SATYAVATHI GOLKONDA, MACHILIPATNAM V. INCOME TAX OFFICER, WARD-1, MACHILIPATNAM

ITA 219/VIZ/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5180 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 06-08-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 13-05-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Keywords: Salary income; Principle of natural justice; Additional evidence
• Section: 147; 69; 148; 144; 133(6)

Judgement Text

आयकर अपीलीयअिधकरण, िवशाखापटणम SMC पीठ, िवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM ᮰ी दु᭪वूᱧ आर एल रे᲻ी, ᭠याियक सद᭭य के समᭃ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER (Through Hybrid Hearing) आयकर अपील सं./ I.T.A. No. 219/Viz/2024 (िनधाᭅरण वषᭅ / Assessment Year : 2016-17) Satyavathi Golkonda, MIG-102, Old APHB Colony, Machilipatnam, Krishna District, Andhra Pradesh – 521001. PAN: ATTPG1361J Vs. Income Tax Officer, Ward-1, Aayakar Bhavan, Paraspet, Machilipatnam, Andhra Pradesh-521001. (अपीलाथᱮ/ Appellant) (ᮧ᭜यथᱮ/ Respondent) अपीलाथᱮ कᳱ ओर से/ Appellant by : Sri K. Siva Ram Kumar, AR ᮧ᭜याथᱮ कᳱ ओर से / Respondent by : Dr. Aparna Villuri, Sr. AR सुनवाई कᳱ तारीख / Date of Hearing : 07/08/2024 घोषणा कᳱ तारीख/Date of Pronouncement : 08/08/2024 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)-NFAC”] in DIN & Order No. ITBA/NFAC/S/250/2024-25/1064273014(1), dated 22/04/2024 arising out of the order passed U/s. 144 of the Income Tax Act, 1961 [“the Act”] for the AY 2016-17. 2 2. Briefly stated the facts of the case are that the assessee is an individual. The assessee has not filed her return of income for the AY 2016-17. As per the information available with the Department, the Ld. AO observed that the assessee is deriving income from salary. During the FY 2015-16 the assessee purchased an immovable property and has not filed the return of income for the AY 2016-17. The Ld. AO further observed that the assessee has purchased a house property from Smt. Golkonda Padmaja in the FY 2015-16 for a total consideration of Rs. 36,00,000/- out of which Rs. 29,00,000/- was bank loan and the balance of Rs. 7,00,000/- was paid by cash. The Ld. AO also observed that the assessee is not having any source for the payment of Rs. 7 lakhs and there were no withdrawals from the assessee’s bank account. Therefore, the case was reopened by issue of notice U/s. 148 of the Act dated 29/03/2021. In response, the assessee has not filed the return of income for the AY 2016-17. As there was no compliance to the notices issued and no response from the assessee, the Ld. AO issued a show cause notice U/s. 144 of the Act was issued and served on the assessee on 22/01/2022. The assessee has not replied to the said show cause notice. In the meantime, the Ld. AO issued notice U/s. 133(6) of the Act dated 09/02/2022 to the State Bank 3 of India and called for the information with regard to the assessee’s bank account and obtained the information as called for. Considering the assessee’s non-compliance to the notice issued U/s. 142(1), the Ld. AO invoked the provisions of section 144(1)(b) of the Act and proceeded to complete the assessment as best judgment assessment. During the assessment proceedings, the Ld. AO asked the assessee to produce the documentary evidence in respect of salary received during the year and also to furnish the details with respect to purchase of immovable property amounting to Rs. 36,00,000/- and cash payment of Rs. 7,00,000/-. However, the assessee did not furnish any details / documentary evidence. As per 26AS the Ld. AO observed that the assessee has received an amount of salary at Rs. 42,050/-. The Ld. AO also observed that the assessee has availed bank loan to the extent of Rs. 29,00,000/-. But, the assessee did not furnish any details with regard to the cash payment of Rs.7,00,000/- for purchase of the property. Therefore, the Ld. AO treated Rs. 7,00,000/- as unexplained investment U/s. 69 of the Act and added the same to the total income of the assessee. The Ld. AO further added a sum of Rs. 42,050/- disallowing the assessee’s claim of salary income since the assessee assessee has not filed the return of income for the AY 2016-17. Thus, the Ld. AO 4 completed the assessment and determined the assessed income at Rs. 7,42,050/- and passed the assessment order U/s. 147 r.w.s 144 r.w.s 144B of the Act, dated 16/03/2022. The Ld. AO also initiated the penalty proceedings U/s. 271(1)(c), 271(1)(b) and 271F of the Act. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC. 3. On appeal, the Ld. CIT(A)-NFAC has passed ex-parte order and dismissed the appeal of the assessee as the assessee has not responded to the notices issued for hearing of the appeal. 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. In the facts and circumstances of the case, the Ld. CIT(A) erred in not referring the appellant’s humble petition for admission of additional evidence, as per Ru-46A, Income Tax Rules, 1962 enclosed with additional evidence annexed to Form-35 to the jurisdictional AO before dismissal of the appeal for non-response, which action was unjustif ied in law (and held so by the Coordinate Bench also recently). 2. In the facts and circumstances of the case, the Ld. CIT(A) ought not to have dismissed the appeal ex-parte without considering the merits of the case; the appellant has been a Government Teacher with f air salary income and had explainable sources for the investment in acquisition of the house as per the evidence attached to the Appeal Memorandum in Form 35 and the addition made in the assessment merits deletion on f acts. 3. The appellant craves leave to add or amend any ground of appeal.” 5 4. At the outset, the Learned Authorized Representative [“Ld. AR] submitted that the Ld. CIT(A)-NFAC has erred in not considering the additional evidence submitted before him. The Ld. AR further submitted before me that the Ld. CIT (A)-NFAC has passed ex-parte order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (A)-NFAC in order to provide one more opportunity to the assessee of being heard. 5. Ld. Departmental Representative [“Ld. DR”], on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that several opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee nor her Representative has responded to the notices issued nor filed any details / submissions as called for by the Ld. CIT (A)-NFAC. It was further submitted that, under these circumstances, the Ld. CIT (A)-NFAC had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A)-NFAC does not call for any interference. 6. I have heard the both the sides and carefully perused the materials on record. On examining the facts of the case, I find that the Ld. CIT (A)- 6 NFAC had posted the case on several occasions. However, there was no response on behalf of the assessee before the CIT(A)-NFAC on the dates of hearing with regard to the details / submissions as called for by the Ld. CIT(A)-NFAC. Therefore, the Ld. CIT (A)-NAFC was left with no other option except to adjudicate the appeal ex-parte and dismissed appeal in- limine. In this situation, considering the issues involved in the appeal, I am of the view that the Ld. CIT(A)-NFAC ought to have considered the additional evidence submitted before him and decided the case on merits instead of dismissing the appeal in-limine. However, considering the issues involved in the appeal as well as considering the prayer of the Ld. AR, and by strictly following the principles of natural justice, I hereby remit the matter back to the file of Ld. CIT (A)-NFAC with a direction to consider the additional evidence submitted before him in order to adjudicate the appeal afresh and decide the case on merits by providing one more opportunity to the assessee of being heard in accordance with the principles of natural justice. At the same breath, I also hereby caution the assessee to promptly co-operate before the Ld. CIT (A)-NFAC in the proceedings failing which the Ld. CIT (A)-NFAC shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly. 7 7. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove. Pronounced in the open Court on 08 th August, 2024. Sd/- (दु᭪वूᱧ आर.एल रे᲻ी) (DUVVURU RL REDDY) ᭠याियकसद᭭य/JUDICIAL MEMBER Dated :08/08/2024. OKK - SPS आदेश की Ůितिलिप अŤेिषत /Copy of the order forwarded to:- 1. िनधाᭅᳯरती/ The Assessee – Satyavathi Golkonda, MIG-102, Old APHB Colony, Machilipatnam, Krishna District, Andhra Pradesh – 521001. 2. राज᭭व/The Revenue – Income Tax Officer, Ward-1, Aayakar Bhavan, Paraspet, Machilipatnam, Andhra Pradesh-521001. 3. The Principal Commissioner of Income Tax, 4.आयकर आयुᲦ (अपील)/ The Commissioner of Income Tax (Appeals), 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, िवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाडᭅ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam