The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) directed assessment as per Central Board of Direct Taxes (CBDT) guidelines on Cash deposited during demonetization period.
The assessee, Sasanur Hospital, filed return of income clearing total income amounting to ninety-one lakhs. The case was selected for scrutiny under CASS and other statutory notices were issued to the assessee. The Assessing Officer (AO) observed that during demonetization period, the assessee firm had deposited an amount of Two crores in its current account. This includes old and new currency which was deposited daily collections from the hospital.
The AO also observed that there was a delay in payment of employees contribution under Section 36(1)(va) of the Income Tax Act, 1961 and certain other disallowances were made by the AO and completed the assessment. Later on, the Principal Commissioner of Income Tax (Pr CIT) called the assessment records and observed that the AO has not done full enquiry as per the Circular issued by the CBDT, in this regard, specifically in the cash deposited during the demonetization period.
The Counsel for the assessee submitted that the Pr.CIT is not justified in exercising his power under Section erroneous, 263 of the Income Tax Act, 1961. During the course of assessment proceedings all the compliances were made by the assessee in regard to the notice issued by the AO under Section 142(1) of the Income Tax Act, 1961.
The Counsel for the Revenue submitted that the AO has not done proper enquiry as per CBDT guidelines, especially for cash deposited during the demonetization period and he has also not carried out any enquiry in respect of the points pointed out by the Pr.CIT. Therefore, the order passed by the AO is erroneous and prejudicial to the interest of the revenue.
The Coram consisting of Beena Pillai, Judicial Member and Laxmi Prasad Sahu, Accountant Member observed that “We uphold the order passed by the Pr.CIT and the AO is directed make fresh assessment in accordance with law following the CBDT guidelines in regard to cash deposited during the demonetization period.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
