ITO, Ward-1, Kurnool, Kurnool V. Syed Abbas Miah, Kurnool, Kurnool

ITA 1049/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2482 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 22-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained cash credit; Salary income; Principle of natural justice; Additional evidence; Assessment record
• Section: 142(1); 144

Judgement Text

ITA NO 1049 AND CO 56 OF 2016 SYED ABBAS MIAH KURNOOL PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI K. NARSIMHA CHARRY, JUDICIAL MEMBER ITA NO.1049/HYD/2016 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER WARD-1, KURNOOL VS SHRI SYED ABBAS MIAH KURNOOL PAN: AVXPS 6081 K (APPELLANT) (RESPONDENT) C.O. NO.56/HYD/2016 (ARISING OUT OF ITA NO.1049/HYD/2016) A.Y. 2011-12 SHRI SYED ABBAS MIAH, KURNOOL PAN: AVXPS 6081 K VS INCOME TAX OFFICER WARD-1, KURNOOL (APPELLANT) (RESPONDENT) FOR REVENUE : SMT. S. PRAVEENA, DR FOR ASSESSEE : SHRI S. RAMA RAO O R D E R PER INTURI RAMA RAO, A.M. THIS IS APPEAL FILED BY REVENUE DIRECTED AGAINST TH E ORDER OF THE LEARNED CIT (A) KURNOOL, DATED 29.04.2 016 FOR THE A.Y 2011-12. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION OF RS.1,51,98,000 MADE TOWARDS UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNTS. DATE OF HEARING : 29.05.2017 DATE OF PRONOUNCEMENT : 02.06.2017 ITA NO 1049 AND CO 56 OF 2016 SYED ABBAS MIAH KURNOOL PAGE 2 OF 6 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) ERRED IN DELETING THE ADDITION OF RS.1,53,58,600 MADE TOWARDS UNEXPLAINED CREDITS . 2. BRIEF FACTS OF THE CASE ARE THAT THE RESPONDENT ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY, BUSIN ESS AND OTHER SOURCES. HE FILED RETURN OF INCOME FOR THE A.Y 2011- 12 ON 31.8.2011, ADMITTING AN INCOME OF RS.3,80,880 AND A GRICULTURAL INCOME OF RS.1,60,000. AGAINST THE SAID RETURN OF I NCOME, THE ASSESSMENT WAS COMPLETED BY THE INCOME TAX OFFICER WARD-1 KURNOOL U/S 144 OF THE ACT, VIDE ORDER DATED 23.4.2 014. ACCORDING TO THE AO, THE RESPONDENT ASSESSEE HAD NOT RESPONDE D TO THE NOTICES ISSUED U/S 142(1) AND 143(2) AND NOT FILED ANY INFORMATION OR EXPLANATION TO THE QUESTIONNAIRE DAT ED 30.09.2013 ISSUED BY THE AO. THEREFORE, THE AO HAD DRAWN INFER ENCE THAT THE CASH DEPOSITS APPEARING IN THE FOLLOWING ACCOUNTS A RE UNEXPLAINED CASH DEPOSITS: I) ORIENTAL BANK OF COMMERCE, KURNOOL A/C NO.09922011003195 OF RS.45,80,300 II) ORIENTAL BANK OF COMMERCE, KURNOOL A/C NO.099201131000381 OF RS.40,18,000 III) ORIENTAL BANK OF COMMERCE, HIMAYATNAGAR, HYDERABAD A/C NO.11112191001028 OF RS.25,40,000 IV) BANK OF BARODA, KURNOOL A/C NO.24210200000029 O F RS.40,60,000 THUS, HE BROUGHT THE ENTIRE CASH DEPOSITS MADE INTO THE