Iapl/135/2018 Of Kamal Kumar Agrawal v. Principal Commissioner Of Income Tax-I

-Court No. 7 Case :- INCOME TAX APPEAL No. - 135 of 2018Appellant :- Kamal Kumar AgrawalRespondent :- Principal Commissioner Of Income Tax-ICounsel for Appellant :- Shambhu ChopraCounsel for Respondent :- Shubham Agarwal Hon'ble Biswanath Somadder,J.Hon'ble Ajay Bhanot,J. This appeal under section 260 of the Income Tax Act, 1961, wasadmitted on 09.10.2018. by an earlier Division Bench of this Court onquestions no. 1 and 2 as framed in the memorandum of appeal. Forconvenience, the two questions are reproduced hereinbelow:- (1) “Whether, on the facts and circumstances of the case, Hon'ble ITATwas legally correct in its view that the assessee did not submit evidenceor material at all before the lower Income Tax authorities in support ofits claims for the deductions relating to, operating expenses, the cashdeposit in bank and agricultural income. (2) Whether on the facts and circumstances of the case and keeping inview the fact that the assessee had, in fact, submitted writtensubmissions dated 31.01.2017 before the CIT(A) alongwith additionalevidences which were admitted by the CIT(A) and further evidence,viz. Confirmatory letter of salary paid during the relevant periodsubmitted before the ITAT, was the ITAT legally and judicially justifiedin its findings that the assessee did not explain the operating expenses,the agricultural income or the deposit in bank accounts, and thereby indismissing the assessee's appeal.” Before we proceed to deal with the two questions, we need toconsider the facts of the instant case, which have been recorded in theassessment order dated 05.01.2016. For convenience, the assessmentorder is reproduced hereinbelow in its entirety:- “In this case return has been filed on 30.3.2014 showing an income of Rs.3,01,370/- accordingly the case was processed U/s 143(1) on 22.06.2014. The case was selected under CASS for scrutiny. A notice U/s 143(2) issued on 05.09.2014and duly served by speed post as well as by inspector of this ward. Notice U/s142(1) issued on 09.04.2015 and 29.04.2015 fixing 16.04.2015 and 11.05.2015but no compliance was made by the assessee. A show cause notice U/s 271(1)(b)issued on 22.05.2015 for 28.05.2015. On 27.05.2015 an application foradjournment received. The case was adjourned to 15.06.2015. On the day Shri K.K. Agarwal, C.A. attended and filed reply with computation of income, copy ofbank accounts etc. The source of income is income from remuneration, interestfrom firm and income from other sources. A notice U/s 142(1) issued on24.06.2015 for 02.07.2015. An application for adjournment filed by the assesseeon 01.07.2015. Case adjourned for 17.07.2015 but no compliance was made.Notice U/s 271(1)(b) issued for 18.08.2015 but the fate is same. A penalty for Rs.10000/- has been imposed vide order dated 28.08.2015 and duly served by speedpost. Notice U/s 142(1) issued on 07.09.2015, 29.09.2015, 05.10.2015 for14.09.2015, 07.10.2015 and 16.10.2015 but no compliance was made as requiredvide notices. A show cause notice issued on 15.10.2015 for 21.10.2015 and09.11.2015 but the fate is same. As the assessee has failed to make compliance ofthe notices and furnish details as required. Therefore the assessment is completed as under:- -----------------Total Taxable Income--14,32,810/- ----------------- Assessment is completed on an income of Rs. 14,32,810/-. Issue challan andnotice of demand. Charge interest U/s 234A, 234B & 234C as per rule. As theassessee furnished inaccurate particulars of his income hence penalty proceedings is being initiated separately. Notice U/s. 271 (1) (c) issued.” Therefore the assessment is completed as under:- -----------------Total Taxable Income--14,32,810/- ----------------- Assessment is completed on an income of Rs. 14,32,810/-. Issue challan andnotice of demand. Charge interest U/s 234A, 234B & 234C as per rule. As theassessee furnished inaccurate particulars of his income hence penalty proceedings is being initiated separately. Notice U/s. 271 (1) (c) issued.” It appears from the above assessment order that the Revenuefollowed due process of law to its hilt and in spite of granting theassessee several opportunities, he miserably failed to comply with thenotices issued by the concerned authorities. As such, the assessment wascompleted in the manner as stated in the order reproduced hereinabove.The assessee, thereafter, preferred a statutory appeal before theCommissioner of Income Tax (Appeals)-I, who passed an order on28.03.2017. For convenience, paragraph 9 of the order passed by theCommissioner of Income Tax (Appeals)-I, is reproduced hereinbelow:- “I have considered the appellant's submission, the A.O.'s remandreport and the facts available in the assessment order. I find that the appellant has disclosed his income from lecturership,etc. under the head of 'income from other sources', and in his returnof income claimed deduction of operating expenses of Rs. 5,94,630/-under the provisions of section 57(iii) of the Act. A break-up of theoperating expenses has been furnished by him during the appealproceedings but he has not been able to provide evidences in supportof the said expenses. The A.O. has confirmed the above finding afterexamining the appellant's submission and its annexures. He hascommented that deduction of operating expenses of Rs. 5,94,630/-under section 57(iii) is not allowable to the appellant. This findinghas not been rebutted by the appellant. In the remand report, the A.O.has also given a finding that the appellant has not been able toprovide any evidences during the remand proceedings in support ofhis explanation about the cash deposit of Rs. 1,90,000/-, as well asabout the agricultural income of Rs. 1,50,000/- disclosed by him inthe return of income. This finding, too, has not been rebutted by theappellant. Under the above circumstances, I am inclined to believe thatdeduction of the operating expenses of Rs. 5,94,630/- cannot beallowed to the appellant under the provisions of section 57(iii) because adequate evidences for the same have not been provided bythe appellant and also because the nexus between these expenses andthe income from other sources declared by the appellant in the returnof income, has not been proved by him. I also hold that the other twoadditions of Rs. 1,50,000/- by treating the declared agriculturalincome as income from other sources, and that of Rs. 1,90,600/-,being cash deposited in the appellant's bank account, are correctlymade by the A.O. Grounds no.2, 3 and 4 are accordingly dismissed.” Upon dismissal of the appeal, the assessee went up before thelearned Income Tax Appellate Tribunal, Agra Bench, which, uponconsidering the entire gamut of the case, proceeded to pass a judgmentand order dated 12.03.2018. It is this judgment and order dated12.03.2018, passed by the learned Income Tax Appellate Tribunal, AgraBench, which brings the assessee before us in the instant appealpreferred by him under section 260-A of the Income Tax Act, 1961. Grounds no.2, 3 and 4 are accordingly dismissed.” Upon dismissal of the appeal, the assessee went up before thelearned Income Tax Appellate Tribunal, Agra Bench, which, uponconsidering the entire gamut of the case, proceeded to pass a judgmentand order dated 12.03.2018. It is this judgment and order dated12.03.2018, passed by the learned Income Tax Appellate Tribunal, AgraBench, which brings the assessee before us in the instant appealpreferred by him under section 260-A of the Income Tax Act, 1961. The learned Income Tax Appellate Tribunal, Agra Bench, whileconsidering the facts and circumstances of the instant case, took noticeof the additional evidence submitted by the assessee such as salarycertificates from his employees. It may not be out of place to mention, atthis juncture, that the appellant before us is a Chartered Accountant, assubmitted by the learned advocate for the appellant. Notwithstanding thefact that he is a Chartered Accountant, the salary certificates submittedby him as additional evidence before the learned Tribunal were dated27.09.2017., i.e. post passing of the order of assessment. It is in thebackdrop of this fact situation, that the learned Income Tax AppellateTribunal, Agra Bench did not find any error in the order of the learnedCommissioner of Income Tax (Appeals)-I. Relevant portion of thejudgment and order dated 12.03.2018. rendered by the learned IncomeTax Appellate Tribunal, Agra Bench, is reproduced hereinbelow:- 5 “Before this Bench, the assessee has filed by way of additionalevidences, salary Certificates from his employees. These Certificates,however, are dated 27.09.2017, i.e., post the passing of the impugnedorder. They, thus, do not serve the purpose of the assessee. 6. We do not find any error in the order of the ld. CIT(A). Theassessee has remained unable to explain the operating expensesclaimed at Rs.5,94,630/-. The break-up furnished before theAuthorities below has not been supported by any evidence. 7. Apropos the cash deposit of Rs.1,90,000/- also, no evidence hasbeen furnished. So far as regards the agricultural income of Rs.1,50,000/-, the position remains much the same, as qua this claim also,no evidence has been filed. So much so, that even in the writtensubmissions filed before the ld. CIT(A), as reproduced hereinabove,no grievance in this regard was raised by the assessee. The ld. CIT(A)has duly taken into consideration the break-up of the operatingexpenses. 8. In view of the above, finding no merit therein, the grievance soughtto be raised by the assessee by way of ground no.1, ground no.1 isrejected. Ground No.2 was not pressed. Even if it had been otherwise,sending the matter back would have not served any purpose.” Now to answer the two questions we do not find that in the factsand circumstances of the instant case as stated hereinbefore, the learnedIncome Tax Appellate Tribunal, Agra Bench, was not legally correct inits view that the assessee did not submit evidence or material at allbefore the lower Income Tax authorities in support of its claims for thedeductions relating to, operating expenses, the cash deposit in bank andagricultural income. We are also of the view that the learned Income Tax AppellateTribunal, Agra Bench, was legally and judicially justified in its findingsafter taking note of all materials that were placed before it by theassessee. The judgment and order dated 12.03.2018, passed by the learnedIncome Tax Appellate Tribunal, Agra Bench, therefore, does not warrantany interference and the two questions are answered in favour of theRevenue, accordingly. The appeal stands disposed of accordingly. Order Date :- 14.1.2020Pravin / Neeraj (Biswanath Somadder,J.) (Ajay Bhanot,J.)