books of the accounts of the assessee could not be rejected on account of cash deposit which had already been entered into the books and considered in the determination of profits. Section 69A was only applicable when there was no entry in the books of accounts and even the CBDT had acknowledged vide his Instruction No. 03/2017 dated 21.02.2017, that before coming to any such conclusion, the Assessing Officer had to consider things like the stock register, bank statement, sales tax return, monthly sale summary etc. The ld. AR placed reliance on a number of case laws in support of his arguments which are as follows:- "a. CIT v. Kailash Jewellery House (ITA No. 613/2010, Delhi HC) b. R.B. Jessaram Fatehchand (Sugar Dept) v. CIT (1969) 75 ITR 33 (Bom) c. CIT v. Jaora Flour and Foods ....
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....thin a span of four days and the assessee had also failed to furnish any details of the persons to whom he had sold his business. Accordingly, these circumstances had led the ld. Assessing Officer to conclude that the assessee did not have any business which could justify or explain the deposit of cash into the two bank accounts within a span of four days. He, therefore, prayed that the orders have correctly been upheld by the ld. CIT(A) and deserved to be upheld by the Tribunal also. On the issue of levy of penalty under section 271(1)(b), the ld. DR submitted that it was clear that the assessee had not made compliance to the various notices under section 142(1) that have been issued to him. The mere submission of a reply does not constitute compliance and since the Assessing Officer was not satisfied with the response, the assessee could not claim to have complied with the notices. He therefore, prayed that since the ld. CIT(A) had already granted relief to the assessee in this regard, further relief was not called for. 12. We have duly considered the facts and circumstances of the case and the arguments advanced by the rival parties. We noticed that while the assessee has cla....