TAMMI RAJU VEGESNA, HYDERABAD V. INCOME TAX OFFICER, WARD-2, AMALAPURAM

ITA 122/VIZ/2023

AI Insights

The case involves an appeal by Tammi Raju Vegesna against the order of the Ld. CIT(A)-NFAC, which sustained the addition of Rs. 10,50,000 as unexplained cash credit under Section 69A of the Income Tax Act, 1961. The addition was initially made by the Ld. AO following the scrutiny of cash deposits during the demonetization period. The assessee argued that the CIT(A) had passed an ex-parte order without proper opportunity to be heard, leading to the appeal before the Tribunal. The Tribunal found merit in the assessee's plea for a fair hearing and remitted the matter back to the CIT(A) for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128642 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 23-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 09-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 142(1); 143(2); 69A

Judgement Text

आयकर अपीलȣयअͬधकरण, ͪवशाखापटणम “SMC” पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय के सम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./ I.T.A. No.122/Viz/2023 (Ǔनधा[रण वष[ / Assessment Year: 2017-18) Tammi Raju Vegesna, Hyderabad. PAN: AAQPV 7090 R Vs. Income Tax Officer, Ward-2, Amalapuram. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Sri M.V. Prasad, AR Ĥ×याथȸ कȧ ओर से / Respondent by : Sri Sankar Pandi, Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 24/05/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 30/05/2023 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal filed by the assessee against the order of the Ld. CIT(A)-NFAC in DIN & Order No. ITBA/NFAC/S/250/2022- 23/1050800868(1), dated 15/3/2023 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2017-18. 2 2. Brief facts of the case are that the assessee is an individual deriving income under the head ‘Salary / Pension’ has e-filed his return of income for the AY 2017-18 on 05/08/2017 declaring an annual income of Rs. 2,82,640/-. The case was selected for scrutiny under CASS for limited scrutiny to verify the ‘cash deposits during the demonetization period’. Accordingly, notice U/s. 143(2) was issued and served on the assessee on 30/09/2018. Thereafter, notices U/s. 142(1) of the Act dated 14/2/2019 & 27/11/2019 calling for information along with detailed questionnaire were served on the assessee. Vide para 2, the Ld. AO observed that the assessee in his reply dated 24/09/2019 and 19/12/2019 submitted that he was a retired professor of ANGR Agricultural University and getting pension and income from agriculture. However, the assessee has not offered any agricultural income for the FY 2016-17 in the return of income filed nor furnished any corroborating documents in support of his claim. The Ld. AO on perusal of the information received from various bank(s) noted that the assessee made cash deposits into his saving bank account with Union Bank of India, Vedureswaram during the demonetization period to the tune of Rs. 10,50,000/-. The Ld. AO observed in his order that though the assessee was given several opportunities to explain the 3 sources for the said cash deposits with documentary evidence, since the assessee has not complied with any of the notices issued, the Ld. AO invoked the provisions of section 69A of the Act and brought to tax the cash deposits amounting to Rs. 10,50,000/- as unexplained money. Thus, the Ld. AO determined the assessed income at Rs. 13,32,640/-. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). 3. On appeal, the Ld. CIT(A)-NFAC dismissed the appeal of the assessee and sustained the addition made by the Ld. AO. While dismissing the assessee’s appeal, the Ld. CIT(A)-NFAC observed that till the date of passing of the order, the assessee neither filed any response to the notices nor filed written submissions and therefore, the Ld. CIT(A)-NFAC is left with no option but to decide the case on the basis of the material available on record. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal. 4. The assessee has raised the following grounds of appeal: “1. The Ld. First Appell ate Au thority is not justified in deciding the appeal without affording appropri ate opportunity to the appel l ant. 4 2. The Ld. First Appell ate Authority i s not justified in confirming the addi tion of Rs. 10,50,000/- as unexpl ained cash credit U/s. 69A made by the Ld. AO. 3. The Ld. First Appell ate Authority i s not justified in confirming the action of the Ld. AO in making the addi tion of Rs. 10,50,000/- U/s. 69A of the Act and bringing the same to tax U/s. 115BBE of the Act. 4. The Ld. First Appell ate Authority f ail ed to appreci ate the fact th at the appell ant had sufficient sources to expl ain the deposits in bank account. 5. The appell ant reserves his right to add, amend, del ete or substanti ate an y ground or grounds during the course of the hearing.” 5. Before the Tribunal, it is the submission of the assessee that the Ld. CIT (A) has passed ex-parte order without providing an opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the assessee and submitted that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee responded to the notices nor filed any written submissions before the Ld. CIT (A)- NFAC. Therefore, the Ld. CIT (A)-NFAC had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A)-NFAC does not call for any interference. 6. On examining the facts and circumstances of the case, material available on record and on perusing the submissions made before the 5 Tribunal by both the sides, I find that Ld. CIT (A)-NFAC had posted the case on several occasions. However, none appeared on behalf of the assessee before the CIT(A) on the dates of hearing. Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal ex-parte. In this situation, considering the nature of issue involved in the appeal, following the principles of natural justice, considering the prayer of the assessee as well as in the interest of justice, I hereby remit the matter back to the file of Ld. CIT (A)-NFAC in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, I also hereby caution the assessee to promptly co-operate before the Ld. CIT (A)-NFAC in the proceedings failing which the Ld. CIT (A)-NFAC shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly. 7. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove. Pronounced in the open Court on the 30 th May, 2023. Sd/- (दुåवूǽ आर.एल रेɬडी) (DUVVURU RL REDDY) ÛयाǓयकसदèय/JUDICIAL MEMBER Dated :30/05/2023 6 OKK - SPS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee– Tammi Raju Vegesna C/o. Katrapati & Associates, 1-1-298/2/B/3, 1 st Floor, Ashok Nagar, Street No.1, Hyderabad – 500 020. 2. राजèव/The Revenue –Income Tax Officer, Ward-2, College Road, Konkapalli Road, Amalapuram. 3. The Principal Commissioner of Income Tax, 4. आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (Appeals), 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6. गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam