The Uttarakhand High Court remanded an Income Tax matter to the Commissioner of Appeals for re -adjudication since enhancing cash in hand was made without issuing a show cause notice (SCN).
Meetu Bansal, the appellant/assessee has preferred the present appeal against the order dated 21.09.2021, passed by the Income Tax Appellate Tribunal dismissing the appeal preferred by the appellant/assessee against the order dated 11.03.2016, passed by the CIT (Appeals).
The appellant engaged in private coaching and vocational training profession. The appellant earned income from business (profession) and other sources. She filed her Income Tax return for the Assessment Year 2007-08, on 18.03.2008, declaring an income of Rs.1,18,500/-, earned from private coaching and vocational training from her residence. Since the income shown was below Rs. 1.20 lacs, she claimed that she was not required to maintain books of account.
The Income Tax Department carried out a search and seizure operation on 26.04.2012, in respect of the appellant’s husband, including the residential premises of the appellant. Notice was issued to the appellant under Section 153A of the Income Tax Act. In response to the said notice, she submitted her return of income declaring Rs. 1,19,475/-, which included an income of Rs. 1,18,500/-, earlier declared by her in her return, i.e., ITR-4, for the Assessment Year 2007-08. An additional Rs.975/- was made towards income from interest earned on the savings bank account, which had earlier not been included in the returned income.
Notices were issued to the appellant/assessee under Section 153A read with Section 143(3) and Section 142(1) of the Income Tax Act. The appellant filed the return under Section 156A, along with an income statement/balance sheet, on 31.03.2007. The Assessing Officer made the addition of Rs.4,13,500/- by considering the same to be unexplained cash, credited in the books of account.
The Assessing Officer passed the assessment order under Section 153A(1)(b) read with Section 143(3) on 01.09.2014. On appeal, the Commission of Income Tax (Appeals) deleted the addition of Rs.1,50,000/-, being a gift received from the father and enlarged the scope of assessment by enhancing the cash in hand from Rs. 4,13,500/- to Rs. 4,66,500/-, i.e. by adding the original cash in hand, which was declared in return furnished under Section 139, without issuing any show cause notice as mandated under Section 251(2) of the Income Tax Ac
It was evident that a show cause notice was not issued to the assessee by the Commissioner (Appeals), as mandated by Section 251(2) of the Income Tax Act, before enhancing the cash in hand from Rs. 4,13,500/- to Rs. 4,66,500/-.
The two-judge bench comprising Chief Justice Sri Vipin Sanghi and Justice Alok Kumar Verma observed that the appellant/assessee was entitled to put to notice before enhancing the cash in hand, by the Commissioner (Appeals). The matter was remanded to the Commissioner (Appeals) for rehearing of the appeal on the aforesaid issue.
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