ABOVE ACCOUNTS TO TAX. SIMILARLY, THE AO HAS STATED THAT THE RESPONDENT ASSESSEE HAD FAILED TO FILE THE CLARIFICATION IN RE SPECT OF SUNDRY CREDITORS APPEARING IN THE BALANCE SHEET AS ON 31.0 3.2011, ON FAILURE OF ASSESSEE TO COMPLY WITH NOTICES, AO HELD THAT ALL THE SUNDRY CREDITORS ARE NOT VERIFIABLE AND NOT GENUINE . THEREFORE, HE ITA NO 1049 AND CO 56 OF 2016 SYED ABBAS MIAH KURNOOL PAGE 3 OF 6 BROUGHT TO TAX AN AMOUNT OF RS.1,53,58,600 AS UNEXP LAINED CREDITS. 3. BEING AGGRIEVED, AN APPEAL WAS FILED BEFORE THE LEARNED CIT (A) WHO VIDE THE IMPUGNED ORDER ALLOWED THE APP EAL BY OBSERVING THAT THE RESPONDENT ASSESSEE HAD COMPLIED WITH THE NOTICES AND FILED THE REQUISITE INFORMATION IN RESP ONSE TO THE NOTICES ISSUED BY THE AO. HE FURTHER OBSERVED THAT THE AO INSTEAD OF EXAMINING THE DETAILS FILED BY THE RESPONDENT AS SESSEE HAD BRUSHED ASIDE THE STATEMENTS SIMPLY ADDED BACK ALL THE BANK DEPOSITS, SUNDRY CREDITORS BY PASSING AN EX-PARTE A SSESSMENT ORDER. THEREFORE, HE DIRECTED THE DELETION OF THE E NTIRE ADDITION MADE BY THE AO. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 4. THE LEARNED DR VEHEMENTLY CONTESTED THAT THE LEA RNED CIT (A) OUGHT NOT TO HAVE GRANTED RELIEF BY CONSIDE RING THE ADDITIONAL EVIDENCE WITHOUT AFFORDING AN OPPORTUNIT Y OF BEING HEARD TO THE AO. THUS SHE PRAYED THAT THE IMPUGNED ORDER IS PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATU RAL JUSTICE AND PRAYED THAT THE ORDER OF THE LEARNED CIT (A) BE CAN CELLED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE CIT (A) AFTER DULY EXAMINING THE ASSESSMENT REC ORDS HAD COME TO A CONCLUSION THAT NO ADDITIONAL EVIDENCE WAS FIL ED BEFORE HIM AND THE NOTICES ISSUED BY THE AO ARE DULY COMPLIED WITH BY SUBMITTING THE REQUISITE INFORMATION AND EVIDENCE I N SUPPORT OF THE RETURN OF INCOME. THEREFORE, HE SUBMITTED THAT THE FINDINGS OF THE LEARNED CIT (A) IS NOT PERVERSE FINDING AND IS PASSED AFTER ITA NO 1049 AND CO 56 OF 2016 SYED ABBAS MIAH KURNOOL PAGE 4 OF 6 PROPER APPRECIATION OF THE EVIDENCE ON RECORD. THUS , HE PRAYED THAT THE ORDER OF THE CIT (A) MAY BE SUSTAINED. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE AO MAD E A CATEGORICAL STATEMENT IN THE ASSESSMENT ORDER THAT THE RESPONDE NT ASSESSEE HAD NOT RESPONDED NOR COMPLIED WITH THE SEVERAL NOT ICES ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NOTHIN G IS DISCERNIBLE FROM THE ASSESSMENT RECORDS THAT THE RE SPONDENT ASSESSEE HAD DULY RESPONDED OR COMPLIED WITH THE NO TICES ISSUED U/S 143(2) AND 142(1) OF THE ACT. IN THE ABSENCE OF ANY EVIDENCE CONTROVERTING THE FINDINGS OF THE AO, THE CIT (A) O UGHT NOT TO HAVE OBSERVED THAT THE ASSESSEE HAD COMPLIED WITH ALL TH E NOTICES, HAD