GUDAPATI BALAKRISHNA,RAICHUR V. ITO, WARD-1, RAICHUR

ITA 1411/BANG/2024

AI Insights

The case involves Gudapati Balakrishna, the appellant, contesting an order from the CIT(Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2017-18. The primary contention revolves around the jurisdiction of the Income Tax Officer, Ward 14(1) Hyderabad, who issued a notice under section 148 of the Income Tax Act, 1961, claiming that income chargeable to tax had escaped assessment. The appellant argued that the jurisdiction for cases with income above Rs. 20 lakhs lies with the Assistant Commissioner or Deputy Commissioner of Income Tax, not the Income Tax Officer. Additionally, the appellant contested the assessment made under sections 144 r.w.s. 147 and 69A of the Act, claiming the bank account in question did not belong to him and that the deposits were from a partnership firm he was associated with, not personal funds.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24911 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 26-07-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M. CHANDRAMOULESWARA RAO
• Keywords: Reassessment proceedings
• Section: 144; 69A; 139; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., VICE PRESIDENT AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.1411/Bang/2024 Assessment year : 2017-18 Gudapati Balakrishna, Balayya Camp – 584 143. Raichur Road. PAN: ATSPG 3562C Vs. The Income Tax Officer, Ward-1, Raichur. APPELLANT RESPONDENT Appellant by : Shri M. Chandramouleswara Rao, CA Respondent by : Ms. Neha Sahay, Jt.CIT(DR)(ITAT), Bengaluru. Date of hearing : 09.10.2024 Date of Pronouncement : 23.10.2024 O R D E R Per Laxmi Prasad Sahu, Accountant Member This appeal is filed by the assessee against the order dated 07.06.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18 on the following grounds:- “ 1. The appellate order passed by the Ld. NFAC/CIT(A) is erroneous and bad both on facts and in law. 2. On the facts and in the circumstances of the case in law the Ld. NFAC/CIT(A) has ought to have appreciated the fact that the Ld. Ld. Income tax Officer, Ward 14(1) Hyderabad has wrongly issued notice under 148 as the alleged income ITA No.1411/Bang/2024 Page 2 of 5 chargeable to tax escaped assessment is above 20 lakhs. As per the CBDT Instructions the jurisdiction over the cases whose income is above Rs. 20 Lakhs vests with Assistant Commissioner or Deputy Commissioner of Income tax and hence the proceedings initiated by the Ld. Income tax Officer, Ward 14(1) Hyderabad is bad in law. 3. On the facts and in the circumstances of the case in law the Ld. NFAC/CIT(A) has erred in sustaining the assessment order passed by the Assessing Officer under section 144 r.w.s. 147 of the I.T. Act, 1961 based on the incorrect and mistaken facts and further the very initiation of the re assessment proceedings on such mistaken facts will make the assessment order bad in law. 4. On the facts and in the circumstances of the case in law the Ld. NFAC/CIT(A) ought to have considered the fact that the bank account wherein alleged cash deposits are made did not belong to the appellant 5. Such other ground or grounds that may be urged during the course of hearing of the appeal” 2. Briefly stated the facts of the case are that the AO noted that as per information with the department the assessee has not filed return of income u/s. 139 and has deposited cash of Rs.1,69,63,416 in his bank account during FY 2016-17. The case was reopened after issuing notice u/s. 148 dated 30.03.2021. In response to notice the assessee filed return declaring income of Rs.3,50,650. Subsequently other statutory notices were issued, but there was no response from the assessee’s side. Further the AO issued show cause notice on 10.03.2022. The assessee failed to comply the show cause notice. Accordingly the AO observe that the assessee has nothing to say in the matter and failed to explain the source of total cash deposits of Rs.1,69,63,416 in his bank account and treated it as income u/s. 69A of ITA No.1411/Bang/2024 Page 3 of 5 the Act after relying on two judgments and passed the order on 28.08.2022. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA) on 16.04.2022. 3. During the appellate proceedings notices for enablement of communication was issued on 16.11.2022, in response the assessee submitted only copy of Form 35 and proof of payment of fee for filing the appeal. Thereafter other two notices were issued on 05.02.2024 and 16.05.2024, however there was no response from assessee’s side. Accordingly the ld. FAA after relying on various judgments dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before the ITAT. 4. The ld. AR reiterated the statement of facts before the FAA and submitted that the money belongs to the partnership firm in which he is a partner and the entire deposits were made in the firm’s bank account out of sale proceeds from its medical distribution business. The current account No.16880200000781 does not belong to the assessee and he has not made any deposits in that account from personal funds. He relied on page 16 of PB which shows the bank statement for proof of ownership of account. He further submitted that during the reassessment proceedings the assessee could not represent the case because of Covid-19 period and there was no malafide intention of the assessee. He requested that if a chance is given to the assessee, he undertook to respond to the notices and substantiate the case of the assessee with evidence before the lower authorities. He also submitted ITA No.1411/Bang/2024 Page 4 of 5 that the ld. CIT(Appeals) has not properly appreciated the submissions made by the assessee. 5. The ld. DR relied on the order of lower authorities and objected to sending back the matter to lower authorities. 6. Considering the rival submissions, we note that there is huge cash deposit in the bank account and accordingly notice was issued u/s. 148 and the assessee did not file return u/s. 139. After issuing notice the assessee filed return of income and there was no response by the assessee to the notices issued by the AO. During the appellate proceedings the assessee has submitted documents which is placed at page 6 to 57 of PB and submitted that the cash deposits belong to the partnership firm and to assessee ex partner. However we note that there is no proof of ownership of bank deposit that it belongs to the partnership firm account submitted before the CIT(Appeals). Since the matter has been decided ex parte by the ld. FAA, therefore considering the facts of the case and in the interest of justice, we remit the issue to the Assessing Officer for fresh consideration and decision as per law. The assessee is directed to file necessary documents that would be essential and required for substantiating his case that the money belongs to the partnership firm and for proper adjudication by the revenue authorities. Needless to say that reasonable opportunity of being heard be given to the assessee. The assessee is directed to cooperate with the proceedings and in case of further default, the assessee shall not be entitled to any leniency. The assessing officer ITA No.1411/Bang/2024 Page 5 of 5 shall be at liberty to re-open assessment in the hands of the partnership firm if he finds that cash deposits are in the bank account of the partnership firm by following time line as per section 150 of the Act and decide the issue as per law. 7. In the result, the appeal by the assessee is allowed for statistical purposes. Pronounced in the open court on this 23rd day of October, 2024. Sd/- Sd/- ( GEORGE GEORGE K. ) (LAXMI PRASAD SAHU ) VICE PRESIDENT ACCOUNTANT MEMBER Bangalore, Dated, the 23rd October, 2024. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "