Prema Bai , Hyderabad V. Income Tax Officer, Ward-7(2), Hyderabad

ITA 2327/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3755 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 30-01-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 18-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L SURESH
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Unexplained investment; Tax effect
• Section: 201; 148

Judgement Text

6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A - SMC BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO. 2327 /HYD./201 8 ASSESSMENT YEAR: 201 0 - 11 SMT. PREMA BAI VS. ITO, WARD 7 (2) 14 - 1 - 126, SITARAMPET HYDERABAD ASIF NAGAR HYDERABAD 500 028 PAN: CZSPB 9058A (APPELLANT) (RESPONDENT) FOR ASSESSEE : SH. B. SHANTHI KUMAR, AR. FOR REVENUE : SH. L. SURESH, D.R. DATE OF HEARING : 30 /0 1 /2020 DATE OF PRONOUNCEMENT : 28 /02 /2020 O R D E R THIS IS ASSESSEES APPEAL FOR A.Y. 201 0 - 11 AGAINST THE ORDER OF LD.CIT(A) - 3 , HYDERABAD DATED 1 0.10.2018 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL DOING TAILORING BUSINESS. SINCE SHE DID NOT HAVE ANY TAXABLE INCOME, SHE NEVER FILED HER RETURN OF INCOME. THE AO RECEIVED INFORMATION THAT THE ASSESSEE HAS P URCHASED HOUSE PROPERTY BEARING G M HC NO. 14 - 1 - 126/4/B ADMEASURING 80 SQ.YARDS SITUATED AT SEETHARAMPET, HYDERABAD ON 07. 0 1.2010 VIDE DOCUMENT NO. 29/2010. IN ORDER TO VERIFY THE SOURCE FOR INVESTMENTS MADE IN THE PURCHASE OF SAID PROPERTY, THE ITA NO. 2327/HYD/2018 AY: 2010 - 11 SMT. PREMA BAI, HYD. 2 ASSESSMENT WAS REOPENED BY ISSUANCE OF A NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (THE ACT) ON 31.03.2017. THERE WAS NO RESPONSE FROM THE ASSESSEE TO THE SAID NOTICE NOR DID THE ASSESSEE FILE ANY RETURN OF INCOME. THEREAFTER , THERE WAS A CHANGE IN THE INCUMBENT IN THE OFFICE OF THE AO AND THEREAFTER , THE NEW OFFICER ISSUED A FRESH NOTICE. THE ASSESSEES A.R. APPEARED AND EXPLAINED THAT THE ASSESSEE HAD MADE INVESTMENTS OUT OF HER FAMILY SAVINGS. IT WAS SUBMITTED THAT ASSESSEE EARNS RS.8000/ - TO 10,000/ - FROM TAILORING AND HER THREE SONS , WHO WERE DOING PRIVATE JOBS , CONTRIBUTED FOR THE INVESTMENT. IT WAS ALSO STATED THAT HER SONS WERE ALSO EARNING A SU M OF RS.6,000/ - TO 8,000/ - P.M. THE AO CONSIDERED ASSESSEES CONTENTIONS AND OBSERVED THAT THE ASSESSEE HAD MADE INVESTMENTS OF RS.1 4,53,5 8 0/ - TOWARDS PURCHASE OF THE PROPERTY AND REGISTRATION CHARGES THEREO N AND NEITHER ASSESSEE NOR HER SONS WERE HAVING ANY BANK ACCOUNT TO SUBSTANTIATE THE CLAIM AND THAT THE FAMILY CONSISTS OF PARENTS, 3 SONS AND 3 DAUGHTERS AND THEREFORE, THEY COULD NOT HAVE MADE SUCH SAVINGS . THE AO GAVE THE BENEFIT OF RS.2 LAKHS EACH FOR THE ASSESSEE ( MOTHER ) AND 2 SONS AND BROUGH T THE BALANCE RS.8 ,53,580/ - TO TAX AS UNEXPLAINED INVESTMENTS. 3. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DISMISSED THE SAME AS NOT MAINTAINABLE BECAUSE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME AND HAS NOT PAID THE ADMITTED TAX U/S 249 (4 )( B) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL RAISING T HE FOLLOWING GROUND. ITA NO. 2327/HYD/2018 AY: 2010 - 11 SMT. PREMA BAI, HYD. 3 CIT(A) ERRED IN DISMISSING THE APPEAL AS NOT MAINTAINABLE WITHOUT AFFORDING REASONABLE OPPORTUNITY: TAX EFFECT RS.4,56,237/ - . 5. THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AO AND SUBMITTED THAT THE ASSESSEE HAS NEVER HAD ANY TAXABLE INCOME AND THEREFORE, SHE NEVER FILED RETURN OF INCOME FOR ANY A.Y. INCLUDING FOR THE RELEVANT A.Y. HE SUBMITTED THAT ASSESSEE S CO NTENTION OF FAMILY SAVINGS FOR MAKING INVESTMENT IN THE PROPERTY HAS NOT BEEN ACCEPTED BY THE AO AND ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) WHO HAS ERRONEOUSLY HELD THAT THE ASSESSEE HAS NOT PAID ADMITTED TAXES, THEREFORE, APPEAL WAS NOT MAINTAINABLE. HE FURTHER SUBMITTED THAT SINCE ASSESSEE HAS NOT FILED RETURN OF INCOME , THERE IS NO ADMITTED TAX LIABILITY AND THERE IS NO REQUIREMENT TO PAY TAXES . T HEREFORE, HE REQUESTED THAT THE MATTER MAY BE REMITTED BACK TO CIT(A) FOR DECISION ON MERITS. 6. LD.DR WAS ALSO HEARD. 7. HAVING REGARD TO RIVAL CONTENTIONS AND MATERIAL PLACED ON RECORD, I FIND THAT THE ASSESSEE IS DOING TAILORING WORK, THEREFORE, DOES NOT SEEM TO BE HAVING TAXABLE INCOME TO FILE THE RETURN OF INCOME FOR THE RELEVANT A.Y. EVEN IN R ESPONSE TO NOTICE U/S 148 OF THE ACT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME. THEREFORE, THERE IS NO CASE OF ANY ADMITTED TAX TO BE PAID BY THE ASSESSEE. THE AO HAS NOT ACCEPTED ASSESSEES EXPLANATION THAT THE ENTIRE AMOUNT OF INVESTMENT IS OUT O F FAMILY SAVINGS . HE HAS ACCEPTED ONLY PART OF EXPLANATION OF THE ASSESSEE AND HAS BROUGHT THE BALANCE AMOUNT TO TAX. THEREFORE, THE CIT(A)S OBSERVATION THAT THE ASSESSEE HAS NOT PAID ADMITTED TAXES AND HENCE THE APPEAL IS ITA NO. 2327/HYD/2018 AY: 2010 - 11 SMT. PREMA BAI, HYD. 4 NOT MAINTAINABLE IS NOT SUSTAINABLE. IN VIEW OF THE SAME I DEEM IT FIT AND PROPER TO REMAND THIS APPEAL TO THE FILE OF CIT(A) WITH THE DIRECTION TO ADJUDICATE THE SAME ON MERITS. NEEDLESS TO MENTION THAT ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF BEING H EARD. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 28 TH FEBRUARY, 2020. SD/ - (P MADHAVI DEVI) JUDICIAL MEMBER DATED: 28 TH FEBRUARY, 2020 . *GMV COPY FORWARDED TO: 1. SMT. PREMA BAI , H.NO. 14 - 1 - 126, SITARAMPET, ASIF NAGAR, HYDERABAD 500 028 . 2. ITO, WARD 7(2), HYDERABAD. 3. ACIT, RANGE 7, HYDERABAD. 4. CIT(A) - 3, HYDERABAD 5. PR.CIT - 3, HYDERABAD. 6. D.R. ITAT HYDERABAD . 7. GUARD FILE ITA NO. 2327/HYD/2018 AY: 2010 - 11 SMT. PREMA BAI, HYD. 5 1. DRAFT DICTATED ON 2 6 /02/2020 2. DRAFT PLACED BEFORE THE AUTHOR 27/02/2020 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 6. KEPT FOR PRONOUNCEMENT 28 /02/2020 7. FILE SENT TO BENCH CLERK