Case Number: ITA 671/DEL/2021
Appellant: Sangeeta Toppo, New Delhi
Respondent: ITO Ward – 54(2), New Delhi
Assessment Year: 2012-13
Case Filed On: 2021-06-09
Order Type: Final Tribunal Order
Date of Order: 2022-05-04
Pronounced On: 2022-05-04
The case of Sangeeta Toppo vs. ITO focused on the addition of unexplained cash deposits under Section 69A of the Income Tax Act, 1961, by the Assessing Officer (AO) and the subsequent order passed by the National Faceless Appeal Centre (NFAC) for the assessment year 2012-13. The appellant challenged the addition of Rs. 12,15,000/- as unexplained cash deposits in her bank account.
Appellant: Sangeeta Toppo, residing at 116, Block – 1, New Minto Road Hostel, Minto Road Complex, New Delhi – 110 002. The appellant’s PAN is AFBPT6223J.
Respondent: Income Tax Officer (ITO), Ward 54(2), New Delhi.
The appeal was filed by Sangeeta Toppo against the impugned order dated 09.04.2021 passed by the NFAC for the quantum of assessment under Section 147/144 of the Income Tax Act, 1961, for the assessment year 2012-13. The primary issue was the addition of Rs. 12,15,000/- as unexplained cash deposits under Section 69A, and the appellant also raised a legal ground regarding the non-issuance of a notice under Section 143(2) in response to the return filed after the issuance of notice under Section 148.
The appeal, registered as ITA No. 671/DEL/2021, was heard before the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘SMC’ on May 4, 2022. The bench consisted of Shri Amit Shukla, Judicial Member.
The appellant was represented by Shri Devesh Poddar, Advocate. The appellant argued that the cash deposits were related to day-to-day business activities, specifically her engagement in the business of online survey feedback of products. Furthermore, the appellant contended that no notice under Section 143(2) was issued in response to the return filed subsequent to the notice under Section 148.
The respondent, represented by Smt. Radha K. Narang, Senior DR, argued that the return filed by the appellant was under Section 119(2)(b) and not in response to the notice under Section 148. Therefore, there was no requirement to issue a notice under Section 143(2).
The ITAT considered the arguments from both sides and reviewed the relevant legal precedents and facts of the case. The tribunal noted:
“The solitary grievance of the assessee is that the CIT(A)/NFAC erred in confirming the disallowance of Rs. 12,15,000/- made by the AO under Section 69A of the Act.”
The ITAT observed that the AO had relied on information from the Non-PAN AIR report, which indicated that the appellant had made significant cash deposits in her bank account during the relevant year and had not filed a return of income. The AO, therefore, initiated proceedings under Section 147/148 to assess the income escaping assessment.
The tribunal further noted that the AO had concluded the assessment without issuing a notice under Section 143(2) after the return was filed by the appellant. The tribunal emphasized the mandatory requirement of issuing a notice under Section 143(2) before finalizing the assessment if the return was filed in response to the notice under Section 148.
Considering the evidence and submissions, the ITAT held:
“I hold that it is not a return u/s 119(2)(b) albeit it is a return filed in response to notice u/s 148 which has been accepted by the AO. Thus, when the return has been filed in response to notice u/s 148, it was mandatory for the AO to issue notice u/s 143(2) before the completion of assessment if he wanted to vary the return of income and make an addition.”
The tribunal directed the deletion of the addition of Rs. 12,15,000/- made by the AO under Section 69A, allowing the appeal of the assessee.
The appeal filed by Sangeeta Toppo against the order of ITO Ward 54(2), New Delhi, for the assessment year 2012-13, was partly allowed. The tribunal directed the deletion of the addition made under Section 69A, considering that the mandatory notice under Section 143(2) was not issued. This case highlights the importance of procedural compliance in tax assessments, particularly the issuance of notices under relevant sections of the Income Tax Act.
Income Tax Appellate Tribunal, Delhi Bench ‘SMC’, New Delhi
Before: Shri Amit Shukla, Judicial Member
Order:
Aforesaid appeal has been filed by the assessee against the impugned order dated 09.04.2021 passed by National Faceless Appeal Centre, Delhi for the quantum of assessment passed under section 147/144 of the Income-tax Act, 1961 (for short ‘the Act’) for the assessment year 2012-13.
In various grounds of appeal, the assessee has challenged the addition of cash deposit of Rs. 12,15,000/- as alleged unexplained cash deposited in the bank account of the assessee under Section 69A of the Act. Apart from that, the assessee also raised an additional ground that no notice under Section 143(2) was issued in response to the return filed by the assessee subsequent to the issuance of notice under Section 148.
Brief facts qua the legal issue raised are that, as per Non-PAN AIR information, it was noticed that the assessee had made cash deposits of Rs. 12,15,000/- in a saving bank account in the AY 2012-13 and the assessee had not filed the return of income. Accordingly, the AO acquired jurisdiction under Section 147/148 to bring the cash deposits as income escaping assessment to tax. The assessee, in response to notice under Section 148 dated 29.03.2019, filed a return of income on 19.11.2019. The AO, however, noted that the assessee had not filed the income tax return in response to the issuance of notice albeit the same has been filed under Section 119(2)(b) on 19.11.2019. On merits, the assessee’s contention was that she was engaged in the business of online survey feedback of products and the cash deposited was related to day-to-day business activities. However, AO, on the basis of his own verification, found that the assessee had joined Speak Asia in 2011 and submitted the bills for FY 2010-11 relevant to AY 2011-12. Thus, the explanation given by the assessee is nothing but an afterthought. Further, the assessee had not filed any concrete evidence about the cash deposit of Rs. 12,15,000/- and accordingly, the same was added under Section 69A. Ld. First Appellate Authority, after detailed reasoning, has dismissed the assessee’s appeal on merits.
Before us, ld. counsel for the assessee submitted that here in this case, once the return was filed in response to notice issued under Section 148, the AO should have issued notice under Section 143(2); and AO in his assessment order has accepted the income declared in the income-tax return of Rs. 1,45,500/-. Thus, the return of income filed by the assessee has been accepted by the AO. He further pointed out that AO has wrongly mentioned that the return was wrongly filed under Section 119(2)(b) instead of under Section 148. In support, he has filed the details of income-tax website portal, details of which are in the paper book, stating that the assessee has filed the return under Section 148. Apart from that, it is an admitted fact that no notice under Section 143(2) was issued even the assessment order is silent on this point.
On the other hand, ld. DR for the Revenue submitted that the AO has categorically mentioned that the return was not filed in response to notice under Section 148 but under Section 119(2)(b). Once the assessee has not filed any return under Section 148 then there is no question of issuance of notice under Section 143(2). On the last occasion, the Tribunal has directed the AO to submit the report to verify this fact. AO has submitted the report that assessee had filed the ITR on 19.11.2019 which was filed under Section 119(2)(b) and also enclosed the screenshot from the income-tax e-filing portal wherein it is mentioned that the appeal has been filed under Section 119(2)(b). He also submitted that there is no condonation of delay in filing of income-tax return, accordingly the ITR filed under Section 119(2)(b) could not be considered a valid ITR and in such a situation, the AO could not issue notice under Section 143(2).
I have considered the rival submissions and also perused the relevant facts qua this issue involved. The assessee’s contention is that the assessee has filed a return in response to notice under Section 148, whereas the Revenue’s contention is that the assessee has filed a return for the assessment year 2012-13 on 19.11.2019 under Section 119(2)(b), which is almost after more than 7 years from the due date of filing of return of income filed for the AY 2012-13. This return has been stated to be filed under Section 119(2)(b) and, therefore, this return could not be considered as a valid ITR and accordingly, there was no requirement of issuance of notice under Section 143(2). First of all, AO in the assessment order has proceeded to make the computation of income and assessed the income as per the return of income filed on 19.11.2019.
Be that as it may, the assessee has filed the screenshot of the e-filing return wherein it mentions that the return has been filed under Section 148. Scanned copy is as under:
[screenshot]
Whereas the Revenue’s screenshot has given the following details:
[screenshot]
Section 119(2)(b) reads as under:
“119. ……
…….
(b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorize any income-tax authority, not being a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund, or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;”
Thus, the Board has been given the power that in case of any genuine hardship, to admit the application for any exemption, deduction, refund, or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law. Thus, the prerequisite condition is that, firstly, the assessee has to file an application for a claim for any exemption, deduction, refund, or any other relief to the Board; and secondly, the Board if considered it desirable or expedient for avoiding any general hardship may authorize any income-tax authorities to accept this application. Nowhere in the record which is even admitted by the AO in his remand report that the assessee has ever made any application before the CBDT. Not only that, there is no claim for any exemption, refund, or any other relief by the assessee. It is not understandable, how and under what circumstances the return of income for AY 2012-13 filed on 19.11.2019 can be stated to be under Section 119(2)(b) as shown in e-filing portal submitted by the AO. On the contrary screenshot of filing of the return by the assessee is shown as filed in response to the notice under Section 148. Once there is no application filed by the assessee, then there cannot be any return under Section 119(2)(b). In any case, CBDT Circular No. 9/2015 dated 09.06.2015 had clearly instructed that no condonation application for claim of refund/loss within the scope of section 119(2)(b) shall be entertained beyond six years from the end of the assessment year for which such application/claim is made. Here in this case, six years had expired on 31.03.2019, whereas the assessee had filed the return on 19.11.2019. Thus, even as per the CBDT Instruction/Circular (supra), such a return could not have been entertained under Section 119(2)(b). Accordingly, I hold that it is not a return under Section 119(2)(b) albeit it is a return filed in response to notice under Section 148 which has been accepted by the AO. Thus, when the return has been filed in response to notice under Section 148 then it was mandatory for AO to issue notice under Section 143(2) before the completion of assessment, in case he wanted to vary the return of income and make an addition. Accordingly, the additions made by the AO are deleted on the ground that the statutory requirement of issuance of notice under Section 143(2) is not complied. Accordingly, the additions are deleted.
The other grounds are not adjudicated upon as the same are become purely academic and dismissed as infructuous.
In the result, the appeal filed by the assessee is partly allowed.
Order was pronounced on 4th day of May, 2022.
Sd/-
(AMIT SHUKLA)
JUDICIAL MEMBER
Dated: 04.05.2022
TS
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.
Sangeeta Toppo vs. ITO: Unexplained Cash Deposits and 147/144 Assessment, 2022
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