Late Patel Krishna Sagar Reddy, Rep. By L/R. P. Aparna , Kurnool V. Income Tax Offcer, Ward-2, Kurnool

ITA 1117/Hyd/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2363 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRISIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1117/HYD/2017 ASSESSMENT YEAR: 2009-10 SRI PATEL KRISHNA SAGAR REDDY, (LEGAL REPRESENTATIVE: SMT. P. APARNA W/O. LATE SRI PATEL KRISHNA SAGAR REDDY), KURNOOL. PAN AIMPR6354G VS. THE INCOME TAX OFFICER WARD-2, KURNOOL. (APPELLANT) (RESPONDENT) ASSESSEE BY : SRI SATYANARAYANA MURTHY REVENUE B BY : SMT. N. SWAPNA DATE OF HEARING : 21-11-2017 DATE OF PRONOUNCEMENT : 29-11-2017 ORDER PER SHRI B. RAMAKOTAIAH: THIS APPEAL IS FILED BY LEGAL REPRESENTATIVE SMT P. APARNA, KURNOOL, W/O LATE SHRI PATEL KRISHNA SAGAR REDDY, KURNOOL, AGAINST THE ORDER OF CIT(A), KURNOOL DATED 18.04.2017. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THE APPEAL, GROUND NOS. 2 TO 5 IS AS UNDER: 2. THE HONBLE COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN DECIDING THE MATTER EX-PARTE AND HE SHOULD HAVE GIVEN ANOTHER OPPORTUNITY TO THE APPELLANT TO REPRESENT THE MATTER. 2 ITA NO. 1117/HYD/2017 3. THE HON'BLE COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN SUSTAINING THE ADDITION BY WAY OF ESTIMATE OF INCOME OF RS.7,10,155/-, ESTIMATED AT 8% ON RS. 88,76,940/-. 4. THE HON'BLE COMMISSIONER OF INCOME TAX ERRED IN ADOPTING THE AMOUNT OF RS. 88,76,940/- AS TURNOVER OF THE APPELLANT FOR THE PURPOSE OF ESTIMATE. HE SHOULD HAVE APPRECIATED THAT SOME OF THE CASH DEPOSITS IN BANK ACCOUNT REPRESENT OTHER DEPOSITS WHICH CANNOT BE TREATED AS TURNOVER OF THE APPELLANT. 5. THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN ESTIMATING THE INCOME AT 8% WHEREAS IT SHOULD HAVE BEEN ONLY 5% AS PER SECTION 44AF OF THE INCOME TAX ACT. GROUND NO.1 IS GENERAL IN NATURE. 3. BRIEFLY STATED, SHRI LATE PATEL KRISHNA SAGAR REDDY WAS DOING SOME CONTRACT WORKS AND HAS OFFERED INCOME AT RS. 1,80,130/-. A.O REJECTING THE BOOKS OF ACCOUNT, ESTIMATED THE PROFIT @ 8% OF THE TOTAL DEPOSITS IN THE BANK AND DETERMINED THE TOTAL INCOME AT RS. 7,10,155/-. ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), QUESTIONING THE TURNOVER AS WELL AS THE RATE OF PROFIT ADOPTED BY A.O. LD. CIT(A) IN HIS ORDER REJECTED THE CONTENTIONS, AS NONE APPEARED ON BEHALF OF ASSESSEE, AND DISMISSED THE APPEAL OF THE ASSESSEE. HENCE, THE PRESENT APPEAL IS BEFORE US. 4. LD. COUNSEL BROUGHT TO THE NOTICE OF THE BENCH THAT THE ASSESSEE HAS EXPIRED ON 22-03-2015 AND NONE APPEARED ON BEHALF OF ASSESSEE BEFORE THE CIT(A), AS NOTICES WERE NOT RECEIVED BY THE WIFE OF ASSESSEE OR SHE COULD NOT ATTEND AS SHE WAS ILLITERATE. IN THIS CONTEXT, IT WAS SUBMITTED THAT THE MATTER CAN BE RESTORED TO THE FILE OF THE CIT(A) FOR EXAMINING THE CONTENTIONS AFTER TAKING WIFE OF 3 ITA NO. 1117/HYD/2017 THE ASSESSEE AS LEGAL REPRESENTATIVE. LD. DR HOWEVER, HAS NOT OBJECTED TO RESTORING THE MATTER TO THE CIT(A). 