आयकर अपीलीय अिधकरण, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No. 17/Ind/2024 Assessment Year: 2017-18

Feeling aggrieved by appeal-order dated 16.11.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”], which in turn arises out of rectification-order dated 13.10.2022 passed by learned ITO- 2(1), Bhopal [“AO”] u/s 154 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on following grounds:-

1. That on the facts and circumstances and in law, the Ld. CIT(A) erred in upholding the action of the AO in invoking provisions of section 115BBE of the Income-tax Act, 1961, in rectification order passed u/s 154 of the Act even when the said issue was debatable in nature and was outside the purview of section 154 of the Act.

2. That on the facts and circumstances and in law, the Ld. CIT(A) erred in upholding the action of the AO in invoking provisions of section 115BBE of the Income-tax Act, 1961, in rectification order passed u/s 154 of the Act even when the AO during the course of assessment proceedings after verification of facts and due application of mind has not invoked provisions of section 69A r.w.s. 115BBE of the Act for making addition to the total income of the appellant.

3. That on the facts and circumstances and in law, the Ld. CIT(A) erred in upholding the action of the AO in invoking provisions of section 115BBE of the Income-tax Act, 1961, in rectification order passed u/s 154 of the Act even when the AO during the course of assessment proceedings has specifically initiated penalty proceedings u/s 270A of the Act and has not initiated penalty proceedings u/s 271AAC of the Act, which itself proves that the AO was of opinion that provisions of section 69A r.w.s. 115BBE of the Act were not applicable .

4. That on the facts and circumstances and in law, the Ld. CIT(A) erred in upholding the action of the AO in computing the amount of tax liability by invoking the amended provisions of section 115BBE of the Income-tax Act, 1961, even when even in respect of cash deposited in the bank accounts prior to 15.12.2016 i.e. prior to the date of obtaining assent from the President of India and henceforth, applicability of the amended provisions of section 115BBE of the Income-tax Act, 1961, in respect of this addition was grossly unjustifiable and wholly unwarranted. ”

2. Brief facts of case are such that the assessee filed return of AY 2017- 18 on 28.10.2017 declaring an income of Rs. 1,16,660/-. The case of assessee was subjected to scrutiny-assessment and the AO issued notices u/s 143(2)/142(1). Finally, the AO passed assessment-order after making an addition of Rs. 20,50,000/- deposited by assessee in bank accounts during demonetization period. The AO’s order is extracted below for an immediate reference:

“6. Further assessee on confronting, has submitted that “I have keeping cash as I wanted to buy a property in India and most of land owners and contractors were not accepting cheques and direct bank transfer at that time. That was the only reason on keeping cash at hand.” In his reply, the contention which cannot be accepted, as there is no proof which can substantiate his statement on deposits during demonetization period which are the sole deposit in cash in the bank accounts. So also there is no withdrawals from bank immediately preceding the cash deposits. Alongwith that the assessee has throughout his statement never explained the actual sou