Anees Fatima, Hyderabad V. Deputy Commissioner OF Income Tax Central Circle3-(3), Hyderabad

ITA 152/Hyd/2021

AI Insights

The case involves multiple appeals filed by the assessee, Anees Fatima, against the orders of the Learned Commissioner of Income Tax (Appeals) - 11, Hyderabad, for the assessment years 2013-14 to 2018-19. The primary contention revolves around the dismissal of the appeals by the CIT(A) on grounds of non-prosecution and merits, and the additions made under section 68 of the Income Tax Act, 1961, for unexplained cash credits. The assessee argued that the assessments under section 153A were made without proper approval and were not based on any incriminating material found during the search. The Income Tax Appellate Tribunal (ITAT) found that the lower authorities had not adequately considered the assessee's explanations and granted a remand for fresh adjudication.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122416 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 19-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 09-03-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 68; 132; 142(1); 153A; 234B; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad Before Shri Rama Kanta Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member O R D E R PER BENCH : The captioned appeals are filed by the assessee, feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Appeals) – 11, Hyderabad dt.15.02.2021 for A.Ys. 2013-14 to 2018-19. 2. The grounds raised by the assessee in ITA No.147/Hyd/2021 for A.Y. 2013-14 read as under : “1. The Ld. CIT (A) erred in dismissing the appeal without appreciating the facts of the cate and without considering the submissions of the assessee. 2. a) On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have appreciated the fact that the AO erred in passing the order u/s 153A of the Act without obtaining the prior approval of the competent Authority JCIT / Addl. CIT u/s 153D of the Act. ITA.Nos.147 to 152/Hyd/2021 Assessment Years: 2013-14 to 2018-19 Anees Fatima, C/o. P. Murali & Co., Chartered Accountants, 6-3-655/2/3, Somajiguda, Hyderabad – 500082. PAN : ABOPF7131J. Vs. Deputy Commissioner of Income Tax, Central Circle – 3(3), Hyderabad. (Appellant) (Respondent) Assessee by: Sri P. Murali Mohan Rao, CA Revenue by : Sri Jeevan Lal Lavidiya Date of hearing: 13.04.2023 Date of pronouncement: 25.04.2023 2 b) The Ld. CIT (A) has erred in holding that the scope of assessment u/s 153A of the Act encompasses all the issues of the assessee and is not restricted to seized material alone. c. The Ld. CIT(A) ought to have appreciated that section 153A of the Act cannot be read in isolation and it has to be read in the context at the provisions of section 132 or section 132A of the Act which aim at discovery of incriminating evidence. d) The Ld. CIT(A) ought to have appreciated that the purpose of the assessment u/s 153A of the Act is to assess the income which has not been disclosed or would not have been disclosed. e) The Ld CIT (A) ought to have appreciated that there are umpteen number of decisions of several High Courts wherein it has been clearly held that assessment u/s 153A of the Act on an Issue could not have been made unless backed by some incriminating material found during the search. f) The Ld. CTT(A) ought to have appreciated that there is no incriminating material as referred to in section 153A r.w s. 132 of the Income Tax Act, 1961 and that the addition made u/s 68 of the Act for Rs,2,70,627/- is void ab initio 3. The Ld. CTT( A) erred in completing the assessment w/s 144 of the Act even though the assessee has responded to the notices issued by the Ld. CIT(A)and furnished the information called for 4. a) The Ld.CIT(A) erred in confirming the addition of Rs.2,70,627/- made by AO without appreciating the facts of case and based on assumptions and presumptions and not based on any material seized during the course of the search b) The Ld. CIT(A) ought to have appreciated that the addition made u/s 68 of the Act for Rs.2,70,627/- is on the basis of copies of bank statements which cannot be considered as "Incriminating material". c) The Ld. CIT (A) ought to have considered the fact that no addition u/s 68 can be made applicable, when the assessee does not maintain any books of account. (d) The Ld CIT(A) ought to have appreciated the fact that addition cannot be made u/s 68 of the Act as bank statements cannot form part of the books of the accounts of assessee. e) The Ld. CIT(A) ought to have appreciated the fact that as per the provisions of the IT Act, mere receipts of any amount cannot be considered as income in the hands of the assesses unless it is chargeable to tax as per the charging sections of the act under any five heads of income. f) Without prejudice to the above, the learned Ld. CIT(A) ought to have appreciated that the AO erred in not considering the submissions made in the scrutiny proceedings by the appellant regarding the cash deposits made during the FY relevant to the assessment year that the same were accounted under Business and Profession/Income from Other Sources which was duly accounted in the return of income of the previous year relevant to the assessment year. 3 g) The Ld. CIT(A) ought to have appreciated the fact that Section 68 to be read along with provisions of Sec 34 of the Evidence Act wherein the provision clearly states that an entry relevant there under must be shown in books and the evidentiary value of such entry for charging a person with liability. 5. Without prejudice, the ld.CIT(A) ought to have appreciated the fact that the AO erred in not applying the peak cash theory while making addition u/s. 68 of the Act. 6. without prejudice, the ld.CIT(A) has erred in not giving telescoping effect to the additional income arrived in group/family related concerns to the addition made towards the unexplained cash credits u/s. 68 of the Act. 7. The Ld.CIT(A) erred in not appreciating that the AO ought to have correctly applied the provisions of interest u/s. 234A and 234B of the Act in calculating the interest u/s. 234A and 234B in the assessment. 3. Similar grounds were raised by the assessee in other five appeals also i.e., ITA 148 to 152/Hyd/2021 for A.Ys. 2014-15 to 2018-19 except the amounts involved. 4. Before us, at the outset, both the parties submitted that the issues raised in all the appeals are identical. In view of the aforesaid submissions, we, for the sake of convenience proceed to dispose of all the captioned appeals by a consolidated order but however refer to the facts in ITA No.147/Hyd/2021 for A.Y. 2013-14. 5. The brief facts of the case are that assessee is in individual, who originally did not file her return of income for A.Y. 2013-14. Search and seizure operation u/s 132 of the Act was conducted in GRR group and warrant was executed against the assessee. Consequently, notice u/s 153A of the Act was issued on 17.09.2018 calling for return of income. As the assessee did not file the return of income within the stipulated time, notice u/s 142(1) of the Act was issued on 29.10.2018. Thereafter, assessee filed return of income electronically on 13.12.2018 admitting total income of Rs.2,23,550/-. Assessee thereafter, submitted reply to 4 notice u/s 142(1) dt.29.10.2018. In her submissions, assessee disclosed one more account which was not reported in the return of income which has huge credits in later years. Hence, the Assessing Officer had initiated penalty proceedings u/s 271(1)(b) for non-compliance of notice u/s 142(1) of the Act. In the absence of any explanation from the assessee about the credits in the bank account, Assessing Officer treated an amount of Rs.2,70,627/- as unexplained income u/s 68 of the Act and added to the total income of the assessee and completed the assessment u/s 144 r.w.s. 153A of the Act determining the total income of the assessee at Rs.4,94,177/-. 6. Feeling aggrieved with the order of Assessing Officer, assessee carried the matter before ld.CIT(A), who dismissed the appeal of assessee on account of non-prosecution and on merits. 7. Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us. 8. Before us, ld.AR submitted that the learned lower authorities have decided the issue without considering the explanation offered by the assessee and that assessee failed to appear due to unavoidable circumstances. Ld.AR further submitted that as the assessee has sufficient cause from putting in appearance before the ld.CIT(A), matter may kindly be remitted back to the authorities below for afresh adjudication. 9. Per contra, the ld.DR has raised objection for remanding the matter back to the file of lower authorities. 5 10. We have heard the rival submissions and perused the material on record. The Assessing Officer in Para 3.0 and 4.0 held that though the assessee was granted several opportunities to produce the information annexed to notices dt.13.11.2018 and 29.07.2019, did not comply notices in time and also did not file return of income despite having the chargeable income to tax during the relevant financial year in response to notice u/s 153A. Hence, the Assessing Officer completed the assessment u/s 144 r.w.s. 153A of the Act. Subsequently, the assessee carried the matter before the ld.CIT(A), who had issued notice u/s 250 of the Act calling for the details in support of her grounds of appeal. On issuance of notices, assessee failed to appear and filed written submissions only. Based on written submissions, ld.CIT(A) dismissed the appeal of the assessee by giving his reasons at length from page 16 to 21 of his order. In page 20 of his order, ld.CIT(A) upheld the action of Assessing Officer in invoking section 144 of the Act on account of non-compliance of the assessee and clearly mentioned that assessee had not brought out anything for justification of her case. 11. In light of the above, though, invariably the appeal of the assessee is required to be dismissed on account of non- furnishing of documents, however, considering the totality of the facts and circumstances, and more particularly, the assessee to be a house-wife, one more opportunity is granted to the assessee to appear and contest the case before the ld.CIT(A). Hence, we remand back the appeal to the file of ld.CIT(A) with a liberty to grant one more opportunity to the assessee to prove her case subject to payment of Rs.2,000/- (Rupees Two Thousand only) to be deposited in favour of Prime Minister National Relief Fund which shall be payable within one month or from the date of 6 receipt of this order or whichever is earlier. On the date of hearing fix by the ld.CIT(A), the assessee shall file all the documents / evidence in support of her case and in that eventuality, the ld.CIT(A) shall call for the remand report from the Assessing Officer. In case, the assessee failed to file any documents in support of her case, ld.CIT(A) shall decide the matter in accordance with the law. Accordingly, the appeal of assessee is allowed for statistical purposes. 12. As far as the other appeals i.e., ITA Nos.148 to 152/Hyd/2021 are concerned, in view of the submission of both the parties that the issues raised in A.Y. 2013-14 are identical to the other assessment years, we for the reasons stated hereinabove while deciding the appeal in ITA 147/Hyd/2021 and for similar reasons, allow the other appeals for statistical purposes. 13. In the result, the appeals of assessee in ITA Nos.148 to 152/Hyd/2021 are allowed for statistical purposes. 14. To sum up, all the appeals of assessee are allowed for statistical purposes. A copy of the same may be placed in respective case files. Order pronounced in the Open Court on 25 th April, 2023. Sd/- Sd/- Sd/- Sd/- Sd/- Sd/- (RAMA KANTA PANDA) ACCOUNTANT MEMBER (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 25 th April, 2023. TYNM/sps 7 Copy to: S.No Addresses 1 Anees Fatima, C/o. P. Murali & Co., Chartered Accountants, 6-3-655/2/3, Somajiguda, Hyderabad – 500082. 2 Deputy Commissioner of Income Tax, Central Circle – 3(3), Hyderabad. 3 PCIT (Central), Hyderabad. 4 DR, ITAT Hyderabad Benches 5 Guard File By Order