Krishna Mohan Sahu., Hyderabad. V. Income Tax Officer, Intl. Taxation-1., Hyderabad

ITA 1343/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2387 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 02-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: NALIN SHAH
• Keywords: Principle of natural justice
• Section: 143(3); 154; 15

Judgement Text

ITA NO 1343 OF 20 17 KRISHNA MOHAN SAHU HYDERABAD. PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1343/HYD/2017 (ASSESSMENT YEAR: 2010-11) DR. KRISHNA MOHAN SAHU HYDERABAD PAN: AJVPS4399A VS INCOME TAX OFFICER (INTERNATIONAL TAXATION)-1 HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI NALIN SHAH FOR REVENUE : SMT. N. SWAPNA, DR O R D E R THIS IS ASSESSEES APPEAL FOR THE A.Y 2010-11AGAINS T THE ORDER OF THE LEARNED CIT (A)-10, HYDERABAD, DAT ED 31.03.2017. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER OF THE LEARNED CIT (A) IS AGAINST TH E PRINCIPLE OF NATURAL JUSTICE AND BAD IN LAW. 2. THE ORDER OF THE LEARNED CIT (A) OUGHT TO HAVE CONDONE THE DELAY OF FILING OF AN APPEAL. 3. THE ORDER OF THE LEARNED CIT (A) OUGHT TO HAVE DELETED THE ADDITIONS MADE BY THE AO. 4. THE ORDER OF THE LEARNED CIT (A) OUGHT TO HAVE CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE. 5. THE ORDER OF THE LEARNED CIT (A) OUGHT TO HAVE CONSIDERED THAT THE AMOUNTS MENTIONED IN FORM 26AS IS TOTAL CONSIDERATION ON SALE OF SHARES AND NOT CAPITAL GAINS OR OTHER INCOME. DATE OF HEARING: 16.03 . 201 8 DATE OF PRONOUNCEMENT: 2 8 . 0 3 .2018 ITA NO 1343 OF 20 17 KRISHNA MOHAN SAHU HYDERABAD. PAGE 2 OF 6 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND AN NRI. HE FILED HIS RETURN OF INCOM E FOR THE A.Y 2010-11 ON 30.03.2011 BY ADMITTING TAXABLE INCOME A T RS.4,29,727. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE HAD ADMI TTED CAPITAL GAIN OF RS.3,21,503 BUT THE DETAILS ABOUT THE PURCH ASE AND SALE OF SOME OF THE SCRIPTS AND THEIR VALUES ARE NOT FUR NISHED. THE ASSESSEE WAS THEREFORE, ASKED TO FILE THE DETAILS O F SHARE TRANSACTIONS. THE ASSESSEE SUBMITTED THE REVISED CO MPUTATION SHEET BY ADMITTING THE CAPITAL GAIN INCOME FROM THE TRANSACTIONS OF SHARES AT RS.6,60,474. THE AO AFTER VERIFYING T HE SAME, BROUGHT THE DIFFERENCE OF THE AMOUNT OF RS.3,38,971 TO TAX. 3. APART FROM THE ABOVE, THE AO ALSO OBSERVED FROM THE RETURN OF INCOME THAT UNDER THE HEAD INCOME FROM O THER SOURCES, THE ASSESSEE HAD ADMITTED INTEREST INCOME OF RS.1,45,458 FROM HDFC BANK WHEREAS AS PER FORM 26AS , THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.8,37,989. THE ASSESSEE WAS THEREFORE, ASKED TO PRODUCE THE DETAILS OF DIFF ERENCE IN THE AMOUNT ADMITTED IN THE RETURN OF INCOME AND THE TDS CERTIFICATES TO THE TUNE OF RS.6,92,531. THE ASSESSEE SUBMITTED ITS REPLY STATING THAT AS PER SECTION 195 OF THE ACT, ANY PAY MENT MADE TO AN NRI ATTRACTS TDS AND HENCE SECURITIES/BROKERAGE FIRMS, DEDUCT TDS AT 10% ON ANY SALE OF SECURITIES AND REMITTED T O HIS ACCOUNT NOTWITHSTANDING WHETHER THE NON-RESIDENT HAS GAINED OR HAS INCURRED LOSS ON SUCH TRANSACTION AND SINCE THE DED UCTION OF TDS, WHETHER ON INTEREST OR ON SALE OF SECURITIES I S DONE U/S 195, IT BECOMES DIFFICULT TO FIGURE OUT AS TO HOW MUCH T DS HAS BEEN FOR INTEREST AND HOW MUCH IS FOR THE OTHERS. OBSERVING THAT THE ITA NO 1343 OF 20 17 KRISHNA MOHAN SAHU HYDERABAD. PAGE 3 OF 6 ASSESSEE HAS FAILED TO PRODUCE ANY INFORMATION FOR THE DIFFERENCE IN THE AMOUNTS EXCEPT FOR FILING THE ABOVE REPLY, T HE AO BROUGHT THE DIFFERENCE AMOUNT OF RS.6,92,531 ALSO TO TAX. 4. FURTHER, ON EXAMINING THE BANK A/C STATEMENT OF THE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE HAS REC EIVED AN AMOUNT OF RS.91,097 AS INTEREST FROM VARIOUS BANKS BUT THE ASSESSEE HAS FAILED TO ADMIT THE SAME IN HIS RETURN OF INCOME. THEREFORE, HE BROUGHT THIS AMOUNT OF RS.91,097 ALSO TO TAX. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.36,895 FROM AXIS BANK LTD AS INTEREST INCOME AND THE ASSESSEE HAS ADMITTED ONLY AN INCOME OF RS.13,341 A S PER THE TDS CERTIFICATE ENCLOSED. THEREFORE, THE DIFFERENCE OF RS.23,454 WAS ALSO ADDED TO THE RETURNED INCOME OF THE ASSESS EE AND BROUGHT TO TAX. 5. AGGRIEVED BY THE ABOVE ADDITIONS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) BUT WITH A D ELAY OF 970 DAYS. THE ASSESSEE SUBMITTED THAT THE DIFFERENCE IN THE TDS HAS ARISEN BECAUSE THE BANKS HAVE FAILED TO ISSUE FORM NO.16 ON TIME TO THE ASSESSEE AND THE AO HAS TAKEN THE ENTIRE CRE DIT AS INTEREST INCOME AND HAS PASSED THE ORDER U/S 143(3) OF THE A CT. IT WAS SUBMITTED THAT SINCE THE SAID INFORMATION WAS NOT A VAILABLE WITH THE ASSESSEE, HE HAS HELPLESS AND IT WAS ONLY AFTER OBTAINING THE FORM NO.16 FROM THE BANK, THAT THE ASSESSEE FILED A PETITION U/S 154 OF THE ACT BEFORE THE AO AND ALSO FILED A REVIS ED COMPUTATION OF INCOME IN WHICH HE ADMITTED INCOME OF RS.8,41,02 0 AND REQUESTED TO MODIFY ORDER U/S 143(3) OF THE ACT DAT ED 11.03.2013 ITA NO 1343 OF 20 17 KRISHNA MOHAN SAHU HYDERABAD. PAGE 4 OF 6 BASED ON FORM NO.16 ISSUED BY THE ASSESSEES BANKER S. IT WAS SUBMITTED THAT THE AO HAS INFORMED THE ASSESSEE ABO UT HIS INCOMPETENCE TO PROCESS THE APPLICATION U/S 154 AS HE FEELS THAT THERE IS NO MISTAKE APPARENT FROM RECORD AND RECTIF ICATION ORDER CANNOT BE PASSED ADMITTING NEW EVIDENCES SUBMITTED ALONG WITH THE RECTIFICATION FORM. IT WAS ALSO SUBMITTED THAT THE ASSESSEE MADE A GRIEVANCE PETITION WITH THE INCOME TAX OMBUD SMAN ON 25.08.2015 STATING THE FACTS OF HIS CASE BUT THE SA ME HAS ALSO BEEN REJECTED VIDE LETTER DATED 18.11.2015 MENTIONI NG THAT THE ASSESSEES CASE IS NOT FIT CASE FOR AN ORDER U/S 15 4. IT WAS SUBMITTED THAT IN THESE CIRCUMSTANCES, THE ASSESSEE HAS FILED THE APPEAL BEFORE THE CIT (A) WITH A DELAY OF 970 DAYS ALONG WITH AN APPLICATION TO CONDONE THE DELAY. 6. THE CIT (A) HOWEVER, DID NOT CONDONE THE DELAY A ND DISMISSED THE ASSESSEES APPLICATION AND THE ASSESS EE IS IN SECOND APPEAL BEFORE US. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE BEING AN NRI, ALL THE PAYMENTS MA DE TO HIM ARE SUBJECT TO TDS U/S 195 OF THE ACT. IT WAS SUBMITTED THAT DUE TO THE FAILURE OF THE BANKERS TO ISSUE FORM NO.16, IN TIME, THE AO HAS BROUGHT THE INCOME MENTIONED IN FORM 26AS AS ASSESS EES INCOME. HE SUBMITTED THAT THE ASSESSEE IS NOW FILIN G THE FORM 16 ISSUED BY THE BANKERS AND THE SAME MAY BE DIRECTED TO BE CONSIDERED BY THE AO FOR THE CAPITAL GAINS AS WELL AS THE INTEREST INCOME. ITA NO 1343 OF 20 17 KRISHNA MOHAN SAHU HYDERABAD. PAGE 5 OF 6 8. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEES APPEAL HAS BE EN REJECTED BY THE CIT (A) MAINLY ON THE GROUND OF DELAY. WITHOUT GOING INTO THE MERITS OF THE APPEAL, I FIND THAT THE ASSESSEE HAS BEEN PURSUING APPLICATION U/S 154 AND BEFORE THE INCOME-TAX OMBUD SMAN FOR REDRESSAL OF HIS GRIEVANCES WHICH HAS RESULTED IN T HE DELAY OF 970 DAYS IN FILING OF THE APPEAL BEFORE THE CIT (A). IN THE FOLLOWING CASES, THE HON'BLE SUPREME COURT HAS HELD THAT IF T HE ASSESSEE HAS SHOWN SUFFICIENT CAUSE, THE DELAY OUGHT TO BE C ONDONED AND THE APPEAL SHOULD BE CONSIDERED ON MERITS. I) COLLECTOR, LAND ACQUISITION VS. MST.KATIJI & ORS., REPORTED IN 167 ITR 471 (SC) II) MITHAILAL DALSANGAR SINGH V. ANNABAI DEVRAM KIN I , [(2003) 10 SCC 691 ] III) GANESH PRASAD BADINARAYAN VS. SANJEEV PRASAD JAMNAPRASAD CHOURASIYA (2004) 7SCC 482. IV) COMMISSIONER OF CENTRAL EXCISE VS. RAJ PETROLEU M PRODUCTS (2015) 5 TMI 449 10. I FIND THAT THE ASSESSEE WAS PURSUING THE APPLI CATION U/S 154 WHICH HAS RESULTED IN THE DELAY AND THEREFO RE, I CONDONE THE DELAY OF 970 DAYS IN FILING THE APPEAL BEFORE T HE CIT (A). HOWEVER, INSTEAD OF REMITTING THE MATTER BACK TO TH E CIT (A), I DEEM IT FIT AND PROPER TO REMIT BACK THE ISSUE TO T HE FILE OF THE AO AS THE DETAILS NOW FILED BY THE ASSESSEE NEEDS VERI FICATION BY THE AO. AO IS THEREFORE, DIRECTED TO CONSIDER THE EVIDE NCE FILED BY THE ITA NO 1343 OF 20 17 KRISHNA MOHAN SAHU HYDERABAD. PAGE 6 OF 6 ASSESSEE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING. 11. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2018. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH MARCH 2018. VINODAN/SPS COPY TO: 1 M/S. NALIN SHAH & CO. CAS, 4-3-41/1, 1 ST FLOOR, HILL STREET, RANIGUNJ, SECUNDERABAD 500003 2 ITO (INTERNATIONAL TAXATION)-1, HYDERABAD 3 CIT (A) - 10 HYDERABAD 4 CIT (IT & TP) HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER