SANNIDHI VENKATESWARA RAO, VISAKHAPATNAM V. Joint Commissioner of Income Tax, Range-1, Visakhapatnam

ITA 231/VIZ/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9397 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 12-12-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 28-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MADHKAR AVES
• Assessee Lawyers: B.VINAY GANDHI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 271D; 271E

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.231/Viz/2023 & 232/Viz/2023 (ननधधारण वर्ा / Assessment Year : 2011-12) Sannidhi Venkateswara Rao 31-31-15/1, 1 st Floor Ramya Pharmaceuticals Sai Baba Street Dabagardens, Visakhapatnam [PAN : AACHR1320Q] Vs. Joint.Commissioner of Income Tax Range-1 Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri B.Vinay Gandhi, AR प्रत्यधथी की ओर से / Respondent by : Shri Madhkar Aves, DR सुनवधई की तधरीख / Date of Hearing : 13.12.2023 घोर्णध की तधरीख/Date of Pronouncement : 21.12.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : These appeals are filed by the assessee against the orders of the Commissioner of Income Tax (Appeal) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFA/ S/250/2023-24/1054062121(1) and ITBA/NFAC/S/250/2023-24/ 1054062340(1) dated 30.06.2023, arising out of the penalty orders passed u/s 271D and 271E of the Income Tax Act, 1961 (in short “Act”) 2 I.T.A. No.231/Viz/2023 & 232/Viz/2023, A.Y. 2011-12 Sannidhi Venkateswara Rao, Visakhapatnam dated 30.09.2016 for the Assessment Year (A.Y.) 2011-12. Since the grounds raised in these appeals are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. Facts are extracted from I.T.A.231/Viz/2023. 2. Brief facts of the case are that the assessee HUF, a pharmaceutical distributor, carrying business under the proprietary concern, M/s Ramya Pharmaceuticals at Visakhapatnam, filed his return of income for the A.Y.2011-12 on 11.09.2011, declaring a total income of Rs.8,57,072/-. Subsequently, the case was selected for scrutiny and the assessment was completed by the Assessing Officer(AO) u/s 143(3) of the Act on 27.02.2014 assessing total income at Rs.10,07,072/-, thereby making lumpsum disallowance of Rs.1,50,000/- on account of expenditure which was supported by self-made cash vouchers. Thereafter, the AO had sent a proposal for initiation of penalty u/s 271D of the Act to the office of Joint Commissioner of Income Tax, Range-1, Visakhapatnam, accordingly, penalty proceedings u/s 271D of the Act were initiated by issue of notice dated 14.03.2016 to show cause as to why an order imposing penalty should not be made u/s 271D of the Act for the A.Y.2011-12.. The assessee was asked to submit the details of loans received and repaid by the assessee during the A.Y.2011-12 along with mode of receipt and 3 I.T.A. No.231/Viz/2023 & 232/Viz/2023, A.Y. 2011-12 Sannidhi Venkateswara Rao, Visakhapatnam payment. In response, the AR of the assessee appeared and submitted Power of Attorney along with the details as called for earlier. Thereafter the case was posted for hearing on 23.09.2016, however, since the assessee did not appear on the said date, the proceedings were finalized on the basis of information available on record. From the confirmations obtained during the assessment proceedings and submissions made by the Ld.AR during the course of penalty proceedings, the Ld.AO/JCIT analysed the details of loans advanced and repaid and found that the assessee had received advances by way other than account payee cheques. The assessee has not submitted any proof of bank statement either in the assessment proceedings or in the penalty proceedings, in support of advances received by way of account payee cheques. The assessee’s submissions that they were in the nature of medicine supplied was not accepted as there is a requirement of Drug License for conducting retail trade in medicinal goods and the assessee has not submitted any conclusive proof in the form of drug license etc. pertaining to the persons who advanced loans to him. The AO/JCIT analysed the aggregate of loans of more than Rs.20,000/-, which the assessee had accepted by means other than account payee cheque or account payee bank draft and arrived at the penalty leviable at the sum equal to the 4 I.T.A. No.231/Viz/2023 & 232/Viz/2023, A.Y. 2011-12 Sannidhi Venkateswara Rao, Visakhapatnam amount of loan taken or accepted in contravention of the provisions of section 269SS of the Act u/s 271D of the Act at Rs.16,46,527/-. 3. Aggrieved by the penalty order u/s 271D, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) sustained the penalty levied by the AO/JCIT and dismissed the appeal of the assessee. 4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal : A. Order passed by Learned Commissioner of Income Tax (Appeals) is against principles of natural justice since all information submitted before the officer is not considered while passing the order in appeal. B. The learned officer in para 5.4 of the impugned order mentioned that the details of transactions through bank channel were not submitted before him. However, Appellant wishes to submit that the bank statement where the transactions are highlighted was scanned and submitted vide Acknowledgement No.920268131120123 but the same was not considered while passing the impugned order. This is violation of principles of natural justice and hence these proceedings are to be quashed. C. Appellant wishes to submit that the table in Annexure clearly states the name of person from whom loan is received, mode of receipt and reference to bank statements. The penalty may please be adjusted after considering the bank statements. D. Appellant prays to remand the matter back to Assessing Officer for considering the relevant documents and bank statements while computing penalty. 5. The only grievance of the Ld.AR is that the assessee has submitted the details of transactions made through banking channel and submitted 5 I.T.A. No.231/Viz/2023 & 232/Viz/2023, A.Y. 2011-12 Sannidhi Venkateswara Rao, Visakhapatnam the same before the Ld.CIT(A), but the same was not considered. The Ld.AR further submitted that the plea of the assessee seeking remand of the matter to the AO to submit the details before the AO was also not considered by the Ld.CIT(A). The Ld.CIT(A) passed the order ignoring the plea of the assessee in violation of principles of natural justice. He, therefore pleaded to quash the orders passed by the revenue authorities and delete the addition made. 6. Per contra, the Ld.DR contended that the Ld.CIT(A) is justified in sustaining the addition made by the AO/JCIT u/s 271D, as the assessee received the advances other than by account payee cheques, violating the provisions of section 269SS. He, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee. 7. We have heard both the parties and perused the material available on record. The main contention of the assessee is that all the transactions were made through banking channels only, but the Ld.AO as well as the Ld.CIT(A) did not examine the details filed by the assessee. The Ld.AR submitted that the bank statements were produced on ITBA portal, but without considering the same, both the revenue authorities passed the order. The Ld.AR also filed all the details before us and on examination of the same, prima facie the bank statements establish that some 6 I.T.A. No.231/Viz/2023 & 232/Viz/2023, A.Y. 2011-12 Sannidhi Venkateswara Rao, Visakhapatnam transactions were done through banking channels only, but not by cash. Therefore, we remit the matter back to the file of the AO to examine all the details filed by the assessee and pass speaking order after giving opportunity of being heard to the assessee. The assessee is also directed to adhere to the notices issued by the revenue authorities and provide the required information by way of cogent material evidence to substantiate his case. Accordingly, all the grounds raised by the assessee are allowed for statistical purpose. 8. Since the appeal of the assessee in I.T.A. No.231/Viz/2023 is allowed for statistical purpose, the appeal of the assessee in I.T.A.No.232/Viz/2023 is also allowed for statistical purpose, mutatis mutandis for the A.Y.2011-12. 9. In the result, appeals of the assessee are allowed for statistical purpose. Order pronounced in the open court on 21 st December , 2023. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 21.12.2023 L.Rama, SPS 7 I.T.A. No.231/Viz/2023 & 232/Viz/2023, A.Y. 2011-12 Sannidhi Venkateswara Rao, Visakhapatnam आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee–Shri Sannidhi Venkateswara Rao, 31-31-15/1, 1 st Floor, Ramya Pharmaceuticals, Sai Baba Street, Dabagardens, Visakhapatnam 2. रधजस्व/The Revenue – The Joint.Commissioner of Income Tax, Range-1, 4 th Floor, Direct Taxes Building, MVP Colony, Visakhapatnam 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam