ITO, Ward-12(3), Range 12, Hyd, Hyderabad V. Nageswara Rao Paladugu, Sec-bad, Secunderabad

ITA 1267/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2331 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 06-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 03-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANJALA SAHU
• Keywords: Salary income; Opportunity of being heard; Principle of natural justice
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A: HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.1267/HYD/2016 (ASSESSMENT YEAR 2011-2012) INCOME TAX OFFICER, WARD-12(3), HYDERABAD. VS. SRI NAGESWARA RAO, PALADUGU, PLOT NO.84, MANISAL ENCLAVE, SAINIKPURI, SECUNDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE: NONE FOR REVENUE : SMT. ANJALA SAHU, DR DATE OF HEARING : 06 .07.2017 DATE OF PRONOUNCEMENT : 26 .07.2017 ORDER PER S. RIAFAR RAHMAN, A .M. THIS APPEAL FILED BY THE REVENUE ON 03.10.2016 IS A GAINST THE ORDER OF THE CIT (A)-1, HYDERABAD DATED 27.04.2016 FOR TH E ASSESSMENT YEAR 2011-2012. IN THIS APPEAL, REVENUE RAISED THREE GR OUNDS IN TOTO AND THE ONLY EFFECTIVE GROUND IS GROUND NO.2, WHICH READS A S UNDER:- 2. THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON OF RS. 39,37,700/- TOWARDS UNEXPLAINED CASH DEPOSITS BY RELYING ON ADD ITIONAL EVIDENCES WITHOUT CONFRONTING THEM TO THE ASSESSING OFFICER I S CLEAR VIOLATION OF RULE 46(A) OF THE INCOME TAX ACT, 1961. 2. AT THE OUTSET, LD. DR SUBMITTED THAT THERE IS A DELAY OF 69 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. IN THIS REGA RD, HE BROUGHT OUR ATTENTION TO THE AFFIDAVIT FILED BY THE ITO, WARD 12(3), DATE D 03.10.2016 AND SUBMITTED THAT THE RELEVANT RECORD PERTAINING TO TH E INSTANT APPEAL HAS BEEN MIXED UP WITH THE OTHER RECORD AND THEREFORE, SOME TIME HAS BEEN ELAPSED FOR TRACING THE RELEVANT RECORD, RESULTANTLY, THERE WAS A DELAY IN FILING THE APPEAL BEFORE TRIBUNAL WITHIN THE STIPULATED TIME ( PARA 2 OF THE SAID AFFIDAVIT IS RELEVANT). HE FURTHER SUBMITTED THAT SINCE THER E IS A REASONABLE AND 2 ITA NO. 1267/HYD/16 NAGESWARA RAO PALADUGU, SECBAD SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE TRIBUNAL, THE DELAY OF 69 DAYS MAY BE CONDONED. 3. AFTER HEARING THE LD DR AND ON PERUSAL OF THE SA ID AFFIDAVIT (SUPRA), WE FIND, THERE IS A SUFFICIENT CAUSE FOR NOT FILI NG THE APPEAL BEFORE THE TRIBUNAL WITHIN THE PRESCRIBED TIME LIMIT AND THE S AME IS SUPPORTED BY THE AFFIDAVIT. THEREFORE, IN OUR VIEW, IT IS A FIT CAS E TO CONDONE THE DELAY. ACCORDINGLY, THE DELAY IS CONDONED AND ADMIT THE AP PEAL FOR ADJUDICATION, ON MERITS. 4. BRIEFLY RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL, IS AN EMPLOYEE AND DERIVES INCOME FROM SALARY. F OR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSESSEE FILED THE RETURN OF I NCOME DECLARING THE TOTAL INCOME OF RS. 10,84,530/-. IN THIS CASE, THOUGH TH E NOTICE U/S 142(1) WAS SERVED ON THE ASSESSEE FROM TIME TO TIME, THERE WAS NO COMPLIANCE FROM THE ASSESSEE, AND THE A.O. PROCEEDED TO COMPLETE TH E ASSESSMENT EX-PARTE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. ACCO RDINGLY, A.O. RESORTED TO BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT AND D ETERMINED THE TOTAL INCOME AT RS. 55,63,780/-. IN THE ASSESSMENT, A.O. NOTICED THAT THE ASSESSEE MADE DEPOSITS TOTALLING TO RS. 39,37,700/- IN HIS SAVING BANK ACCOUNTS WITH ICICI BANK AND ING. VYSYA BANK (RS.21 ,85,700/- IN ICICI AND RS. 17,52,000/- IN ING. VYSYA). WHEN THE AO ASKED THE ASSESSEE TO FURNISH THE RELEVANT DETAILS OF THE DEPOSITS, THERE WAS NO REPLY/RESPONSE FROM THE ASSESSEE AND A.O. PROCEEDED TO MAKE ADDITION OF RS . 39,37,700/- TREATING THE DEPOSITS AS UNEXPLAINED CASH DEPOSITS. 5. AGGRIEVED WITH THE ORDER OF THE A.O., ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 6. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY, ASSESSEE CONTENDED THAT THE BEST JUDGEMENT ASSESSMENT MADE B Y THE A.O. U/S 144 OF THE ACT IS NOT JUSTIFIED IN ACCORDANCE WITH LAW SINCE, THE SAME IS BASED ON THE GROSS RECEIPTS IN THE ASSESSEES BANK STATEM ENT. ASSESSEE ALSO RAISED THE ISSUE RELATING TO THE SERVICE OF NOTICE TO THE ADDRESS MENTIONED IN THE 3 ITA NO. 1267/HYD/16 NAGESWARA RAO PALADUGU, SECBAD RETURN OF INCOME. BEFORE THE CIT (A), IN RESPECT OF THE CASH DEPOSITS, ASSESSEE SUBMITTED THAT A SUM OF RS. 22,50,000/- WA S RECEIVED BY THE ASSESSEE ON ACCOUNT OF REFUND FROM APIIC FOR WITHDR AWAL OF OFFER OF ALLOTMENT OF LAND. ASSESSEE FURTHER SUBMITTED THAT AN AMOUNT OF RS. 9,50,000/- RELATES TO THE AGRICULTURAL INCOME OF TH E ASSESSEES PARENTS, WHICH WAS DEPOSITED IN THE ASSESSEES BANK ACCOUNT. AND THE BALANCE OF RS. 7,50,000/- WAS THE SALARY SAVINGS OF THE ASSESS EE. IN SUPPORT OF HIS EXPLANATION, ASSESSEE ALSO SUBMITTED THE CONFIRMATI ON CERTIFICATE FROM THE CONCERNED GOVERNMENT OFFICIALS. 7. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E AND ON PERUSAL OF THE EVIDENCES, IN SUPPORT OF THE CASH DEPOSITS, SUB MITTED BY THE ASSESSEE, CIT (A) GRANTED RELIEF TO THE ASSESSEE AND ALLOWED THE APPEAL. 8. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), REVENUE IS IN APPEAL BEFORE US. 6. NONE APPEARED ON BEHALF OF THE RESPONDENT-ASSESS EE AT THE TIME OF HEARING OF THIS APPEAL. 7. BEFORE US, LD. DR RELIED HEAVILY ON THE ORDER O F THE A.O. AND SUBMITTED THAT THE DECISION TAKEN BY THE A.O. IS CO RRECT SINCE, THE A.O. RESORTED TO BEST JUDGMENT ASSESSMENT U/S 144 OF T HE ACT AS THERE WAS NO COMPLIANCE FROM THE ASSESSEE TO THE STATUTORY NOTIC ES. SHE FURTHER SUBMITTED THAT THE ONUS IS ON THE ASSESSEE TO FURNI SH THE RELEVANT RECORD BEFORE THE A.O. REFERRING TO THE ORDER OF THE CIT (A), LD. DR SUBMITTED THAT THE FIRST APPELLATE AUTHORITY OUGHT TO HAVE RE MANDED THE EVIDENCES SUBMITTED BEFORE HIM TO VERIFY THE GENUINENESS OF T HE SAME AND IN THE ABSENCE OF THE SAME, IT AMOUNTS TO VIOLATION OF THE PROVISIONS OF RULE 46(A) OF THE IT RULES, 1962. THEREFORE, LD. DR SUBMITTED THAT THE ISSUE MAY BE REMANDED TO THE FILE OF THE A.O. FOR VERIFICATION A ND GENUINENESS OF THE EVIDENCES SUBMITTED BEFORE THE CIT (A). 4 ITA NO. 1267/HYD/16 NAGESWARA RAO PALADUGU, SECBAD 7. CONSIDERED THE SUBMISSIONS MADE BY THE LD DR AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDERS OF THE REV ENUE AUTHORITIES. ON PERUSAL OF THE RECORD, WE FIND THAT THE A.O. PASSED EX-PARTE ASSESSMENT ORDER U/S 144 OF THE ACT AND WHEN THE MATTER WENT O N APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, ASSESSEE MADE SUBMISSION S ALONG WITH EVIDENCES IN RESPECT OF THE ADDITION MADE BY THE A.O. ON ACCO UNT OF UNEXPLAINED CASH DEPOSITS AND THE ASSESSEE WAS GRANTED RELIEF. IN S UCH CASE, WE ARE OF THE OPINION, ACCORDING TO THE PROVISIONS OF RULE 46(A) OF THE IT RULES, 1962, MATTER IS REQUIRED TO BE REMANDED TO THE FILE OF TH E A.O. FOR VERIFICATION AND GENUINENESS OF THE EVIDENCES / SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT (A) AS THERE WAS NO OCCASION FOR THE AO TO EXAMINE THE EVIDENCES SUBMITTED BEFORE THE CIT(A) FOR THE FIRST TIME. AC CORDINGLY, WE REMAND THE MATTER TO THE FILE OF THE A.O. TO DECIDE THE ISSUE AFRESH AFTER VERIFYING THE GENUINENESS / CORRECTNESS OF THE ASSESSEES SUBMISS IONS. A.O. SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE AS PER THE PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY, 2017. SD/- SD/- (P. MADHAVI DEVI) (S. RIAFAR RAHMAN) JUDICIAL MEMBER ACOUNTANT MEMBER HYDERABAD, DATED: 26 TH JULY, 2017 OKK, SR.PS 5 ITA NO. 1267/HYD/16 NAGESWARA RAO PALADUGU, SECBAD COPY TO 1. SRI NAGESWARA RAO, PALADUGU, PLOT NO.84, MANISAL ENCLAVE, SAINIKPURI, SECUNDERABAD. 2. INCOME TAX OFFICER, WARD - 12(3), HYDERABAD. 3. CIT (A) - 1, HYDERABAD. 4. PR. CIT - 1, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE