Anitha Fernandes , Tumkur V. The Income Tax Officer, Ward-1 & TPS, Tumkur

ITA 252/BANG/2023

AI Insights

The case involves Anitha Fernandes, who appealed against the order of the National Faceless Appeal Centre (NFAC) concerning an ex-parte order under section 69A of the Income Tax Act, which assessed her unexplained investment of Rs. 10,40,000 during the demonetization period. The assessee did not file her income tax return within the due date, and subsequent notices under sections 142(1) and 139(4) were issued but remained unresponded adequately. The AO, after not receiving satisfactory explanations or documents to substantiate the source of the cash deposit, completed the assessment under section 144, treating the amount as unexplained investment. The CIT(A) upheld this decision after the assessee failed to respond to multiple notices. The ITAT, considering the assessee's lack of understanding of the proceedings and her inability to produce documents, remanded the case back to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124210 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: A
• Next Hearing Date: 26-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 28-03-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANDEEP CHALAPATHY
• Keywords: Unexplained investment; Gift; Earning of tax free income
• Section: 144; 139; 142(1); 133(6); 69A; 139(1); 139(4)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC “A” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.252/Bang/2023 Assessment Year : 2017-18 Anitha Fernandes, 6 th Main, 3 rd Cross, Sadashivanagar, Tumkur-572 102. PAN : AAIPF 9496 K Vs. The Income-tax Officer, Ward-1 & TPS, Tumkur. APPELLANT RESPONDENT Assessee by : Shri Sandeep Chalapathy, C.A Revenue by : Shri Ganesh R Ghale, Standing Counsel Date of hearing : 27.04.2023 Date of Pronouncement : 01.05.2023 O R D E R Per: L. P Sahu A.M. This is an appeal filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC) vide order dated 30/01/2023 DIN & Order No. ITBA/NFAC/S/250/2022- 23/1049257573(1). The sole & substantive issue involve in this appeal is ex-parte order passed by the Assessing Officer & confirmed by the CIT (A) u/s 69A of Rs. 10,40,000/- during the demonization period. ITA No.252/Bang/2023 Page 2 of 6 2. The brief facts of the case are that the assessee is an individual and for the impugned assessment year, the assessee did not file return of income within the due date as per sec. 139(1) of the Act. Accordingly notice u/s 142(1) of the Act was issued on 04/01/2018, which was served on the assessee on 06/01/2018, but the assessee failed to file return of income and even the assessee did not file return of income u/s 139(4) of the Act. Another notice was issued to the assessee on 18/3/2019 calling for the details. In response, the assessee uploaded her return of income on 27/3/2019 showing income of Rs.55,420/- but it was pending for e-verification. Hence, the return was treated as invalid return and the assessment was processed to completed u/s 144 of the Act. Another notice was also issued u/s 142(1) of the Act but the assessee did not file any response against the notice. The AO gave one more opportunity calling for the details, in this regard the assessee’s representatives filed letter on 07/08/2019 and submitted that the assessee does not have any business income, hence she is not subjected to audit. The AO exercised the power u/s 133(6) of the Act and called the details from the banks for the period from 1/4/2016 to 31/3/2017 from the Canara Bank, where the assessee had maintained a saving account No.2603101000581 and in which, it has been observed that there is cash deposit of Rs.10,40,000/-. Subsequently, the assessee’s representative filed information/profit and loss account in which, the assessee has shown agricultural income of Rs.6,75,000/- and exempt income of Rs.12,94,568/-, gift from brother for ITA No.252/Bang/2023 Page 3 of 6 Rs.5,42,000/- and LIC maturity for Rs.6,19,568/- but the assessee could not substantiate with the documentary evidence in support of her claim. On 06/08/2019 another notice was issued to the assessee. in support of her claim. The case was completed u/s 144 of the Act and determined the income at Rs.10,40,000/-, which was treated as unexplained investment u/s 69A of the Act. 3. Aggrieved from the above order, the assessee filed appeal before the CIT(A). During the course of appellate proceedings, the CIT(A) issued several notices but the assessee did not respond to the same and final opportunity was also given to the assessee but again, the assessee failed to submit any documents/reply. Therefore, the CIT(A) also decided the issue on the documents available before him and dismissed the appeal of the assessee. 4. Aggrieved from the above order, the assessee filed appeal before the ITAT. 5. The ld.AR submitted that the assessee is an illiterate and she could not understand the Income-tax proceedings properly and the documents were also available with her and she is humbly praying that if chance is given to represent the case before the revenue authorities once again, the assessee would be able to produce the documents in support of the cash deposited into the bank account. Therefore, he requested that the matter may be sent back to the AO. ITA No.252/Bang/2023 Page 4 of 6 6. On the other hand, the ld.DR supported the order of the lower authorities and submitted that ample opportunities were given to the assessee at the stage of assessment proceedings as well as appellate proceedings itself but she did not utilize the opportunity provided by the revenue authorities. He strongly objected the request made by the assessee for sending back the matter to the lower authorities and he also submitted that the assessee file return of income is invalid return . 7. After hearing both sides and pursuing the entire material available on record, that the assessee did not file her return of income as per sec. 139 of the Act. On perusal of the assessment order, I observe that the AO has computed the income u/s 69A of the Act only on the cash deposited into the saving Bank account maintained with Canara Bank. During the course of hearing before the AO, the representative of the assessee filed financial statements for substantiating the cash deposited into the bank account but she could not file any supporting documents and before the CIT(A) also she could not submit any corroborative materials in support of her claim. During the course of hearing, the ld.AR of the assessee undertook that the assessee would be able to file supporting documents in support of her income declared before the AO. In view of this and considering the prayer of the ld.AR of the assessee the matter is sent back to the file of AO for denovo assessment and the assessee is given liberty to produce necessary documents for ITA No.252/Bang/2023 Page 5 of 6 substantiating the cash deposited into the bank account. The AO shall grant three effective opportunities to the assessee. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in court on day of 1 st May, 2023 Sd/- (Laxmi Prasad Sahu) Accountant Member Bangalore, Dated : 1 st May, 2023 Vms Copyto: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore. ITA No.252/Bang/2023 Page 6 of 6 1. Date of Dictation .......................................... 2. Date on which the typed draft is placed before the dictating Member ......................... 3. Date on which the approved draft comes to Sr.P.S ................................... 4. Date on which the fair order is placed before the dictating Member .................... 5. Date on which the fair order comes back to the Sr. P.S. ....................... 6. Date of uploading the order on website................................... 7. If not uploaded, furnish the reason for doing so ................................ 8. Date on which the file goes to the Bench Clerk ........................ 9. Date on which order goes for Xerox & endorsement.......................................... 10. Date on which the file goes to the Head Clerk ......................... 11. The date on which the file goes to the Assistant Registrar for signature on the order ..................................... 12. The date on which the file goes to dispatch section for dispatch of the Tribunal Order ............................... 13. Date of Despatch of Order. .....................................................