Gangula Prabhakar Reddy, Hyderabad V. Income Tax Officer, Ward-9(3), Hyderabad

ITA 1809/Hyd/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7075 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 15-10-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 03-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWAL
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Unexplained investment; Peak credit
• Section: 143(1); 143(2); 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B - SMC, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NOS.1808 & 1809/HYD/2017 ASSESSMENT YEAR: 2009 - 10 SRI GANGULA PRABHAKAR REDDY, 78, SRI VIDYA TOWNSHIP, BADANGPET, NADERGUL, HYDERABAD. PAN: AGAPG 3864 E VS. INCOME TAX OFFICER, WARD - 9(3), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.A. SAI PRASAD, CA REVENUE BY: SRI RAJEEV BENJWAL, DR DATE OF HEARING: 15/10/2019 DATE OF PRONOUNCEMENT: 18 /10/2019 ORDER TH ESE TWO APPEAL S ARE FILED BY THE ASSESSEE AGAINST THE ORDER S OF THE LD. CIT(A) - 9 , HYDERABAD IN APPEAL NO S . 0126/ITO, WARD - 9(3)/2016 - 17 & 0073/ITO, WARD - 9(3)/2014 - 15 BOTH DATED 25/05/2017 PASSED U/S. 14 4 R.W.S 250(6) AND 144 R.W.S 271(1)(B) OF THE ACT RESPECTIVELY FOR THE AY 2009 - 10. ITA NO. 1808/HYD/2017: 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS ERRED IN CONFIRMING THE 2 ORDER PASSED BY THE LD. AO U/S. 144 OF THE ACT FOR TREATING THE PEAK CASH CREDIT OF RS. 10,09,713/ - IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN BUSINESS FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 27/7/2009 ADMITTING TOTAL INCOME O F RS. 1,64,706/ - . INITIALLY, THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS. THEREAFTER THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT BY TREATING THE PEAK CREDIT IN THE BANK ACCOUNT OF TH E ASSESSEE AS THE UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT VIDE ORDER DATED 26/12/2011 SINCE THE ASSESSEE HAD NOT FURNISH ANY EXPLANATION AND HAD FURTHER FAILED TO RESPOND TO THE NOTICE SERVED FOR APPEARANCE . ON APPEAL, THE LD. CIT (A) CONFIRMED THE ORDE R OF THE LD. AO AS HE FAILED TO APPEAR BEFORE HIM ALSO ON THE GIVEN DATE OF HEARING AND NO EXPLANATION WAS SUBMITTED. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE OUTSET, THE LD. AR PLEADED BEFORE ME STATING THAT THE ASSESSEE WAS IN CONTINUOUS BUSINESS AND HAD FILED HIS RETURN OF INCOME. IT WAS FURTHER PLEADED THAT KEEPING IN VIEW OF THE FINANCIAL STATUS OF THE ASSESSEE RELIEF MAY BE GRANTED. THE LD. DR ON T HE OTHER HAND 3 VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE LD. AR AND REQUESTED FOR CONFIRMING THE ORDERS OF THE LD. REVENUE AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. THE ASSESSEE HAD FAILED TO CO - OP ERATE BEFORE THE LD. AO AND THE LD. CIT (A) THEREFORE, THE LD. REVENUE AUTHORITIES WERE LEFT WITH NO OTHER OPTION BUT TO TREAT THE PEAK CREDIT IN THE BANK ACCOUNT OF THE ASSESSEE OF RS. 10,09,713/ - AS HIS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT. HOWEVER , CONSIDERING THE SUBMISSION OF THE LD. AR, I AM OF THE OPINION THAT KEEPING IN VIEW OF THE PAST BUSINESS ACTIVITIES OF THE ASSESSEE AS WELL AS THE FINANCIAL STATUS OF THE ASSESSEE CERTAIN RELIEF OUGHT TO BE GRANTED BY CONSIDERING HIS ACCUMULATED CAPITAL. THEREFORE, IN THE INTEREST OF JUSTICE, I HEREBY DIRECT THE LD.AO TO TREAT THE AMOUNT OF RS. 6,09,713/ - LAKHS AS THE ASSESSEES ACCUMULATED CAPITAL AND THE BALANCE AMOUNT OF RS. 4 LAKHS AS HIS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT. IT IS ORDERED ACCO RDINGLY. ITA NO.1809/HYD/2017: 6. THE ASSESSEE HAS RAISED THREE GROUNDS IN HIS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF THE LD. AO WHO HAD LEVIED PENALTY OF RS. 30,000/ - BY INVOKING THE PROVISIONS OF SECTION 271(1)(B) OF THE ACT. 4 7. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FAILED TO COMPLY WITH THE NOTICE ISSUED U/S. 143(2) OF THE ACT SINCE HE HAD NEITHER APPEAR ED BEFORE THE LD. AO NOR SORT ADJOURNMENT ON THE DATE OF HEARING . THEREFORE, FOR EACH OF THE NON - COMPLIANCE WITH RESPECT TO THE THREE INSTANCES OF NON - APPEARANCE ON THE DATE OF HEARING, THE LD. AO INVOKED THE PENAL PROVISIONS OF SECTION 271(1)(B) OF THE ACT AND LEVIED PENALTY OF RS. 10,000/ - EACH AGGREGATING TO RS. 30,000/ - . ON APPEAL, BEFORE THE LD. CIT (A) ALSO THE ASSESSEE DID NOT APPEAR AT THE TIME OF HEARING AND FURTHER DID NOT FURNISH ANY EXPLANATION. THEREFORE, THE LD. CIT (A) CONFIRMED THE ORDER OF THE LD. AO. 8. AT THE OUTSET, LD. AR SUBMITTED BEFORE ME THAT DUE TO UNAVOIDABLE CIRCUMSTANCES, THE ASSESSEE COULD NOT APPEAR BEFORE THE LD. CIT (A) AND THE LD. AO AT THE TIME OF HEARING. IT WAS THEREFORE PLEADED THAT THE PENALTY LEVIED BY THE LD. AO MAY BE DELETED. ON THE OTHER HAND, LD. DR VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE LD. AR AND REQUESTED FOR CONFIRMING THE ORDERS OF THE LD. REVENUE AUTHORITIES. 9. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE ORDER OF THE LD. AO I FIND THAT ONLY WITH RESPECT TO THE NOTICE ISSUED U/S. 143(2) OF THE ACT DATED 28/11/2011 WAS ACKNOWLEDGED BY THE ASSESSEE. WITH RESPECT TO THE TWO OTHER NOTICES ISSUED U/S. 143(2) DATED 03/06/2011 AND 5 01/08/2011 IT IS NOT CLEAR WHETHER TH E ASSESSEE HAS RECEIVED THE NOTICE. NO FURTHER EXPLANATION IS SUBMITTED BEFORE US BY THE REVENUE TO JUSTIFY THEIR STAND. CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE WOULD BE LIABLE FOR PENALTY FOR NON - COMPLIANCE WITH RESPECT TO THE NOTICE ISSUED U/S. 143(2) OF THE ACT DATED 28/11/2011 WHEREIN THE ASSESSEE HAD ACKNOWLEDGED REC E IPT . HENCE, I HEREBY SUSTAIN THE PENALTY LEVIED U/S. 271(1)(B) OF THE ACT FOR RS. 10,000/ - AND DIRECT THE LD. AO TO DELETE THE B ALANCE LEVY OF PENALTY AMOUNTING TO RS. 20,000/ - WITH RESPECT TO NON - COMPLIANCE OF NOTICE ISSUED U/S. 143(2) OF THE ACT DATED 03/06/2011 AND 01/08/2011. IT IS ORDERED ACCORDINGLY. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. PR ONOUNCED IN THE OPEN COURT ON 18 TH OCTOBER, 2019. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 18 TH OCTOBER , 2019 OKK COPY TO: - 1) SRI GANGULA PRABHAKAR REDDY , C/O. KATRAPATI & ASSOCIATES, 1 - 1 - 298/2/B/3, 1 ST FLOOR, SOWBHAGYA AVENUE, ASHOK NAGAR, HYDERABAD - 020. 2) INCOME TAX OFFICER, WARD - 9 (3), IT TOWERS, AC GUARDS, HYDERABAD - 500004. 3) THE CIT(A) - 9 , HYDERABAD 4) THE PR. CIT - 9 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE