Adepu Rajendra Prasad, Hyderabad V. ITO., Ward-3, Karimnagar

ITA 1415/HYD/2014

• Counselvise Citation: 141522514 RSA 2014
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 25-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence
• Section: 147; 148; 144; 142(1); 234B

Judgement Text

ITA NO.1415 OF 2014 ADEPU RAJENDRA PRASAD KARIMNAGA R. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT.ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.1415/HYD/2014 (ASSESSMENT YEAR: 2005-06) SHRI ADEPU RAJENDRA PRASAD KARIMNAGAR PAN: AJVPA 3841 K VS. INCOME TAX OFFICER WARD-3 KARIMNAGAR (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI S.RAMA RAO, ADVOCATE DEPARTMENT BY: SHRI RAJAT MITRA, (DR) DATE OF HEARING: 07/01/2015 DATE OF PRONOUNCEMENT: 09/01/2015 O R D E R PER ASHA VIJAYARAGHAVAN, J.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD CIT (A)-III HYDERABAD DATED 17 TH JULY, 2014 RELATING TO A.Y 2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM BUSINESS. INFORMATION FROM CIB SECTION WAS RECEIVED TO THE EFFECT THAT THE ASSESSEE HAD MADE C ASH DEPOSITS IN EXCESS OF RS.10.00 LAKHS DURING FINANCIAL YEAR 2 004-05 RELEVANT TO A.Y 2005-06. A NOTICE U/S 142(1) WAS IS SUED ON 16.08.2007 CALLING FOR THE RETURN OF INCOME. AS THE RE HAS BEEN NO RESPONSE FROM THE ASSESSEE, THE ASSESSMENT WAS COMP LETED U/S 144 OF THE ACT ON 31.12.2007 TREATING THE ENTIRE AM OUNT OF RS.10,84,711/- AS UNEXPLAINED INVESTMENT MADE BY TH E ASSESSEE DURING THE A.Y 2005-06. RETURN OF INCOME WAS BELATE DLY FILED BY THE ASSESSEE ON 7.1.2008 AFTER COMPLETION OF THE AS SESSMENT. ITA NO.1415 OF 2014 ADEPU RAJENDRA PRASAD KARIMNAGA R. PAGE 2 OF 5 AGGRIEVED BY THE ASSESSMENT, THE ASSESSEE FILED APP EAL BEFORE THE LD CIT (A)III HYDERABAD. THE LD CIT (A) NOTICED THA T THE NOTICE U/S 142(1) WAS NOT ISSUED WITHIN ONE YEAR FROM THE END OF THE RELEVANT A.Y, HE OBSERVED THAT THE PROCEEDINGS ARE NOT VALID AND HENCE CANCELLED THE ASSESSMENT. HOWEVER, THE CIT (A ) HAS ADVISED THE AO TO INITIATE PROCEEDINGS U/S 147 OF T HE I.T. ACT TO ASSESS THE ESCAPED INCOME, IF ANY. THEREAFTER, THE AO HAD ISSUED A NOTICE U/S 148 ON 2.12.2009 AFTER OBTAININ G APPROVAL AS REQUIRED U/S 151(1) OF THE I.T. ACT. IN RESPONSE TO THE NOTICE ISSUED, THE ASSESSEE FILED A LETTER ON 9.2.2010 REQ UESTING FOR TREATING THE RETURN FILED ON 7.1.2008 AS A RETURN F ILED IN RESPONSE TO THE NOTICE ISSUED U/S 148. 3. THE CASE WAS TAKEN FOR SCRUTINY AND NOTICE U/S 1 43(2) WAS ISSUED. THE ASSESSMENT WAS COMPLETED AND THE TOTAL INCOME WAS ASSESSED AT RS.3,90,990/-. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD CIT (A). THE CIT (A) HELD AS FOLLOWS: 4. IN THIS CASE THE 1 ST NOTICE OF HEARING WAS ISSUED ON 21.04.2014 FIXING THE CASE FOR HEARING ON 6.5.2014. THE APPELLANT FILED AN ADJOURNMENT LETTER ON 6.5.2014 STATING THAT THE APPELLANT IS REPORTEDLY OUT OF STA TION TILL 13.05.2014. THE CASE WAS ADJOURNED TO 3.6.2014. ON 3.6.2014 THE AR FILED AN ADJOURNMENT LETTER STATING THAT THE ASSESSEE IS STATIONED AT KORUTLA, KARIMNAGAR DISTRICT COULD NOT COME OVER TO HYDERABAD. AGAIN TH E CASE WAS ADJOURNED TO 23.6.2014. ON 23.6.2014 THE A R NOR THE APPELLANT APPEARED. DESPITE THIS YET ANOTHE R OPPORTUNITY WAS GIVEN AND THE CASE WAS FIXED ON 15.7.2014. IT IS CLEAR THAT THE APPELLANT IS NOT KE EN TO PURSUE HIS OWN APPEAL. I HAVE THEREFORE, NO OPTION BUT TO ADJUDICATE ON THE CASE BASED ON INFORMATION ON RECORD. 4. THE CIT (A) DIRECTED THE AO TO PURSUE THE RECOVE RY OF TAX CONSIDERING THE TOTAL NON COOPERATION BY THE ASSESS EE IN THE TAX ITA NO.1415 OF 2014 ADEPU RAJENDRA PRASAD KARIMNAGA R. PAGE 3 OF 5 PROCEEDINGS AND DISMISSED THE APPEAL OF THE ASSESSE E. THE CIT (A) ALSO DIRECTED THE AO TO CHARGE THE CONSEQUENTIA L INTEREST U/S 234A AND 234C. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD CIT (A) IS ERRONEOUS BOTH O N FACTS AND IN LAW. 2. THE LD CIT (A) ERRED IN DISPOSING OF THE APPEAL EX PARTE 3. THE LD CIT (A) ERRED IN NOT DECIDING THE APPEAL ON MERIT AS PER THE GROUNDS OF APPEAL. 4. THE LD CIT (A) ERRED IN NOT CONSIDERING THE WRIT TEN SUBMISSIONS AND THE PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE FILED BEFORE THE LD CIT (A). 5. THE LD CIT (A) ERRED IN CONFIRMING THE ACTION OF THE AO IN LEVYING INTEREST U/S 234A AND 234B OF THE I.T . ACT. 5. THE LD COUNSEL FOR THE ASSESSEE SHRI S. RAMA RAO STATED AT THE TIME OF HEARING THAT HE HAD FILED WRITTEN SUBMI SSIONS AND HAD ATTENDED THE HEARING ON 15.7.2014 AND HENCE COO PERATED WITH THE DEPARTMENT. THE LD COUNSEL RELIED ON THE D ECISION IN THE CASE OF AGA PUBLICATIONS LTD VS. DCIT IN ITA NO.1297/HYD/2014. HE FILED AN AFFIDAVIT AFFIRMING T HAT HE WAS PRESENT AND HAD FILED THE WRITTEN SUBMISSIONS AND H ENCE POINTED OUT THAT THE CIT (A) HAS WRONGLY MENTIONED THAT HE WAS NOT PRESENT AND HAD NOT APPEARED BEFORE HIM. ACCORDING TO THE LD COUNSEL, THE LD CIT (A) HAD WRONGLY STATED THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL. THE COUNSEL POINTED OUT THAT THE ASSESSEE HAD SOUGHT ADJOURNMENT MANY TIMES DUE TO NON AVAILABILITY OF THE GUIDANCE FROM THE C.A. 6. WE HAVE HEARD BOTH THE PARTIES. IN ITA NO.1297/H YD/2014, DATED 28 TH NOVEMBER, 2014 IN THE CASE OF AGA PUBLICATIONS LTD VS. DCIT RELIED ON BY THE ASSESSEE, IT HAS BEEN HEL D AS FOLLOWS: ITA NO.1415 OF 2014 ADEPU RAJENDRA PRASAD KARIMNAGA R. PAGE 4 OF 5 4. WITHOUT GOING INTO THE MERITS OF VARIOUS CONTEN TIONS, WE ARE OF THE OPINION THAT THE ORDER OF LD. CIT(A) CANNOT BE SUSTAINED. FIRST OF ALL, LD. CIT(A) HAS NO POWER TO DISMISS THE APPEAL ON THE REASON THAT ASSESSEE IS NOT INTER ESTED IN PURSUING THE APPEAL. LD. CIT(A) HAS TO DECIDE THE I SSUES ON MERITS CONSIDERING THE FACTS ON RECORD AND PASS ORD ERS, IF ANY BASED ON EARLIER YEARS, AS SIMILAR ADDITIONS WE RE ALSO MADE IN EARLIER YEARS. SINCE, LD. CIT(A) REJECTED T HE ADJOURNMENT SOUGHT AND DISMISSED THE APPEAL, PRINCI PLES OF NATURAL JUSTICE REQUIRE THAT ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO JUSTIFY THE CLAIMS. SINCE ASSESSEE I S ALSO FILING ADDITIONAL EVIDENCE IN SUPPORT OF VARIOUS PA YMENTS MADE, WE ARE OF THE OPINION THAT THE ISSUE REQUIRES RE- EXAMINATION BY A.O. THEREFORE, GIVING OPPORTUNITY T O ASSESSEE TO JUSTIFY VARIOUS CLAIMS MADE, THE ORDER OF A.O. AND LD. CIT(A) ARE SET ASIDE AND ISSUE OF ASSESSMEN T IS RESTORED TO THE FILE OF A.O. TO DO ACCORDING TO LAW AND FACTS OF THE CASE. 7. RESPECTFULLY FOLLOWING THE ABOVE COORDINATE BENC H DECISION, WE DEEM IT FIT TO SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE MATTER TO THE FILE OF THE AO WHO SHALL DECIDE THE CASE IN ACCORDANCE WITH THE LAW AND FACTS OF THE CASE. N EEDLESS TO SAY, THAT ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY FOR PRESENTING ITS CASE. 8. IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JANUARY, 2015. S D/ - S D/ - (P.M. JAGTAP) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 9 TH JANUARY, 2015. ITA NO.1415 OF 2014 ADEPU RAJENDRA PRASAD KARIMNAGA R. PAGE 5 OF 5 VNODAN/SPS COPY TO: 1. SRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELE GANCE, 3-6-643 STREET NO.9 HIMAYATNAGAR, HYDERABAD 500029 2. INCOME TAX OFFICER WARD 3 KARIMNAGAR 3. THE CIT(A)-III HYDERABAD 4. THE CIT HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE BY ORDER