FILED THE REQUISITE INFORMATION BEFORE THE AO. THE ORDER OF THE CIT (A) RESTS ON THE PREMISE THAT AO HAD NOT UNDERTAKEN ANY VERIFICATION OF THE DETAILS FILED BEFORE HIM, HE SI MPLY BRUSHED ASIDE THE INFORMATION FILED BY THE RESPONDENT ASSESSEE AN D CONCLUDED AND COMPLETED THE ASSESSMENT BY MAKING THE ADDITION ON ACCOUNT OF CASH DEPOSITS MADE IN THE BANK ACCOUNTS TREATING AS UNREALISTIC AND TREATING THE SUNDRY CREDITORS AS FI CTITIOUS. THIS FINDING OF THE CIT (A) IS NOT BORNE OUT OF THE RECO RD NOR BASED ON EVIDENCE ON RECORD. THE CIT (A) FAILED TO PASS A RE ASONED AND SPEAKING ORDER IN SUPPORT OF THE SOURCES ON THE CAS H DEPOSITS MADE OR TO SAY THAT THE SUNDRY CREDITORS ARE GENUIN E. THEREFORE, EVEN ASSUMING THAT THE RESPONDENT ASSESSEE HAD FILE D ADDITIONAL EVIDENCE BEFORE THE CIT (A) IN SUPPORT OF THE SOURC ES FOR CASH DEPOSITS OR PROVING THE GENUINENESS OF THE SUNDRY C REDITORS, THE LEARNED CIT (A) OUGHT TO HAVE GIVEN AN OPPORTUNITY OF REBUTTING THE SAME TO THE AO IN TERMS OF RULE 46A OF INCOME T AX RULES, ITA NO 1049 AND CO 56 OF 2016 SYED ABBAS MIAH KURNOOL PAGE 5 OF 6 1962. THE PROVISIONS OF RULE 46A ARE FRAMED ONLY IS PART OF THE PRINCIPLES OF NATURAL JUSTICE, EVEN IN THE ABSENCE OF RULE 46A, KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE, THE CIT (A) IS DUTY BOUND TO AFFORD AN OPPORTUNITY OF REBUTTING TH E ADDITIONAL EVIDENCE TO THE AO. THE CIT (A) OUGHT TO HAVE AFFOR DED BOTH AN OPPORTUNITY TO OPPOSE IT AND TO TEST THE ADDITIONAL EVIDENCE OR PRODUCE EVIDENCE IN REBUTTAL. THEREFORE, THESE FACT S GOES TO PROVE THAT THE ORDER PASSED BY THE CIT (A) IS IN GROSS VI OLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND THIS ORDER CANNOT BE SUSTAINED IN THE EYES OF LAW. HENCE THIS ORDER OF THE CIT (APPEA LS) CANNOT BE SUSTAINED. 7. IN THE RESULT, REVENUES APPEAL IS ALLOWED. 8. WITH REGARD TO THE CROSS OBJECTION FILED BY THE ASSESSEE, SINCE WE HAVE ALREADY ALLOWED THE APPEAL FILED BY THE REVENUE, THE CROSS OBJECTION FILED BY THE ASSESSEE WHICH IS IN SEPARATE ORDER OF THE CIT (A) NEED NO ADJUDICATION AND HENCE DISMISSED. 9. IN THE RESULT, REVENUES APPEAL IS ALLOWED WHILE THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND JUNE, 2017. SD/- SD/- (K. NARSIMHA CHARRY) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER HYDERABAD, DATED 2 ND JUNE, 2017. VINODAN/SPS COPY TO: ITA NO 1049 AND CO 56 OF 2016 SYED ABBAS MIAH KURNOOL PAGE 6 OF 6 1 INCOME TAX OFFICER WARD 1, O/O ADD. CIT, AAYAKAR BHAVAN, OPP: CHILDREN PARK, N/R. PETA, KURNOOL 2 SRI SYED ABBAS MIAH, 40-310-1, 2 ND FLOOR, BELLARY ROAD, OPP: BALAJI HOTEL, KURNOOL 3 CIT (A)-KURNOOL 4 PR. CIT - KURNOOL 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER