Bhargav Kumar Bandi, Vijayawada V. The Income Tax Officer, Ward-2(3), Vijayawada

ITA 144/VIZ/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0468 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 09-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record
• Section: 263; 142(1); 143(2)

Judgement Text

1 आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एऱ रेड्डी, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.144/Viz/2020 (ननधधारण वषा / Assessment Year :2014-15) Bhargav Kumar Bandi, Vijayawada-520 008. PAN: AFRPB 7544 L Vs. Income Tax Officer, Ward-2(3), Vijayawada. (अऩीऱधथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : Sri C. Subrahmanyam प्रत्यधथी की ओर से / Respondent by : Sri MN Murthy Naik, CIT-DR स ु नवधई की तधरीख / Date of Hearing : 18/05/2022 घोषणध की तधरीख/Date of Pronouncement : 10/06/2022 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal is filed by the assessee against the order of the Ld. Pr. CIT, Vijayawada passed U/s. 263 of the Act, dated 29/03/2019 for the AY 2014-15. 2 2. The assessee has raised four grounds in his appeal which read as under: “1. Under the f acts and circumstances of the case the Ld. Pr. CIT erred in invoking the provisions of section 263 of the Act alleging non-verif ication of certain issues in original assessment by the Ld. AO as the original assessment by the Ld. AO is only a limited scrutiny assessment which was done according to the scope of limited scrutiny notice so issued. 2. Since the limited scrutiny assessment by Ld. AO vide order dated 28/10/2016 is only f or verif ication of cash deposits in savings bank account being more than the turnover which verif ication resulted in conversion of exempted agricultural income to a tune of Rs. 8,33,050/- to taxable income under the income head “other sources”, there was no occasion or necessity f or the Ld PrCITj to invoke the revisional jurisdiction U/s. 263 of the Act by expanding the scope of limited scrutiny assessment on the issues not covered by limited scrutiny notice U/s. 143(2) of the Act. Consequently, the said revisional proceedings are vitiated. 3. Under the f acts and circumstances of the case since there were no proceedings expanding the scope of limited scrutiny in the original assessment vide order dated 28/10/2016 which assessment was done in accordance such limited scrutiny notice, the revisional proceedings by the Pr CIT alleging non-verif ication of issues not covered by the scope of limited scrutiny notice is erroneous and the assumption of jurisdiction on such erroneous presumption is not warranted U/s. 263 of the Act. 4. Under the f acts and circumstances of the case reestimation of agricultural income by the Ld. Pr. CIT in revision proceedings U/s. 263 is highly erroneous and untenabale in law, as the same is based upon such estimation of agricultural income in subsequent assessment year. Reliance is placed on (a) the Bombay High Court in the case of H A Shah and Co vs. CIT, 30 ITR 618 (b) Orissa High Court in the case of CIT vs. Belpahar Ref ractories Ltd 128 ITR 610. 5. Any other ground or grounds that may be raised at the time of hearing of appeal.” 3 3. Brief facts of the case are that the assessee is an individual filed his return of income electronically for the AY 2014-15 on 24/01/2015 declaring total income of Rs. 3,78,330/-. Subsequently the case was selected for scrutiny under CASS to verify ‘cash deposits in savings bank account(s) is more than the turnover’. Accordingly, statutory notices U/s. 143(2) and 142(1) were served on the assessee. On perusal and verification of the submissions made by the assessee’s representative in response to the above notices, the Ld. AO had concluded that the assessee has not disclosed the agricultural income to the extent of Rs.8,33,050/- and therefore added the same under the head ‘income from other sources’ and determined the total income of the assessee at Rs. 12,11,380/- against the returned income of Rs. 3,78,330/-. Thereafter, the Ld. Principal Commissioner of Income Tax, Vijayawada on perusal of the assessment records, he was of the view that the order passed by the Ld. AO was erroneous and prejudicial to the interests of the revenue and accordingly issued show cause notice U/s. 263, dated 15/3/2019 to the assessee. In response, before the Ld. Pr. CIT the assessee himself appeared and represented the case. But, as per the Ld. Pr. CIT the assessee had not filed any details with regard to the 4 queries raised by the Pr. CIT in the show cause notice. Therefore, in the absence of any details filed in response to the notice U/s. 263, the Ld. Pr. CIT held that the assessment order passed by the Ld. AO is erroneous and prejudicial to the interests of the revenue on account of (i) the interest expenditure claimed by the assessee is disproportionate (ii) no details furnished by the assessee regarding gross agricultural income, expenditure incurred towards earning of agricultural income and (iii) cash deposits in bank accounts and sources thereon. Accordingly, the Ld. Pr. CIT directed the AO to re-do the assessment covering the issues mentioned in the show cause letters. Aggrieved by the order of the Ld. Pr. CIT, the assessee is in appeal before us. 4. At the outset, the Ld. AR submitted that the Ld. Pr. CIT had passed the order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld Pr. CIT 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 Ld. AR and argued that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, though the assessee personally appeared, he could not adduce any evidence in support of his claim and appropriate answers to 5 the queries raised by the ld. Pr. CIT in the show cause notice issued U/s. 263. Therefore the Ld. Pr. CIT had no other option but to pass the order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. Pr. CIT does not call for any interference. 5. We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that the Ld. Pr. CIT had posted the case on several occasions. However, though the assessee appeared himself before the Ld. Pr. CIT, he could not effectively represent the case and made submissions in support of his claim. Therefore, the Ld. Pr. CIT was left with no other option except to adjudicate the appeal based on the material available on record. In this situation, considering the prayer of the Ld. AR as well as the issues involved in the appeal, in the interest of justice, we hereby remit the matter back to the file of Ld. Pr. CIT in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. Pr. CIT in the proceedings failing which the Ld. Pr. CIT shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on record. It is ordered accordingly. 6 6. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove. Pronounced in the open Court on the 10 th June, 2022. Sd/- Sd/- (एस बाऱाक ृ ष्णन) (द ु व्ि ू रु आर.एऱ रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) ऱेखा सदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Dated : 10.06.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधधाररती/ The Assessee – Bhargav Kumar Bandi, 59-6-30, G-4, Sruthi Sravan NV Apartments, Kanchukotavari Street, Ramachandranagar, Vijayawada, Andhra Pradesh – 520008. 2. रधजस्व/The Revenue – Income Tax Officer, Ward-2(3), CR Buildings, MG Road, Vijayawada, Andhra Pradesh – 520002. 3. The Principal Commissioner of Income Tax, Vijayawada. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax, 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईऱ / Guard file आदेशधन ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam