Bollina Sivarama Krishna, Rajahmundry V. Income Tax Officer, Ward-2(1), Rajahmundry

ITA 28/VIZ/2022

AI Insights

The case involves Bollina Sivarama Krishna, who appealed against the orders of the Commissioner of Income Tax (Appeals), Rajamahendravaram, concerning the assessment year 2014-15. The appeals were initially delayed due to the assessee's medical condition and subsequent COVID-19 restrictions. The Income Tax Officer had added a peak credit balance of Rs.36,56,400 to the assessee's income as unexplained credits, which was upheld by the CIT(A). The Tribunal found merit in the assessee's reasons for the delay and remitted the case back to the CIT(A) for a decision on the substantive issues.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 135947 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 08-11-2022
• Assessment Year: misc
• Appeal Filed On: 13-09-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Peak credit; Condonation of delay
• Section: 271(1)(c); 2

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM ‘SMC’ BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./I.T.A.No.28/Viz/2022 & 30/Viz/2022 (ननधधारण वर्ा / Assessment Year : 2014-15) Bollina Sivarama Krishna D.No.78-15-5 G-1, RK Towers Sastry Hospital Road Rajahmundry [PAN : AIUPB4182C] Vs. Income Tax Officer Ward-2(1) Rajahmundry (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri ON Hari Prasad Rao, DR सुनवधई की तधरीख / Date of Hearing : 09.11.2022 घोर्णध की तधरीख/Date of Pronouncement : 16.12.2022 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : Condonation of Delay : These appeals are filed by the assessee against the orders of Commissioner of Income Tax (Appeals) [CIT(A)], Rajamahendravaram in ITA No.10005/2018-19/CIT(A)/RJY and 10151/2017-18/CIT(A)/RJY dated 12.12.2019 for the Assessment Year (A.Y.) 2014-15 with the delay of 735 days. The order of the Ld.CIT(A) was passed on 12.12.2019, as 2 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry such the appeal against the said order ought to have been filed on or before 10.02.2020. The assessee filed appeal on 14.02.2022, resulting in a delay of 735 days. The assessee filed petition for condonation of delay and submitted that the assessee could not file the appeal in time, as he underwent surgery for the wound in the lower back area on 01.02.2020 and he was bed ridden till 15.03.2020. The assessee submitted that even thereafter the assessee could not file the appeal immediately in view of the restrictions imposed on account of Covid. The assessee prayed that the delay in filing the appeal was due to the reasons beyond the control of the assessee and it was neither intentional nor deliberate, therefore prayed to condone the delay of 735 days and admit the appeal for hearing. I have gone through the condonation petition and relevant documents filed and find reasonable cause for filing the appeals belatedly, hence, the delay is condoned and the appeals are admitted for adjudication. 2. Brief facts of the case are that the assessee is an individual, filed his return of income for the A.Y.2014-15 on 19.11.2015, admitting total income of Rs.2,17,650/-. The case was selected for scrutiny under CASS to examine huge cash deposits more than the turnover. During the course 3 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry of scrutiny, it was found that the assessee has three bank accounts in various banks and the assessee was asked to explain the sources for the cash deposits made into such bank accounts. In response, the assessee explained that some of the deposits were receipt of sale advances for sale of building at D.No.27-1-2012, RJY, which could not take place and the advance monies were returned and subsequently, the building was sold to Sri T.Venkatramiah and advances were received and deposited in the bank account. The assessee also stated that the balance cash deposits relate to his real estate commission business, but has not filed any evidence to support his claim. As the assessee claimed re-depositing of cash withdrawn, the Assessing Officer (AO) worked out the peak of cash credits in all the three bank accounts which worked out to Rs.50,57,600/- and the assessee was asked to show cause as to why such peak balance should not be added to the income returned in the absence of substantiation of various claims made. In response, the assessee furnished copy of registered document for sale of the above building and received Rs.15,00,000/- on various dates. The assessee has also furnished a copy of the unregistered agreement dated 09.12.2013 stating that he has received Rs.40,00,000/- in cash from B.Somaraju as sale advance, which was deposited in Bank. B.Somaraju confirmed that he has 4 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry advanced the money which was taken back after cancellation of the proposal. However, no information or evidences with regard to real estate commission was submitted to substantiate the balance deposits. After considering the above two transactions and the amounts involved, the AO re-worked out the peak credit balance at Rs.36,56,400/- and the same was furnished to the assessee to show cause as to why the peak credit balance of Rs.36,56,400/- should not be added to the total income in the absence of any substantiating evidences to establish the sources for cash deposits made in the bank accounts and also in view of the huge cash balances available at the end of the year in such accounts. However, the assessee neither responded nor furnished any evidence to support the cash deposits made in the bank accounts. The AO, therefore finalized the assessment by adding the peak credit balance of Rs.36,56,400/- to the total income towards unexplained credits and initiated proceedings u/s 271(1)(c) of the Act as the assessee could not substantiate the cash deposits made in the bank accounts, furnished inaccurate particulars of income and concealed income attributable to such cash deposits. The assessee was given opportunities to furnish any explanation / information with regard to levy of penalty, but since the assessee failed to furnish any supporting evidence to substantiate the cash deposits made 5 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry in his bank accounts and to prove the genuineness of the cash deposits, the AO held that it is a fit case for levy of penalty u/s 271(1)(c) of the Act and levied the minimum penalty of Rs.10,79,350/- for the A.Y.2014-15. 3. On being aggrieved, the assessee preferred an appeal before the CIT(A) and submitted before the Ld.CIT(A) that the assessee was not given an opportunity of being heard. On perusal of the assessment order and the material available, the Ld.CIT(A) held that the AO has given sufficient opportunities to furnish any explanation / information with regard to levy of penalty. However, none appeared nor any explanation was given objecting to the levy of penalty. The assessee was given number of opportunities during appellate proceedings also, but the assessee failed to file any submissions against his contentions. Therefore, the Ld. CIT(A) dismissed the appeals of the assessee holding that the plea taken by the assessee that the AO has not given opportunity of being heard has no merit. 4. On being aggrieved, the assessee preferred appeals before the Tribunal and raised the following grounds : 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) ought to have condoned the delay in filing the appeal. 6 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry 3. The learned Commissioner of Income Tax (Appeals) ought to have adjudicated the appeal on merits and ought to have deleted the penalty of Rs.10,79,350/- levied by the assessing officer u/s 271(1)(c) of the Act. 4. Any other grounds may be urged at the time of hearing. 5. Ground No.1 and 4 are general in nature, which do not require specific adjudication. 6. Ground No.2 is related to condonation of delay in filing the appeal before the Ld.CIT(A). The assessee filed an appeal before the Ld.CIT(A) with the delay of 276 days, submitting that the assessee has gone through a major surgery and hence, could not file the appeal in time. The Ld.CIT(A) held that as per sub-section 2 of section 249 of the Act, the appeal shall be presented within 30 days from the date of receipt of the order. However, the assessee has not shown any sufficient cause nor filed any proofs in support of his submissions before the CIT(A), therefore, the delay was not condoned by the Ld.CIT(A). The Ld.AR submitted that the Ld.CIT(A) ought to have condoned the delay in filing the appeal since the assessee has submitted relevant medical documents as proof. 7. On the other hand, the Ld.DR objected for condoning the delay and prayed to uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee on this ground. 7 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry 8. I have heard both the parties and perused the material placed on record. It is an admitted fact that the Ld.CIT(A) has given sufficient opportunities to the assessee to establish sufficient cause to condone the delay. But the contention of the assessee is that due to Covid pandemic, he was unable to submit his arguments before the Ld.CIT(A), therefore, pleaded for one more opportunity of being heard before the Ld.CIT(A). Considering the Covid pandemic and medical certificate filed by the assessee and in order to meet the principles of natural justice, I am of the view, that it is a fit case to condone the delay of 276 days. Hence, remit the matter back to the file of the Ld.CIT(A) with a direction to pass the orders on merits after giving an opportunity to the assessee. I also direct the assessee to cooperate with the Ld.CIT(A) and furnish all the details before the Ld.CIT(A). Hence, the appeals filed by the assessee are allowed for statistical purpose. 9. Ground No.3 is related to levy of penalty of Rs.10,79,350/- by the AO which was upheld by the Ld.CIT(A). Since the matter is remitted back to the file of the Ld.CIT(A) to pass orders on merits, Ground No.3 is disposed off accordingly. 10. In the result, the appeals of the assessee are allowed for statistical purpose. 8 I.T.A. No.28/Viz/2022 & 30/Viz/2022, A.Y.2014-15 Bollina Sivarama Krishna, Rajahmundry Order pronounced in the open court on 16 th December, 2022. Sd/- (द ु व्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 16.12.2022 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Bollina Sivarama Krishna, D.No.78-15-5, G-1, RK Towers, Sastry Hospital Road, Rajahmundry 2. रधजस्व/The Revenue – Income Tax Officer, Ward-2(1), Rajahmundry 3. The Principal Commissioner of Income Tax-2, Visakhapatnam 4. आयकर आयुक्त (अपील)/ The Commissioner of Income Tax (Appeals), Rajamahendravaram 5. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 6.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam