Shaik Abdul Aziz, Karimnagar V. Income Tax Officer, Ward-1, Karimnagar

ITA 1564/Hyd/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0854 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC-A
• Next Hearing Date: 14-02-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAJAN DEY
• Assessee Lawyers: A C GANGAIAH
• Keywords: Unexplained cash credit; Opportunity of being heard; Period of limitation; Reason to believe; Set aside
• Section: 143(3); 68; 148; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 1562/HYD/17 2013-14 SMT. RAFAT SULTANA, KARIMNAGAR [PAN: ANHPR6652B] INCOME TAX OFFICER, WARD-1, KARIMNAGAR 1563/HYD/17 2012-13 SHAIK ABDUL AZIZ KARIMNAGAR [PAN: BAOPS4466F] 1564/HYD/17 2013-14 FOR ASSESSEE : SHRI A.C. GANGAIAH, AR FOR REVENUE : SHRI NILAJAN DEY, DR DATE OF HEARING : 14-02-2019 DATE OF PRONOUNCEMENT : 27-03-2019 O R D E R PER S. RIFAUR RAHMAN, A.M. : THESE APPEALS ARE FILED BY TWO ASSESSEES AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, HYDERABA D. SINCE THE FACTS AND ISSUES INVOLVED IN ALL THESE APPEALS ARE CO MMON AND IDENTICAL, ALL THESE APPEALS ARE HEARD TOGETHER AND DI SPOSED BY WAY OF THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE, THE FACTS RELATING TO ITA NO. 1562/HYD/2017 ARE DISCUSSED HEREUNDER: ITA NOS. 1562, 1563 & 1564/HYD/2017 :- 2 -: 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, AN INDIV IDUAL, DERIVING INCOME FROM TAILORING HAS FILED HER RETURN O F INCOME FOR THE AY. 2013-14 DECLARING THE TAXABLE INCOME AT RS. 2,05,0 00/-. ASSESSEE ATTACHED BALANCE SHEET ALONG WITH RETURN OF I NCOME AS PER WHICH LIABILITIES WERE DISCLOSED AT RS. 20,77,91 3/-, WHEREAS THE ASSETS WERE DECLARED AT RS. 6,92,600/-. BECAUSE OF TH E ABOVE DISCREPANCY, A NOTICE U/S. 148 OF THE INCOME TAX ACT [ACT] WAS ISSUED AND SERVED ON THE ASSESSEE ON 18-08-2014. TH E ASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S. 147 OF THE ACT BY MA KING ADDITION OF UNEXPLAINED CASH CREDIT TO THE EXTENT OF RS. 8 LAKHS . 2.1. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). THE LD.CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE DUE TO NON-APPEARANCE AND NON-PROSECUTING OF THE APPEAL. HOWEVER, LD.CIT(A) ALSO DISPOSED OF THE APP EAL ON MERITS WITHOUT ANY ASSISTANCE FROM THE ASSESSEE. 2.2. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS, ILLEGAL, AND HELD CONTRARY TO THE FACTS OF THE INST ANT CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER WITH OUT GIVING ANY FURTHER OPPORTUNITY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN DETER MINING THE TOTAL INCOME AT RS. 10,05,000 AS AGAINST THE RS. 2,05,000 /- WITHOUT GIVING ANY FURTHER OPPORTUNITY. ITA NOS. 1562, 1563 & 1564/HYD/2017 :- 3 -: 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN T REATING THE ENTIRE CASH DEPOSITS OF RS. 8,00,000/- MADE IN BANK ACCOUN T OF THE APPELLANT. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE ESTIMATED THE INCOME ON THE BASIS OF TURNOVER/GROSS RECEIPTS. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE CONSIDERED THE FACTS OF THE CASE. 7. ANY OTHER GROUNDS/GROUND MAY BE URGED AT THE TIME O F HEARING. 2.3. FURTHER, ASSESSEE FILED ADDITIONAL GROUNDS OF AP PEAL WITH THE PRAYER TO ADMIT THE SAME BEFORE US, WHICH ARE AS FOLLO WS: ADDITIONAL GROUNDS OF APPEAL: (1) THE REASSESSMENT ORDERS DO NOT SPECIFY THE APPR OVAL TAKEN UNDER SECTION 151 FOR ISSUING NOTICE U/S 148. TRIBUNAL IS PRAYED TO SET ASIDE THE NOTICE ISSUED FOR REASSESSMENT. (2) THE NOTICE U/S 148 IS ISSUED BEFORE EXPIRY OF P ERIOD FOR ISSUING NOTICE U/S 143(2). THE ASSESSMENT IS OPEN BEFORE ASSESSING AUTHORITY TILL THE COMPLETION OF PERIOD SPECIFIED IN SECTION 143(2). N OTICE FOR REASSESSMENT BEFORE EXPIRY OF THE PERIOD SPECIFIED IN SEC 143(2) IS BAD IN LAW. TRIBUNAL PRAYED TO SET ASIDE THE NOTICE AND DISPOSE THE APPE AL. (3) THE NOTICE FOR REASSESSMENT UNDER SECTION 148 I S SERVED ON 18.8.2014. ORDERS MIGHT HAVE BEEN PASSED ON OR BEFORE 31.12.20 15 AS PER SECTION 153(2). THE ORDERS ARE PASSED ON 30.3.2016 BEYOND T IME LIMIT SPECIFIED IN SECTION 153(2). THE ORDERS PASSED ARE BARRED BY LIM ITATION SPECIFIED IN SECTION 153(2) AND LIABLE TO BE QUASHED. 3. BEFORE US, LD.AR HEAVILY STRESSED THE ADDITIONAL GR OUNDS OF APPEAL, WHICH WAS NOT RAISED BEFORE THE LD.CIT(A) TO SUBMIT THAT THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS RE -OPENED BY THE ASSESSING OFFICER BY ISSUANCE OF NOTICE U/S. 148 , EVEN THOUGH THERE IS ENOUGH TIME TO ISSUE NOTICE U/S. 143(2), NOTIC E U/S. 148 CANNOT BE ISSUED. HE RELIED ON THE FOLLOWING CASE LA W: ITA NOS. 1562, 1563 & 1564/HYD/2017 :- 4 -: I. HON'BLE SUPREME COURT IN THE CASE OF HARBANSLAL MAL HOTRA & SONS PVT. LTD., IN CIVIL APPEAL NO. 3337 OF 2007; II. HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI [141 ITR 67]; III. ITAT, NAGPUR IN THE CASE OF SHRI SIDDIQUE ZIKAR GHAN IWALA VS. DCIT AND OTHERS IN ITA NO. 156/NAG/2016 AND OTHERS; IV. STANDARD PROCEDURE FOR APPLYING PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961 SPECIFIED BY CBDT VIDE NO . 246/151/2017-A&PAC-1; V. ITAT, HYDERABAD IN THE CASE OF MR. NITIN KUMAR SHAH, VS. ACIT IN ITA NO. 1489/HYD/2012. DT. 11-10-2013; VI. CIT VS. QATALYS SOFTWARE TECHNOLOGIES LIMITED [308 I TR 249]; VII. TRUSTEES OF H.E.H. THE NIZAMS SUPPLEMENTAL FAMILY TR UST VS. CIT [244 ITR 381]; 4. LD.DR, ON THE OTHER HAND, RELIED ON THE ORDER OF LD .CIT(A) AND FURTHER SUBMITTED A COPY OF THE ORDER SHEET TO HIGH LIGHT THAT ASSESSING OFFICER HAS REASON TO BELIEVE THE ESCAPEMEN T OF INCOME. FURTHER, HE RELIED ON THE CASE OF PURVIBEN SNEHALBHAI PANCHHIGAR VS. ACIT [409 ITR 124] (GUJ) ON THE ISSUE OF ADDITI ON MADE BY THE ASSESSING OFFICER. 5. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. BEFORE US, ASSESSEE FILED ADDITIONAL GRO UNDS OF APPEAL, STRESSING THE LEGAL POINT THAT ASSESSING OFFICER CANNOT ISSUE 148 NOTICE WHEN THERE IS A TIME TO ISSUE 143(2) NOTICE SUP PORTED WITH ITA NOS. 1562, 1563 & 1564/HYD/2017 :- 5 -: THE CASE LAW. IN SUPPORT OF THE ABOVE SUBMISSIONS, LD .AR HAS NOT MADE ANY SUBMISSIONS ON MERITS OF THE CASE, IT IS NOTED THAT ASSESSEE HAS NOT MADE ANY SUBMISSIONS BEFORE THE LD. CIT(A) NOR MADE EFFORTS TO PROSECUTE BEFORE THE LD.CIT(A). LD.CIT( A) HAS DISMISSED THE APPEAL IN LIMINE AND DEALT WITH THE SAME ON MERITS WITHOUT ANY ASSISTANCE FROM THE ASSESSEE. SINCE THE L EGAL ISSUE WAS RAISED BEFORE US, WHICH WAS NOT RAISED BEFORE LD.CIT (A), THEREFORE, WE ADMIT THE ADDITIONAL GROUNDS OF APPEAL RAISED BY TH E ASSESSEE AND DEEM IT FIT TO REMIT THIS ISSUE TO THE FILE OF LD.CIT (A) TO DEAL WITH THE SAME AFRESH. WE WOULD LIKE TO RECORD THAT VARI OUS JUDICIAL PRONOUNCEMENTS HELD THIS ISSUE AGAINST THE REVENUE WHI LE ASSESSMENT PROCEEDINGS REMAIN INCHOATE. NO FRESH EVID ENCE OR MATERIAL COULD POSSIBLY BE UN-EARTHED. IF ANY SUCH MATERIAL OR EVIDENCE IS AVAILABLE, THERE WOULD BE NO RESTRICTIONS OR CONSTRAINTS ON ITS BEING TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER FOR FRAMING THE CURRENT ASSESSMENT. IF THE ASSESSMENT IS NO T FRAMED BEFORE THE EXPIRY OF THE PERIOD OF LIMITATION FOR A PAR TICULAR ASSESSMENT YEAR, IT WOULD BE ASSUMED THAT SINCE PROCEED INGS HAD NOT BEEN OPENED U/S. 143(2), THE RETURN HAD BEEN ACCEP TED AS CORRECT. IT MAY BE ARGUED THAT THEREAFTER, RECOURSE CO ULD BE TAKEN TO SECTION 147, PROVIDED, FRESH MATERIAL HAD BEEN REC EIVED BY THE ASSESSING OFFICER AFTER THE EXPIRY OF LIMITATION FIXED FOR FRAMING THE ORIGINAL ASSESSMENT. THEREFORE, WE DIRECT THE CIT(A) TO ADJUDICATE THIS ISSUE, CONSIDERING THE LEGAL ASPECTS, AFTER GIVIN G PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE , THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 1562, 1563 & 1564/HYD/2017 :- 6 -: ITA NO. 1564/HYD/2017: 6. SINCE THE ISSUE RAISED IN THIS APPEAL IS SIMILAR TO THE ONE, WHICH IS DISCUSSED IN THE APPEAL IN ITA NO. 1562/HYD /2017 HEREIN, ON THE SAME LINES, WE DIRECT CIT(A) TO ADJUDI CATE THIS ISSUE AFRESH, CONSIDERING THE LEGAL ASPECTS, AFTER GIVING P ROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1563/HYD/2017: 7. FURTHER, WE NOTICE THAT IN THIS APPEAL THERE IS NO ISS UE OF LEGAL GROUND ON ISSUANCE OF NOTICE U/S. 148 OF THE AC T. BUT THE APPEAL WAS DISMISSED BY THE LD.CIT(A) FOR NON-PROSEC UTION. 7.1. SINCE THE ISSUES ARE COMMON IN THE ALL THE ABOVE THREE APPEALS, WE DEEM IT FIT AND PROPER TO REMIT THE SAME TO THE FILE OF CIT(A) TO ADJUDICATE AFRESH IN LINE WITH THE ABOVE TW O APPEALS, AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 8. TO SUM-UP ALL THE THREE APPEALS ARE ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH, 2019 SD/- SD/- (P. MADHAVI DEVI) (S. RIF AUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT M EMBER HYDERABAD, DATED 27 TH MARCH, 2019 TNMM ITA NOS. 1562, 1563 & 1564/HYD/2017 :- 7 -: COPY TO : 1. SMT. RAFAT SULTANA, H.NO. 1-5-503, AMEER NAGAR, KARIMNAGAR. 2. SHAIK ABDUL AZIZ, H.NO. 1-5-503, AMEER NAGAR, KA RIMNAGAR. 3. THE INCOME TAX OFFICER, WARD-1, KARIMNAGAR. 4. THE CIT(APPEALS)-2, HYDERABAD 5. THE PR.CIT-2, HYDERABAD 6. D.R. ITAT, HYDERABAD. 7. GUARD FILE.