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02-01-2020, Sangita Balaji Wattamwar, Section 147, 148, 139(1), Tribunal Pune
This appeal s filed by the assessee against the order of CIT(A)-3, Pune dated 28.05.2019 for the Assessment Year 2011-12.
2. The grounds raised by the assessee are as under :-
“1. LD CIT (A) has not appreciated the fact that proceedings initiated U/s 147/148 are bad in law as they are based on the mere information of cash deposit.
2. LD CIT(A) has not appreciated the fact that Learned AO has failed to substantiate the reason to believe that the assessee has any other source of income or the income has escaped assessment while reopening the case u/s 148.
3. LD CIT(A) and Assessing officer has failed in appreciating the fact that assessee has submitted various supporting to substantiate the source of said cash deposit, rejecting the explanation given by the assessee without verifying the genuineness and giving merit to the supporting produced during the assessment proceedings. Their opinion is merely based on their own discretion.
4. The assessing officer has erred in not giving an opportunity of additional submission requested by the assessee in letter dated 10th December 2018.
5. The Assessee craves to leave, add/ amend or alter any of the above grounds of appeal.”
3. Briefly stated the relevant facts include that the Assessing Officer issued a notice u/s 147 of the Act for reassessing the cash deposits in the bank account of the assessee amounting to Rs.13,57,500/- maintained with the ICICI Bank. In the reassessment proceedings, the Assessing Officer asked for the sources of the same. Taking resort to the exempt agricultural income, personal and family savings, gifts from relatives such as husband, father-in-law, two brothers, mother etc, the assessee attempted to explain the sources of the said cash deposits of Rs.13,57,500/-. Rejecting the above explanations of the assessee, the Assessing Officer restricted the addition to Rs.10,07,500/-. The details of the same are tabulated as under :-
4. The CIT(A) not only confirmed the addition made by the Assessing Officer, but also after granting due opportunity, the CIT(A) enhanced the assessment and determined the assessed income at Rs.12,07,500/-.
5. Aggrieved with the same, the assessee is in appeal before the Tribunal raising the issues of (i) validity of reassessment proceedings and (ii) the addition of Rs.12,07,500/-.
6. Before me, at the outset, ld. Counsel for the assessee raised the issue of validity of the notice u/s 148 of the Act. Bringing my attention to pages 21 to 23 of the Paper Book (the reasons for issue of notice u/s 148 of the Act and rebuttals thereof), ld. Counsel submitted that the reassessment is not valid in the absence of any tangible material for forming the opinion regarding the escapement of income. Admitting that this is the case where the return of income never filed u/s 139(1) of the Act, ld. Counsel submitted that mere information regarding cash deposits of Rs.13,57,500/- is not a good enough reason f assuming jurisdiction u/s 148 of the Act.
7. On the other hand, ld. DR for the Revenue replied to this legal argument and submitted that when there is no return of income duly filed by the assessee u/s 139 of the Act more so when cash deposit in assessee’s bank account f this magnitude are reported, Assessing Officer is justified in forming the opinion against the assessee regarding the concealment of income. He further submitted that when the explanation of the assessee regarding the sources of this cash deposit is linked to the exempt income like agricultural income etc, the onus is on the assessee to demonstrate the sources of cash deposits are to be intimated to the Department through filing the return of income. Further, mentioning that the assessee responded by filing the return of income in response to notice u/s 148 of the Act disclosing the income of Rs.28,506/-.
8. On this legal issue, I heard both the sides and find in the absence of return of income originally filed u/s 139(1) of the Act coupled with huge amounts of cash deposits of Rs.13,57,500/- is good enough to contribute the formation of reason to believe that this is a case of escapement of income. As mentioned in the open Court, I proceed to dismiss the legal ground no.1 and 2 raised by the assessee. Accordingly, the grounds no.1 and 2 are dismissed.
9. Regarding the issue raised in grounds no.3 and 4, I considered the counsel’s arguments about insufficiency of opportunity granted to the assessee for explaining the details relating to the sources of funds i.e. agricultural income, personal and family savings, gifts from relatives such as husband, father-in-law, t o brothers, mother etc. In this regard, I perused the contents of para 6 3 to 6.8 of the order of the CIT(A) and find relevant to extract the same. The same are extracted hereunder :-
“6.3. DECISION :- The observations of the AO, submissions of the appellant and the material on record have been considered.
6.4 The case of appellant was re-opened u/s 147 of the Act as the appellant made various cash deposits amounting to Rs.13,57,500/- in account with ICICI Bank during FY 2010-11 and she did not file ITR. The notice u/s 148 of the Act was issued to the appellant on 29.03.2018. The appellant filed return of income on 22-10-2018 declaring income of Rs.28,506. The appellant ssessee was asked to submit source of cash deposit of Rs.13,57,500/- made in account no 646101503101 with ICICI Bank during FY 2010-11. After considering the replies of the appellant, the AO added an amount of Rs 10,07,500/- to the declared income of the appellant.
6.5 During the appellate proceedings, the appellant stated that the source of deposit of the cash was explained as given below: The explanation given by the appellant before
i) Agricultural Income of Rs.2,00,000/-
ii) Personal and family savings of Rs.2,50,000/-. Out of the above two, AO accepted source of upto Rs1,50,000/- only in place of combined claim of Rs4,50,000/-.
iii) Gift from husband Balaji Wattamvar for Rs. 2 lakhs. Accepted by AO.
iv) Gift from Father-in-law Namdeo Wattamvar for Rs. 2 lakhs.