Case Law Details
Shiv Kumar Vs ITO (ITAT Delhi)
In the case Shiv Kumar vs. Income Tax Officer (ITO), the Income Tax Appellate Tribunal (ITAT) Delhi ordered a reassessment regarding an unsubstantiated deposit of ₹10.3 lakh during the demonetization period. The original appeal filed by the assessee, Shiv Kumar, was dismissed by the Commissioner of Income Tax (Appeals) [CIT(A)] because he did not meet the advance tax condition under Section 249(4)(b) of the Income Tax Act. The CIT(A) upheld the Assessing Officer’s (AO) ex-parte assessment under Section 144 of the Act, which added ₹10.3 lakh to the assessee’s income under Section 69A, as the source of the cash deposits was not sufficiently justified.
Representing the assessee, Ms. Sanju Kumari argued that Shiv Kumar had not filed a tax return for the year, as his income, including business and interest income, was below the taxable threshold of ₹1.47 lakh. Despite providing some explanations to the AO during the initial assessment, the AO determined these were insufficient. The Tribunal, after reviewing the situation, decided it was fair to allow the assessee another chance to present evidence supporting the source of the deposits. It set aside the original order, directing the AO to conduct a fresh assessment based on the assessee’s submissions and following legal protocols. Shiv Kumar has been instructed to promptly respond to any notices served in this reassessment process.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as ‘the CIT(A)’) dated 06.02.2024, for assessment year 2017-18.
2. Ms. Sanju Kumari, appearing on behalf of the assessee submits that the CIT(A) has dismissed appeal of the assessee at the outset on the ground that the assessee has failed to fulfill condition of payment of advanced tax in accordance with the provisions of section 249(4)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). She stated that the assessee did not file return of income as income of the assessee during the relevant period was much below the threshold limit. She stated that the gross total income of the assessee including income under business head and interest from savings was Rs.1,47,030/-. Therefore, no advance tax was liable to be paid by the assessee. An addition of Rs.10,30,000/- was made by the Assessing Officer (AO), on account of cash deposits in the bank account during demonetization period from 12.11.2016 to 13.12.2016. During assessment proceedings the assessee made submissions before the AO, however the Assessing Officer completed assessment u/s. 144 of the Act.
4. Shri Sanjay Kumar representing the department vehemently defending the impugned order submitted that the assessee did not comply with the mandatory conditions of section 249(4)(b) of the Act, hence, the CIT(A) had no option but to reject appeal of the assessee.
5. Both sides heard, order of the authorities below examined. The solitary addition made by AO in the hands of assessee is of Rs.10,30,000/- u/s. 69A of the Act. The assessee had allegedly deposited Rs.12,30,000/- in his bank account. The AO granted relief of Rs. 2,00,000/- and made addition of the remaining amount. Admittedly no return of income was filed by the assessee during the impugned assessment year. During assessment the assessee/appellant did furnish some reply before the AO but the AO found it to be unsubstantiating the plea of assessee and completed the assessment u/s. 144 of the Act. The ld. Counsel for the assessee has contended that the assessee would be able to substantiate the source of cash deposits if an opportunity is allowed. Considering the facts of case, I deem it appropriate to restore the issue in appeal to AO for fresh consideration. The AO is directed to make fresh assessment after considering submissions of the assessee, in accordance with law.
6. The assessee upon service of notice shall respond to the same, without fail.
7. In the result, impugned order is set aside, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on Tuesday the 01st day of October, 2024.
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