KYC Form is Prima Facie proof for Address of Account Holder: ITAT upholds Addition on Account of Unexplained Cash Deposits [Read Order]

The Ahmedabad Bench Income Tax Appellate Tribunal ( ITAT ) has held that Know Your Customer (KYC) Form is prima facie proof for address of account holder and upholds the addition on account of unexplained cash deposits.

The appellant Sanjaykumar Gangaram Patel, is an individual and has not filed a return of income for the relevant AY. Annual Information Return (AIR) details available with the Income-tax Department revealed that the assessee has made cash deposits of Rs.13,25,490/- and Rs.58,61,400/- in bank account. As the assessee has not filed return of income, the assessment was reopened and notice u/s 148 was issued against the appellant. The assessee has not responded to notices, and not even filed return of income pursuant to 148 notice, the AO added a sum of Rs.71,86,890/- on account of unexplained cash deposits and completed assessment by passing an ex parte assessment order. The CIT (A) confirmed the assessment and the aggrieved, the assessee filed an appeal before ITAT.

Mr. S.V. Agrawal, counsel for the appellant relying on the decision of the High Court of Chhattisgarh in the case of Arden Steel Ltd. Vs. ACIT, submitted that the address given in the 148 notice is not correct address and notice served to his wife was not valid service of notice, hence the entire assessment order liable to be quashed. The Appellant further submitted that mere cash deposits cannot be said to be the income of an assessee, and further address given in the bank account does not belong to the appellant.

Mr. S.S. Shukla, counsel appearing for the revenue submitted that 148-notice issued was received by the wife of the appellant by affixing her signature as well her cell-phone number. The appellant’s wife is an adult member of his family and whenever notice is being issued in the absence of the appellant, notices are served to the adult family members, which is deemed to be proper service of notice.

The Tribunal observed that the notice is received by the appellant’s wife by subscribing her signature as well as cell-phone number. Further, 148-notice was issued at the same address as shown in Forms no.35 and 36 filed by the appellant. Therefore, the appellant’s claim that notice remained unserved on him is without any basis.

The Coram of Mr. Pramod M. Jagtap, Vice President, and Mr. T.R. Senthil Kumar, Judicial Member has observed that the Bank Manager

furnished visible photo of the account holder and KYC forms, which prima facie establish that account holder was present at the time of opening of the bank account, and it is crystal clear that the appellant is the same person, who is holding two bank accounts jointly with his wife.

The Tribunal has held “we hold that grounds raised by the assessee are hereby rejected, and the appeal of the assessee is hereby dismissed”.

To Read the full text of the Order CLICK HERE

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