Ram Mohan Rapala , Warangal V. Income Tax Officer, Ward-3, Warangal

ITA 1061/Hyd/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9767 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 25-09-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 28-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: A V RAGHURAM
• Keywords: Principle of natural justice; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES SMC, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1060/HYD/19 2012-13 SRI RAM MOHAN RAPALA, WARANGAL [PAN: AHAPR2964D] INCOME TAX OFFICER, WARD-3, WARANGAL 1061/HYD/19 2013-14 FOR ASSESSEE : SHRI A.V.RAGHU RAM, AR FOR REVENUE : SHRI NILANJAN DEY, DR DATE OF HEARING : 25-09-2019 DATE OF PRONOUNCEMENT : 30-09-2019 O R D E R THESE ARE ASSESSEES APPEALS FOR THE AYS.2012-13 & 2013-14, DIRECTED AGAINST THE ORDER OF THE COMMISSIONE R OF INCOME TAX (APPEALS)3, HYDERABAD, RESPECTIVELY. SIN CE THE ISSUE IS COMMON IN BOTH THESE APPEALS, BOTH ARE HEARD TOGETHER AND ARE DECIDED BY THIS COMMON AND CONSOLIDA TED ORDER. FOR THE SAKE OF CONVENIENCE, APPEAL FOR THE AY .2012-13 IS DISCUSSED HEREUNDER, IN DETAIL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, RUNNING A STATIONERY SHOP UNDER THE NAME A ND STYLE VASUNDHARA BOOKS STATIONERY AND GENERAL STORES , DID NOT FILE HIS RETURN OF INCOME FOR THE AY.2012-13. THE ASSESSING OFFICER (AO) RECEIVED INFORMATION FROM INVESTIGATION WING, UNIT-II, HYDERABAD THAT ASSESSEE HAS MADE HUGE CASH ITA NOS. 1060 & 1061/HYD/2019 :- 2 -: AMOUNTS INTO HIS BANK ACCOUNT. THEREFORE, THE ASSESSEE WAS DIRECTED TO FILE RETURN OF INCOME BY ISSUANCE OF NOTI CE U/S.148 OF THE OF THE INCOME TAX ACT [ACT]. IN REPLY THERE TO, THE ASSESSEE FILED HIS RETURN OF INCOME ON 03-09-2018, DECLARING TOTAL INCOME OF RS.1,80,040/ - FOR THE AY.2012-13, U/S.44AD OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S.14 3(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE HAS DEPOSI TED AN AMOUNT OF RS.5 LAKHS IN CASH IN ICICI BANK ACCOUNT, HANAMKONDA BRANCH, WARANGAL. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES FOR THE DEPOSITS, ASSESSE E SUBMITTED THAT THE DEPOSITS ARE OUT OF ACCUMULATION OF S ALE PROCEEDS I.E., SALE OF BOOKS AND STATIONERY ETC. THE A O, HOWEVER, OBSERVED THAT THE ASSESSEE HAS NOT PROVED THE IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTIONS AND THAT HE HAS NOT FILED ANY SALE DOCUMENTS OR CREDITORS LI ST IN SUPPORT OF HIS CONTENTIONS. HE THEREFORE TREATED THE SUM O F RS.5 LAKHS AS UN-EXPLAINED CASH CREDITS AND BROUGH T IT TO TAX U/S.68 OF THE ACT. 3.1. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A), WHO CONFIRMED THE ORDER OF AO AND ASSESSEE I S IN SECOND APPEAL BEFORE ITAT, RAISING THE FOLLOWING GRO UNDS: 1. THE ORDER OF THE LEARNED CIT (A) IS NOT ONLY ER RONEOUS BUT IS AGAINST PRINCIPLES OF NATURAL JUSTICE. 2. THE LEARNED CIT(A) ERRED IN PASSING THE ORDER, W ITHOUT VERIFYING THE SERVICE OF NOTICE OF HEARING ON THE A SSESSEE. ITA NOS. 1060 & 1061/HYD/2019 :- 3 -: 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE ACTION OF THE AO IN REOPENING OF THE ASSESSMENT U.S.147. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDIT ION OF RS.5,00,000/- MADE BY THE AO AS UNEXPLAINED CASH CR EDITS IGNORING THE SOURCE IN THE FORM OF SALE PROCEEDS WH ICH WAS BROUGHT TO THE NOTICE OF THE AO DURING ASSESSMENT P ROCEEDINGS. (TAX EFFECT - RS.1,54,500) 4. AT THE TIME OF HEARING, LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS PASSED THE APPELLATE O RDER WITHOUT GIVING ANY NOTICE TO THE ASSESSEE. HE THEREFORE PRAYED THAT THE BENCH MAY REMAND THE ISSUE TO THE FILE OF AO, PARTICULARLY BECAUSE, ACCORDING TO THE ASSESSEE, THE SU M OF RS.5 LAKHS DEPOSITED INTO BANK ACCOUNT IS OUT OF SALE PROCEEDS AND THAT HE WILL BE IN A POSITION TO SATISFACTORILY PROD UCE THE RELEVANT DOCUMENTS TO EXPLAIN THE SOURCES OF THE DEPOS ITS TO THE AO. 5. LD.DR WAS ALSO HEARD. 6. I HAVE GONE THROUGH THE FILE AND I FIND THAT THE APPEAL WAS FILED BEFORE THE CIT(A) ON 09-01-2019 AND THE L D.CIT(A) HAS NOT MENTIONED THE DATES OF HEARING GIVEN TO THE ASSES SEE IN THE APPELLATE ORDER, EXCEPT MENTIONING AS PER THE O RDER SHEET AND THE APPEAL WAS DISPOSED-OF ON 17-05-2019. LD.CIT(A) HAS ALSO NOT RECORDED ABOUT THE APPEARANCE O R NON-APPEARANCE OF THE ASSESSEE IN RESPONSE TO THE NOTIC E. THEREFORE, GIVING BENEFIT OF DOUBT TO THE ASSESSEES S TATEMENT THAT THERE WAS NO SERVICE OF NOTICE ON HIM, BEFORE CONC LUSION OF ITA NOS. 1060 & 1061/HYD/2019 :- 4 -: THE APPELLATE PROCEEDINGS, I DEEM IT FIT AND PROPER TO R EMAND THE ISSUE TO THE FILE OF AO FOR VERIFICATION OF THE ASSE SSEES CONTENTIONS AND FOR COMPLETING THE ASSESSMENT PROCEEDING S DENOVO IN ACCORDANCE WITH LAW. ASSESSEE IS ALSO DIRECTED TO APPEAR PERSONALLY BEFORE THE AO AND FILE THE NECESSAR Y DETAILS FOR COMPLETION OF THE ASSESSMENT PROCEEDINGS. 7. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE AY.201 2-13 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. AY.2013-14: 8. SINCE THE FACTS OF THE CASE FOR AY.2013-14 ARE ID ENTICAL TO THE FACTS AND CIRCUMSTANCES IN AY.2012-13 (SUPRA), MY FINDINGS IN THE ABOVE APPEAL, MUTATIS MUTANDIS , WOULD APPLY TO THIS APPEAL AS WELL. HENCE, THIS APPEAL OF ASSESSEE I S ALSO TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. TO SUM-UP, THE APPEALS OF ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2019 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED: 30-09-2019 TNMM ITA NOS. 1060 & 1061/HYD/2019 :- 5 -: COPY TO : 1. SRI RAM MOHAN RAPALA, FLAT NO.610, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. INCOME TAX OFFICER, WARD-3, WARANGAL. 3. CIT(APPEALS)-3, HYDERABAD. 4. PR.CIT-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.