Lakkakula Koteswara Rao, Hyd, Hyderabad V. ITO, Ward-6(3), Hyd, Hyderabad

ITA 235/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6193 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 29-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 01-03-2016
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Section: 142(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 235/HYD/2016 ASSESSMENT YEAR: 2005-06 MR. LAKKAKULA KOTESWARA RAO, HYDERABAD [PAN: ABAPL8420A] VS INCOME TAX OFFICER, WARD-6(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : NONE FOR REVENUE : SMT SUMAN MALIK, DR DATE OF HEARING : 24-01-2017 DATE OF PRONOUNCEMENT : 31-01-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-9, HYDERABAD D ATED 11-12-2015. IN SPITE OF ISSUING THREE NOTICES POSTING THE CASE ON 25-06-2016, 15-09-2016 AND 29-11-2016, NONE APPEARE D ON BEHALF OF ASSESSEE. HENCE, FRESH NOTICE BY RPAD WAS ISSUED ON 29- 11-2016 POSTING THE CASE ON 24-01-2017. HOWEVER, THE NOTICE CAME BACK UN-SERVED. SINCE WHEREABOUTS OF ASSESSEE A RE NOT KNOWN AND SUFFICIENT NOTICES WERE ISSUED TO ASSESSEE, APPEAL IS TAKEN EX-PARTE ASSESSEE ON MERITS. 2. BRIEFLY STATED FACTS ARE THAT BASED ON CERTAIN INFORM ATION REGARDING PURCHASE OF PROPERTY AS PER AIR DATA, A NO TICE U/S. I.T.A. NO. 235/HYD/2016 MR. LAKKAKULA KOTESWARA RAO :- 2 - : 142(1) OF THE ACT WAS ISSUED FOR AY. 2005-06. AS SEEN FROM THE PRESENT ASSESSMENT ORDER, AN ASSESSMENT WAS COMPLETED EARLIER U/S. 144 IN THE ABSENCE OF COMPLIANCE FROM ASSESSEE. CONSEQUENT TO THE ASSESSMENT PROCEEDINGS U/S. 144, ASSESSEE FIL ED AN APPEAL BEFORE THE CIT(A), WHO VIDE HIS ORDER DT. 27-02-2009 HAS DIRECTED TO EXAMINE THE CONTENTION OF ASSESSEE REGARDING THE DEP OSITS MADE IN THE BANK ACCOUNT. ON VERIFICATION OF DETAILS, IT WA S NOTICED THAT ASSESSEE HAS DEPOSITED CASH OF RS. 14,17,365/- AND FAILED TO EXPLAIN THE SOURCES FOR CASH DEPOSIT. CONSEQUENTLY, A NOTICE U/S. 148 WAS ISSUED ON 28-03-2012, AS INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AS PER AO. IN THE RE-ASSESSMENT P ROCEEDINGS, AO EXAMINED CASH RESOURCES OF ASSESSEE AND NOTICED THAT HE HAS NO EXPLANATION FOR OPENING CASH BALANCE OF RS. 23,7 22/- CLAIMED (IN ANOTHER STATEMENT, THE SAME WAS SHOWN AT RS. 4,25,00 0/-) AND FURTHER, HE LISTED OUT THE FOLLOWING DEPOSITS WHICH HA S STATED TO HAVE BEEN RECEIVED FROM OTHERS BUT NOT EXPLAINED PROPE RLY: S. NO NAME OF THE ASSESSEE SOURCE DATE AMOUNT RS. 1 TIRUMALA SHETTY VENKAMMA AGRICULTURE 16 - 02 - 2005 2,00,000 2 L. RAMU AGRICULTURE 18 - 02 - 2005 2,00,000 3 L. SUKANYA SALARY 02 - 03 - 2005 4,88,000 TOTAL: 10,88,000 2.1. AO MADE THE ADDITION OF RS. 10,88,000/-. FURTHER , ASSESSEE ALSO HAD CASH DEPOSIT OF RS. 4,000/- IN THE BANK ACCO UNT ON 19- 01-2005 WHICH WAS NOT EXPLAINED PROPERLY. THEREFORE , WITH THE INTEREST RECEIVED ON THAT, AN AMOUNT OF RS. 4,585/- WAS BROUGHT TO TAX BY THE AO. I.T.A. NO. 235/HYD/2016 MR. LAKKAKULA KOTESWARA RAO :- 3 - : 3. BEFORE THE LD. CIT(A), ASSESSEE QUESTIONED THE ADDI TION SO MADE BY REJECTING THE DOCUMENTS AND EXPLANATIONS FOR TH E SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNT. LD. CIT(A) AFTE R CONSIDERING THE EXPLANATION OF THE COUNSEL APPEARED BEFORE HER, HO WEVER, CONFIRMED THE ORDER OF AO TO AN EXTENT OF UNEXPLAINED I NVESTMENT OF RS. 10,88,000/- AND DISMISSED THE APPEAL. 4. AFTER CONSIDERING THE CONTENTIONS OF LD.DR, I AM OF THE OPINION THAT THE ASSESSMENT PROCEDURE FOLLOWED BY THE A O SEEMS TO BE NOT PROPER. FIRST OF ALL, IT IS NOT EXPLAINED WHY PROCEEDINGS U/S. 147 WERE INITIATED WHEN THE EARLIER ASSESSMENT WA S PENDING, AS THE CIT(A) HAS RESTORED THE ISSUE TO THE FILE OF AO F OR EXAMINATION. WHAT HAPPENED IN THE CONSEQUENTIAL PROCE EDINGS UNDER THE SECTION 144 COMPLETED EARLIER IS NOT FORTHCO MING FROM THE RECORD. ONCE PROCEEDINGS ARE PENDING FOR ASSESS MENT, INITIATION OF RE-ASSESSMENT PROCEEDINGS IS NOT PROPER. HOWEVER, THERE IS NO CLARITY ON THIS ISSUE. FURTHER, AO IN PA GE NO.1 MENTIONS THAT ASSESSEE IN RECEIPTS AND PAYMENTS STATEMENT, CLAIMED AN AMOUNT OF RS. 4,25,000/- AS OPENING CASH. HOWEVER, WHILE DETERMINING THE ADDITION, AO GOES TO RECONSTRUCT A CASH ACCOUNT AND BRINGS TO TAX AN AMOUNT OF RS. 23,722/-. W HY THERE IS VARIATION IS NOT EXPLAINED IN THE ORDER. FURTHER, AS C AN BE SEEN FROM THE TABLE EXTRACTED ABOVE, ASSESSEE WAS ASKED TO EX PLAIN ABOUT AMOUNTS RECEIVED TO AN EXTENT OF RS. 8,88,000/- (I .E., RS. 2 LAKHS + 2 LAKHS + 4,88,000) IN THREE NAMES, WHEREAS THE ADDITION MADE WAS RS. 10,88,000/-, THEREBY CONSIDERATION OF AN OTHER RS. 2 LAKHS WAS MISSING IN THE SAID ORDER. LD. CIT(A) AL SO WHILE NOT ACCEPTING THE CREDITS OF ABOVE THREE PERSONS, TOTALLING RS. 8,88,000/- CONFIRMED THE ADDITION OF RS. 10,88,000/-. THE CIT(A) I.T.A. NO. 235/HYD/2016 MR. LAKKAKULA KOTESWARA RAO :- 4 - : ALSO HAS NOT NOTICED THE MISSING RS. 2 LAKHS IN THE P ROCESS. FURTHER, ASSESSEE HAS QUESTIONED THE ENTIRE ADDITION OF RS. 11,16,307/-, WHEREAS LD. CIT(A) DISMISSED THE APPEAL , CONFIRMING THE AMOUNT OF RS. 10,88,000/-. THUS, THERE SEEMS TO BE MISMATCH OF AMOUNTS. AS ASSESSEE HAS NOT APPEARED BEFORE ME TO EXPLAIN THESE ASPECTS AND AS THE EARLIER PROCEEDINGS INITIATED BY ISSUE OF NOTICE U/S. 142(1) WERE NOT PLACED BEFORE THIS FORUM, I AM OF THE OPINION THAT THE ORDERS PER SE CANNOT BE APPROVED AND THE ENTIRE MATTER IS TO BE RE-EXAMINED BY THE AO AFRESH. HE IS A LSO DIRECTED TO CONSIDER WHETHER THE EARLIER PROCEEDINGS HAVE BEEN CONCLUDED OR NOT AND IF NOT COMPLETED, WHETHER REOPENING CAN BE UND ERTAKEN U/S.147 AFRESH? THESE ASPECTS ALSO REQUIRE EXAMINATI ON OF FACTS. IN VIEW OF THAT, THE ORDERS PASSED BY THE AO AND CIT(A) ARE SET ASIDE AND THE ENTIRE ASSESSMENT PROCEEDINGS ARE RESTORE D TO THE FILE OF AO. ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY AN D IN CASE ASSESSEE DOES NOT APPEAR OR DOES NOT EXPLAIN PROPERL Y, AO IS FREE TO COMPLETE THE ASSESSMENT BASED ON FACTS AND LAW ON THE I SSUE. WITH THESE OBSERVATIONS, THE IMPUGNED ORDERS ARE SET ASIDE A ND THE ASSESSMENT PROCEEDINGS ARE RESTORED TO THE FILE OF AO. GROUNDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 31 ST JANUARY, 2017 TNMM I.T.A. NO. 235/HYD/2016 MR. LAKKAKULA KOTESWARA RAO :- 5 - : COPY TO : 1. SHRI L. KOTESWARA RAO, 8-2-293/82/A/1201, P.NO. 1201, ROAD NO. 59, JUBILEE HILLS, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-6(3), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-9, HYDERABAD . 4. THE PR. COMMISSIONER OF INCOME TAX-6, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.