VASU KUMAR VADDI, MACHILIPATNAM V. INCOME TAX OFFICER, WARD-1, MACHILIPATNAM

ITA 20/VIZ/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6339 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-06-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 21-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Section: 147; 148; 144; 142(1); 69A

Judgement Text

आयकरअपीलीयअधधकरण, धिशाखापटणमपीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्रीदुव्िूरुआरएलरेड्डी, न्याधयकसदस्यएिंश्रीएसबालाकृष्णन, लेखासदस्यकेसमक्ष BEFORE SHRI DUVVURU RL REDDY, HON‟BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON‟BLE ACCOUNTANT MEMBER (Through Hybrid Hearing) आयकरअपीलसं./ I.T.A. No.20 & 21/Viz/2024 (धनधाारणिर्ा/ Assessment Year: 2013-14) Vasu Kumar Vaddi, 16/372-16-1, Valandapalem, Industrial Estate Road, Machilipatnam – 521002, Andhra Pradesh. PAN: AIFPV 6289 F Vs. Income Tax Officer, Ward-1, Machilipatnam. (अपीलाथी/ Appellant) (प्रत्यथी/ Respondent) अपीलाथीकीओरसे/ Assessee by : Sri K. Siva Ram Kumar, AR प्रत्याथीकीओरसे/ Revenue by : Dr. Aparna Villuri, Sr. AR सुनिाईकीतारीख/ Date of Hearing : 04/06/2024 घोर्णाकीतारीख/Date of Pronouncement : 25/06/2024 O R D E R PERS. BALAKRISHNAN, Accountant Member : Both the captioned appeals are filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld.CIT(A)-NFAC”] vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1058169213(1), dated 23/11/2023 for the AY 2013-14 arising out of the order 2 passed U/s. 147 r.w.s 144 of the Income Tax Act, 1961 [“the Act”] and against the order of the Ld. CIT(A)-NFAC vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1058169723(1), dated 23/11/2023 arising out of the order passed U/s. 271 of the Act for the AY 2013-14. Since both the appeals are filed by the same assessee and the issues raised therein are inter-connected by way of quantum appeal and the penalty appeal, these two appeals are clubbed, heard together and disposed off in this consolidated order. 2. Briefly stated the facts of the case (ITA No. 20/Viz/2024) are that the assessee, an individual, has not filed his return of income for the AY 2013-14. The case was reopened U/s. 147 of the Act and a notice U/s. 148 of the Act was issued and served on the assessee. The assessee has not filed his return of income even in response to the notice U/s. 148 of the Act. The Ld. AO from the information available in AIR-001 found that the assessee has made cash deposits amounting to Rs. 1,25,94,308/- in his savings bank account maintained at Andhra Bank, Machalipatnam Branch and ICICI Bank, Kurla Complex, Mumbai during the FY 2012-13. Considering the above facts and material evidences, the Ld. AO treated the amount of Rs. 1,25,94,308/- as 3 income escaped to tax and issued notice U/s. 148, dated 28/03/2021 after obtaining necessary approval from the Ld. Principal Commissioner of Income Tax. Subsequently, notices U/s. 142(1) of the Act dated 01/10/2021; 15/11/2021; 24/11/2021; 07/12/2021; 13/12/2021; 04/01/2022 and 24/01/2022 were issued to the assessee and called for certain information. The assessee has not responded to any of the notices issued above and thereafter the case was referred to the Verification Unit for service of notice. The Verification Unit has served the notice on 27/12/2021. In addition, the notice U/s. 144B(1)(xi) of the Act, dated 10/01/2022 was issued to the assessee stating that since the assessee has failed to furnish any details for completion of assessment proceedings thereby proposing the assessment to be completed U/s. 144 r.w.s 147 of the Act. The assessee failed to respond. Thereafter, the Ld. AO proceeded to complete the assessment under “Best Judgment Assessment” as per section 144 of the Act. The Ld. AO treated the amount of Rs. 1,25,94,308/- as „unexplained money‟ and brought to tax U/s. 69A r.w.s. 115BBE of the Act. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A)-NFAC. On appeal, the Ld. CIT(A)-NFAC found that the assessee has not filed any return of income and has also not paid 4 any advance tax as per section 249(4)(b) of the Act wherein the assessee has mentioned in Form-35, Sl. No. 9 “Not Applicable”. Therefore, the Ld. CIT(A)-NFAC, vide DIN & Letter No. ITBA/NFAC/F/APL_1/2023-24/1057796543(1), dated 8/11/2023 required the assessee to intimate whether he has made any payment of tax in compliance of notice U/s. 156 of the Act. In response, the assessee filed his reply dated 11/11/2023 admitting that he has not made any payment of amount equal to advance tax. The Ld. CIT(A)-NFAC observed in the assessee‟s reply that the assessee has stated that he has no taxable income for the AY 2013-14 and his income is below the taxable limit of Rs. 2 Lakhs and hence there is no liability to pay advance tax. The assessee also prayed for one month time to file paper book and written submissions before the Ld. CIT(A)-NFAC. Considering the assessee‟s reply, the Ld. CIT(A)-NFAC dismissed the appeal of the assessee by stating that the assessee has not paid amount equal to advance tax due on his income. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. Ina the f acts and circumstances of the case, the Ld. CIT(A)-NFAC erred in dismissing the appeal for non- observance of section 249(4)(b) by the appellant since the appellant has disputed the entire tax levied in the 5 assessment and there was no undisputed tax liable to be paid before the institution of the appeal. 2. In the f acts and circumstances of the case, the Ld. CIT(A) erred in considering the appellant’s representation made before him, of absence of taxable income and absence of liability of advance tax, before refusing to admit the appeal and dismissing the same erred in dismissal of the appeal. 3. In the f acts and circumstances of the case, the Ld. CIT(A)- NFAC erred in not adverting to the statement of f acts of the case and the grounds taken and erred in not adjudicating upon them. 4. In the f acts and circumstances of the case, Ld. CIT(A)- NFAC erred in not observing that the notice dated 28/03/2021 U/s. 148 issued by the jurisdictional AO (ITO, Ward-1, Machilipatnam) was not in accordance with the law being time-barred. 5. In the f acts and circumstances of the case, the Ld. Cit(A)- NFAC erred in not considering that the notice issued by the Learned Jurisdictional Assessing Officer was not as per section 151A and thus the same was bad in law. 6. In the f acts and circumstances of the case, Ld. CIT(A)- NFAC erred in dismissal of the appeal on pure technical reasons without passing orders on the merits of the case. 7. The appellant craves leave to add or amend any ground of appeal.” 3. At the outset, the Learned Authorized Representative [“Ld. AR”] argued thatthe assessee does not have any taxable income during the impugned year, the assessee is not liable to pay any advance taxas mandated U/s. 249(4)(b) of the Act. In this connection, the Ld. AR relied on the decision of the Coordinate Bench of ITAT, Raipur “SMC” in the case of Vishnusharan 6 Chandravanshi vs. ITO [2024] taxmann.com 803 (Raipur – Trib.), dated 10/04/2024. Per contra, the Ld. Departmental Representative [“Ld. DR”] heavily relied on the orders of the Ld. Revenue Authorities and argued in support of the same. 4. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee has made cash deposits amounting to Rs. 1,25,94,308/- in the bank account of the assessee but has failed to file the return of income during the impugned assessment year. It is also noticed that the assessee has not appeared before the Ld. AO and submitted the evidences in support of his contention that the assessee does not have taxable income for the AY 2013-14. Section 249(4)(b) of the Act will be triggered only when there is an obligation cast upon the assessee to pay advance tax. The assessee in his reply to the Ld. CIT(A)-NFAC, dated 11/11/2023, has stated that he does not have any taxable income for the AY 2013-14. We also find that the assessee has not utilized the opportunity as per the proviso to section 249(4) of the Act to make an application to the Ld. CIT(A)-NFAC citing good and sufficient reason to be recorded in 7 writing exempting him from the operation of the aforesaid statutory provisions. We therefore are of the considered view that it is a fit case to be remitted back to the file of the Ld. AO to examine the facts by providing one more opportunity of being heard to the assessee and decide the case in accordance with law. We therefore set-aside the order of the Ld. CIT(A)-NFAC and remit the matter back to the file of the Ld. AO for fresh adjudication as above. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 5. In the result, appeal of the assessee (ITA No. 20/Viz/2024) is allowed for statistical purposes as indicated herein above. ITA No. 21/Viz/2024 (AY 2013-14) 6. Since the grounds raised in quantum appeal of the assessee in ITA No. 20/Viz/224 (AY 2013-14) (supra) are allowed for statistical purposes and remitted the matter back to the file of the Ld. AO for fresh adjudication, this penalty appeal being consequential in nature is also being remitted back to the file of the Ld.AO. Accordingly, the grounds raised in this appeal (ITA No. 21/Viz/2024) are allowed for statistical purposes. 8 7. In the result, appeal of the assessee (ITA No. 21/Viz/2024) is allowed for statistical purposes. 8. Ex-consequenti, both the appeals of the assessee are allowed for statistical purposes. Pronounced in the open Court on 25 th June, 2024. Sd/- Sd/- (दुव्िूरु आर.एलरेड्डी) (एसबालाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याधयकसदस्य/JUDICIAL MEMBER लेखासदस्य/ACCOUNTANT MEMBER Dated : 25.06.2024 OKK - SPS Copy of the order forwarded to:- 1. धनधााररती/ The Assessee–Vasu Kumar Vaddi, 16/372-16-1, Valandapalem, Industrial Estate Road, Machilipatnam – 521002, Andhra Pradesh. 2. राजस्ि/The Revenue –Income Tax Officer, Ward-1, Machilipatnam. 3. The Principal Commissioner of Income Tax, 4. आयकरआयुक्त (अपील)/ The Commissioner of Income Tax 5. धिभागीयप्रधतधनधध, आयकरअपीलीयअधधकरण, धिशाखापटणम/ DR,ITAT, Visakhapatnam 6. गाडाफ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam