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2025 Supreme(Online)(ITAT) 467
INCOME TAX APPELLATE TRIBUNAL (AGRA BENCH)
SHRI RAMIT KOCHAR, ACJ
SOURABH KUMAR SONI ASHOKNAGAR (M.P) – Appellant
Versus
ITO - ASHOKNAGAR ASHOKNAGAR – Respondent
ITA 71/AGR/2024
S/Sh. Rajendra Sharma, Manuj Sharma, Adv. & Ms. Ayushi Pareek, Adv. Revenue by Sh. Shailendra Srivastava, Sr. DR
The court ruled that erroneous assessment orders based on mistaken facts necessitate a fresh investigation and denovo assessment under the Income Tax Act.
Headnote:(A) Income Tax Act, 1961 - Sections 68 and 115BBE - Appeal against assessment order - Assessee contested the dismissal of appeal by CIT(A) regarding cash deposits during demonetization, claiming proper documentation was submitted - The court found that the AO's assessment was based on mistaken facts and required fresh investigation - Orders of authorities set aside for denovo assessment. (Paras 6.2, 6.3, 6.5)
(B) Assessment Procedure - The court emphasized the necessity for proper opportunity and compliance during denovo assessment, clarifying that it did not comment on the merits of the case. (Paras 6.5)
Facts of the case:
The assessee made significant cash deposits during the demonetization period, which were questioned by the AO leading to an assessment under Section 68. The assessee claimed these deposits were from legitimate sources, including past savings and business income.
Findings of Court:
The court determined that the previous orders were erroneous due to mistaken facts and required a fresh investigation into the claims made by the assessee.
Issues: The main issues included the legitimacy of cash deposits during demonetization and the proper application of Sections 68 and 115BBE.
Ratio Decidendi: The court ruled that the assessment orders were based on erroneous facts and required a denovo assessment to ensure justice.
Result: Appeal partly allowed for statistical purposes.
| Table of Content |
|---|
| 1. assessee's claims and explanations (Para 5) |
| 2. assessment based on mistaken facts (Para 6) |
| 3. appeal outcome (Para 7) |
ORDER
This appeal in ITA No. 71/Agr/2024 for the assessment year 2017-18 has arisen from the appellate order dated28.12.2023 [DIN & Order No.ITBA/APL/S/250/2023-24/1059147191(1)], passed by learned ADDL/JCIT(A)-7, Kolkata, which, appeal in turn has arisen from the assessment order dated 21.12.2019 passed by Assessing Officer u/s. 144 of the Income-tax Act, 1961.
2. Grounds of appeal raised by the assessee in the Memo of Appeal filed with ITAT, Agra Bench, Agra, reads as under :
1. That the Ld. CIT(A) has erred in passing an order and dismissing the grounds of appeal filed by the assessee without considering the reply filed by the him
2.The Ld. CIT(A) has erred in considering that the original assessment was started based on cash deposit during the demonetisation period and at no point the AO has asked any questions regarding the cash deposits made before or after the demonetisation drive in that particular financial year.
3. That the Ld. CIT(A) has erred in stating in his order u/s 250 that the assessee has only submitted only the bank statement and no other proof which is clearly Incorrect. The assessee has attached the Bank statements, reconciliation of the bank statement with the deposited made during the demonetisation period, copy of statement of MP Online and the assessee has In point no 5,6,7 of the submission stated the point-to- point source of deposit made by him.
4.That the Ld. CIT(A) erred in passing the order stating that "Appellant is responsible for explanation of cash deposit made into his accounts throughout the year" in response to the contention that money deposited on 08/11/2016 should be treated differently as the Ld. AO has specifically asked about the cash deposited during the demonetisation period only. There was no question asked about the cash deposited at any time other than the demonetisation period.Therefore, rejecting the ground raised is clearly wrong and bad in law.
5That the Ld. CIT(A) erred in passing the order stating that the jurisdiction get automated during the APN allocation, with correction in address of the appellant his ITR/reorganization of assessment unit, jurisdiction charges. This contention given by the CIT(A) is clearly wrong as the address of the assessee was never changed by him. And the Ld AO was bound to pass a statutory order u/s 127 r.w.s 129 before transferring the jurisdiction of the assessee, which he didn't pass, making the proceedings void and bad in law.
6.That the Ld. AO and then after the CIT(A)erred in treating the entire income taxable under section 115BBE and wrongly charged tax @ 60 on the entire income even though the assessee has explained that he earned around 120000 during the year from the Kiosks and other computer work. And he has deposited the extra money of Rs. 51518 (1037500- 985982) out of the same earning of Rs. 120000/-only. But the Ld. AO and later the CIT(A) refused to accept the same and added the same income twice in calculating the taxable income of the assessee which Is clearly wrong and lead to double taxation of income earned by the assessee.
7. That the Ld CIT(A) erred in understanding that the case of the assessee was originally reopened because of the cash deposited during the demonetisation period and the Ld. AO had mistakenly calculated the amount deposited during the demonetisation as Rs. 1251500/- which in originality was Rs. 1037500 only. The Ld AO in his order accepted that Rs. 9,85,982 was deposit out of money from M.P Online Kiosk only. So the assessee has deposited only Rs. 51518 (1037500-985982) extra, which is from the Rs. 120000 earned by the assessee from the typing and other computer work. The whole assessment and addition framed by the Ld. AO was on the basis that Rs. 1251500 was deposited during the demonetisation period and the Ld AO has deducted Rs,985982 from the same owing to the linkage to MP Onl