5. WE HAVE CONSIDERED THE REQUEST AND PERUSED THE ORDER OF CIT(A). LD. CIT(A) RECORDED THE FACTS VIDE PARA 4 OF HIS ORDER, WHICH IS AS UNDER; 4. IN THIS CASE NOTICE OF HEARING WAS ISSUED TO THE APPELLANT TO APPEAR IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE ON 19.11.2015. IN RESPONSE TO THE NOTICE ISSUE, THE APPELLANTS WIFE FILED AN ADJOURNMENT LETTER BY STATING THAT THE APPELLANT WAS EXPIRED ON 22.03.2015 AND REQUESTED TO ADJOURN THE CASE. ANOTHER NOTICE WAS ISSUED TO THE APPELLANT FIXING DATE OF HEARING ON 06.10.2016. THERE WAS NO RESPONSE. AGAIN, THE CASE WAS POSTED FOR HEARING ON 06.12.2016. NONE APPEARED. FURTHER NOTICES WERE ISSUED TO THE APPELLANT TO APPEAR ON 11.01.2017 AND 12.04.2017. THE APPELLANT NEITHER APPEARED NOR FILED SUBMISSIONS. IT IS A MATTER OF REGRET THAT THE APPELLANT HAS NOT CHOSEN TO AVAIL THE MULTIPLE OPPORTUNITIES OF NATURAL JUSTICE GIVEN AND HAS NOT BOTHERED TO APPEAR ON THE FIVE OCCASIONS. IT APPEARS THAT APPELLANT IS NOT KEEN TO PURSUE HIS APPEAL. THEREFORE, THE APPEAL IS ADJUDICATED BASED ON THE INFORMATION ON RECORD. 6. IT IS INCUMBENT ON THE CIT(A) THAT ONCE IT WAS INFORMED THAT ASSESSEE WAS NO LONGER ALIVE AND HAS EXPIRED, HE SHOULD INITIATE STEPS TO TAKE THE LEGAL HEIRS ON RECORD, SO THAT THE PROCEEDINGS CAN CONTINUE. WE ARE SURPRISED TO NOTE THAT HAVING COME TO KNOW THAT ASSESSEE HAS EXPIRED BY THE LETTER OF THE ASSESSEES WIFE IN RESPONSE TO THE NOTICE ISSUED SEEKING ADJOURNMENT ON 19-11-2015, INSTEAD TO TAKING THE PROCEDURE FOR BRINGING LR ON RECORD, LD. CIT(A) WENT ON ISSUING THE NOTICES TO THE DECEASED PERSON IN HIS NAME AND DISMISSED THE APPEAL FOR NON- APPEARANCE. 4 ITA NO. 1117/HYD/2017 7. SINCE THE ORDER PASSED BY CIT(A) ON A DECEASED PERSON CANNOT BE UPHELD AS SUCH, WE HAVE NO OPTION THAN TO SET ASIDE THE ORDER OF CIT(A) WITH A DIRECTION TO TAKE THE LEGAL HEIR(S) ON RECORD AND PASS FRESH ORDER AFTER CONSIDERING THE MERITS OF THE ISSUE AS WELL. SINCE THE MATTER IS RESTORED TO THE FILE OF THE CIT(A), THERE IS NO NEED TO ADJUDICATE THE ISSUE ON MERITS BY THIS FORUM. WITH THESE DIRECTIONS, THE ASSESSEES GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2017. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH ) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED: 29 TH NOVEMBER, 2017 KRK 1 SMT P. APARNA C/O VENUGOPAL & CHENOY, CAS, 4-1- 889/162, TILAK ROAD, HYDERABAD 500 001. 2 ITO, WARD- 2, KURNOOL. 3 CIT(A), KURNOOL. 4 PR. CIT, KURNOOL. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE