Talluri Srinivasulu, Nellore V. Income Tax officer,Ward -1, Nellore

ITA 161/Hyd/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8229 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 10-08-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 22-03-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.V. PRASAD REDDY
• Keywords: Set aside
• Section: 263; 143(3); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER ITA NO. 161 /HYD/20 21 ASSESSMENT YEAR: 20 16 - 17 TALLURI SRINIVASULU, NELLORE 524 001. PAN: AAUPT 9827 G VS. INCOME TAX OFFICER, WARD - 1, NELLORE. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI M.V. PRASAD REVENUE BY: SHRI B.V. PRASAD REDDY, DR DATE OF HEARING: 10/08/2021 DATE OF PRONOUNCEMENT: 12 /08/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. PRINCIPAL COMMISSIONER OF INCOME TAX, TIRUPATI DATED 05/03/2021 PASSED U/S. 263 OF THE ACT FOR THE AY 2016 - 17. 2. THE ASSESSEE HAS RAISED NINE GROUNDS IN HIS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD PCIT U/S. 263 OF THE ACT IS ABINITIO VOID BEING BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. PCIT ERRED IN SETTING ASIDE THE ASSESSMENT ORDER DATED 06/12/2018. 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, INVOKING SECTION 263 IS BAD IN LAW AS THE ASSESSING OFFICER BEFORE PASSING THE ASSESSMENT ORDER DULY MADE VERIFICATION OR ENQUIRY BY ISSUE OF N OTICE AND OBTAINING EXPLANATION FROM THE APPELLANT. HENCE, THE ORDER PASSED BY LD PCIT U/S. 263 IS AGAINST THE PROVISION OF EXPLANATION 2 OF SECTION 263 OF THE ACT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, INVOKING SECTION 263 IS BAD IN LAW AS THE ASS ESSING OFFICER HAS TAKEN A PLAUSIBLE VIEW WHILE COMPLETING THE ASSESSMENT AND HENCE THE ASSESSMENT ORDER CANNOT BE TREATED AS ERRONEOUS WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE PC IT IS VOID AS THE LD PCIT HAS NOT CONDUCTED THE ENQUIRIES AND HAS NOT ESTABLISHED THAT THE ASSESSMENT ORDER PASSED IS UNSUSTAINABLE IN LAW. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD PCIT ERRED IN COMING INTO CONCLUSION THAT THE CLAIM OF AGRICULTURAL INCOME WAS ACCEPTED IN THE ASSESSMENT ORDER WITHOUT MAKING ENQUIRIES OR VERIFICATION BECAUSE AO HAS DONE DETAILED ENQUIRIES BY SENDING THE INSPECTOR OF INCOME TAX AND AFTER DUE VERIFICATION OF THE DOCUMENTS. 7. ON THE FACTS AND CIRCUMSTANCE OF THE CASE, LD PCIT ERRED IN GIVING FINDING THAT AO HAS NOT ENQUIR ED OR MADE VERIFICATION ABOUT THE HUMAN CONDUCT / BEHAVIOUR WITH RESPECT TO CHIT BIDDING AND WITHDRAWALS FROM THE BANK WHICH IS NOT RELEVANT BECAUSE LD PCIT HAS NOT CONTRADICTE D THE RECEIPT OF CHIT BID AND SUBSEQUENT CASH WITHDRAWAL FROM THE BANK WHICH IS INCREASED THE CASE IN HAND. 8. ON THE FACTS AND CIRCUMSTANCE OF THE CASE, LD PCIT FURTHER ERRED IN GIVING FINDING THAT AO HAS NOT ENQUIRED OR MADE VERIFICATION ABOUT THE HUMAN CO NDUCT / BEHAVIOUR WITH RESPECT TO HDFC LOAN RECEIPTS AND WITHDRAWALS FROM THE BANK WITH IS NOT RELEVANT BECAUSE LD PCIT HAS NOT CONTRADICTED THE RECEIPT OF LOAN FROM HDFC AND CASH WITHDRAWN FROM THE BANK WHICH INCREASED THE CASH IN HAND. 9. ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE LD. PCIT ERRED IN DIRECTING TO RE - DO THE ASSESSMENT DE NOVO FOR MAKING THE ENQUIRIES WITHOUT POINTING OUT HOW THE ASSESSMENT ORDER IS ERRONEOUS. 10. ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE PROFESSION AS CHARTERED ACCOUNTANT FILED HIS RETURN OF INCOME ON 8/2/2017 FOR THE AY 2016 - 1 7 DECLARING TAXABLE INCOME OF RS. 4,72,880/ - UNDER THE HEAD INCOME FROM BUSINESS, I NCOME FROM 3 PROFESSION, INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCE BESIDES AGRICULTURAL INCOME OF RS. 28 LAKHS. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY UNDER CASS AND THEREAFTER THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 6/12/2018 W HEREIN THE LD. AO ACCEPTED THE INCOME OF THE ASSESSEE AS DECLARED IN HIS RETURN OF INCOME. THEREAFTER, THE CASE OF THE ASSESSEE WAS TAKEN UP BY THE JURISDICTIONAL PRINCIPAL COMMISSIONER OF INCOME TAX AND INVOKING HIS POWERS U/S. 263 OF THE ACT SET ASIDE TH E ORDER OF THE LD. AO AND DIRECTED THE LD. AO TO RE - DO THE ASSESSMENT DE NOVO A GGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE FINDING OF THE LD. PCIT IS THAT THE AGRICULTURAL INCOME DECLARED BY THE ASSESSEE OF RS. 28 LAKHS, THE CHIT BID AMOU NT RECEIVED BY THE ASSESSEE FOR RS. 30,27,790/ - AND RS. 22,05,040/ - AND HDFC LOAN RECEIVED BY THE ASSESSEE FOR RS. 80,43,042/ - AND RS. 89,12,843/ - WH ERE ACCEPTED BY THE LD.AO IN THE ASSESSMENT ORDER WITHOUT MAKING ENQUIRIES AND VERIFICATION. 5. BEFORE US, THE LD. AR SUBMITTED THAT ALL THE DOCUMENTARY EVIDENCE WERE PRODUCED BEFORE THE LD. AO AND THE LD. AO AFTER EXAMINING THE SAME HAD ACCEPTED THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AND THEREFORE THE FINDING OF THE LD. PCIT IS NOT APPROPR IATE . THE LD. AR FURTHER SUBMITTED THAT THE LD. AO HAD EVEN MENTIONED IN THE ASSESSMENT ORDER THE DOCUMENTS EXAMINED BY HIM. IT 4 WAS THEREFORE PLEADED THAT THE ORDER OF THE LD. PCIT MAY BE SET ASIDE. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE LD. PCIT AND REQUESTED FOR SUSTAINING THE SAME. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. IN THE ASSESSMENT ORDER THE LD. AO HAS STATED THAT HE HAD EXAMINED THE CASH FLOW STATEMENT FOR THE RELEVANT ASSESSMENT YEAR, INCOME & EXPENDITURE STATEMENT, BALANCE SHEET, SOURCE OF CASH RECEIPTS, BANK STATEMENTS, PARTICULARS OF AGRICULTURAL INCOME, AGREEMENT IN RESPECT TO SALE OF AGRICULTURAL PRODUCE, DHARMA KANTA BILLS, DOCUMENTS REGARDING PURCHASE OF IMMOVABL E PROPERTY DURING THE RELEVANT ASSESSMENT YEAR, CASH BOOK, BANK BOOK ETC., AND THEREAFTER PASSED THE ASSESSMENT ORDER. FURTHER, FROM THE ORDER OF THE LD PCIT ITSELF IT IS APPARENT THAT THE LD. AO HAD ALSO MADE ENQUIRIES BY DEPUTING HIS INSPECTORS REGARDING THE AGRICULTURAL OPERATIONS CONDUCTED BY THE ASSESSEE AND THE AGRICULTURAL INCOME EARNED BY THE ASSESSEE FROM THE 130 ACRES OF AGRICULTURAL LAND WHICH WAS UNDER THE POSSESSION AND CONTROL OF THE ASSESSEE AND HIS FAMILY MEMBERS. THE ASSESSEE HAS ALSO STATE D BEFORE THE LD. PCIT THAT HE HAD PRODUCED THE PATTADAR PASS BOOK AND OTHER RELEVANT DOCUMENTARY EVIDENCE FOR EARNING AGRICULTURAL INCOME BEFORE THE LD. AO. FURTHER, IT IS EVIDENT FROM THE ORDER OF THE LD.PCIT THAT HE HAS PRODUCED THE SAME BEFORE HIM ALSO. SIMILARLY, AS REGARDS THE CHIT BID AMOUNTS RECEIVED BY THE ASSESSEE , THE ASSESSEE 5 HAS PRODUCED THE BANK STATEMENTS AND OTHER RELEVANT DOCUMENTS BEFORE THE LD. PCIT AND ALSO CLAIMED TO HAVE PRODUCED BEFORE THE LD. AO. W ITH RESPECT TO LOAN RECEIVED FROM HDFC BANK ALSO THE ASSESSEE HAD PRODUCED THE BANK STATEMENT BEFORE THE LD. PCIT AND ALSO CLAIMED TO HAVE PRODUCED THE SAME BEFORE THE LD. AO. IN THIS SITUATION, THE LD. PCIT WITHOUT EXAMINING THE DOCUMENTS FURNI SHED BY THE ASSESSEE SETTING ASIDE THE ORDER OF THE LD. AO AND DIRECTING THE LD. AO TO RE - DO THE ASSESSMENT DE NOVO IS NOT APPRECIABLE. IT IS APPARENT FROM THE ORDER OF THE LD. PCIT ITSELF THAT THE ASSESSEE HAD PRODUCED ALL THE REQUISITE DOCUMENTS BEFORE H IM. FROM THE ORDER OF THE LD. PCIT AND LD.AO IT IS APPARENT THAT THE LD.AO HAS NOT ONLY EXAMINED THE DOCUMENTS PRODUCED BY THE ASSESSEE BUT ALSO MADE ENQUIRIES THROUGH HIS INSPECTORS AND THEREAFTER CAME TO THE CONCLUSION THAT THE INCOME DECLARED BY THE A SSESSEE IN HIS RETURN OF INCOME IS IN ORDER. KEEPING IN VIEW OF THE SE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ORDER OF THE LD. PCIT IS DEVOID OF MERITS. THEREFORE, WE HEREBY SET ASIDE THE ORDER OF THE LD. PCIT AND REINSTATE THE OR DER OF THE LD. AO. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE 12 TH AUGUST , 2021 . SD/ - SD/ - ( C.N. PRASAD ) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER 6 HYDERABAD, DATED: 12 TH AUGUST , 2021 OKK COPY TO: - 1) SRI TALLURI SRINIVASULU , D.NO.60 - 7 - 13, GROUND FLOOR, SIDDHARTHA NAGAR, 4 TH LANE, VIJAYAWADA. 2) INCOME TAX OFFICER, WARD - 1, NELLORE. 3) THE PRINCIPAL COMMISSIONER OF INCOME TAX, 1 ST FLOOR, AAYAKAR BHAVA N, K.T ROAD, TIRUPATI - 517507 4) THE DR, ITAT, HYDERABAD 5) GUARD FILE