S.Seenivasan, CHENNAI V. ITO, CHENNAI

ITA 2925/CHNY/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8864 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 03-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 01-12-2014
• Court: TRIBUNAL
• Department Lawyers: ARUN C BHARATH
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit; Principle of natural justice; Revised return
• Section: 143(3); 147; 69; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NO. 2925/MDS/2014 / ASSESSMENT YEAR : 2010-11 S. SEENIVASAN, NO.17/60, FOURTH STREET, F BLOCK, ANNA NAGAR, CHENNAI 600 040. PAN BLYPS5662L ( /APPELLANT) V. THE INCOME-TAX OFFICER, BUSINESS WARD-XIV(4), CHENNAI. RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI ARUN C. BHARATH, CIT ! / DATE OF HEARING : 03.08.2016 '# ! / DATE OF PRONOUNCEMENT : 03.08.2016 & / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 24 .9.2014. - - ITA 2925/14 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1 . THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) ILL , CHENNAI - 600 034 DATED 24 . 09 . 2014 IN I . T . A . NO . 248/2013-14 FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW , FACTS , AND IN THE CIRCUMSTANCES OF THE CASE. 2 . THE CIT (APPEALS) ERRED IN CONFIRMING THE VALIDITY OF ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT AND CONSEQUENTLY FURTHER ERRED IN UPHOLDING THE RE-ASSE SSMENT UNDER PASSED U/S 143(3) READ WITH 147 OF THE ACT WI THOUT ASSIGNING PROPER REASONS AND JUSTIFICATION . 3 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT HAVING NOT FURNISHED THE SURVEY REPORT , THE ASSUMPTION OF JURISDICTION TO FRAME THE RE-ASSESSMENT WAS ERRONEOUS AND INVALID . 4. THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALL OWANCE OF RS 4 , 81 , 50 , 000/- BEING THE CASH CREDITS QUANTIFIED AS UNEXPLAINED BASED ON THE TABULATION IN PARA 2 . 1 OF THE ASSESSMENT ORDER IN THE COMPUTATION OF TAXABLE TOTA L INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION . 5 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THERE W AS NO CORRECT QUANTIFICATION OF SUCH AMOUNT FOR ASSESSMEN T AND FURTHER OUGHT TO HAVE APPRECIATED THAT THE INITIAL BURDEN OF ESTABLISHING SUCH CREDITS COULD NOT BE FU L LY DISCHARGED CONSEQUENT TO LACK OF OPPORTUNITY , DEFEATING THE PRINCIPLES OF NATURAL JUSTICE AND THE DOCTRINE OF ' FAIR PROCEDURE ' . 6. THE CIT (APPEALS) ERRED IN CONFIRMING THE ADDITI ON OF RS 41 , 30 , 00 , 000/- AS SERVICE CHARGES IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION . 7 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT EXPLANA TION OFFERED IN THIS REGARD WOULD FORTIFY THE PLEA FOR REVENUE - - ITA 2925/14 3 RECOGNITION IF ANY IN SUBSEQUENT ASSESSMENT YEAR(S) IN RELATION THERETO AND OUGHT TO APP R ECIATED THAT THE EVIDENCE GATHERED BY HIM WOULD FORTIFY SUCH PLEA . 8 . THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PRO VISIONS IN SECTION THE ACT HAD NO APPLICATION TO THE FACTS OF THE CASE INASMUCH AS OUGHT TO HAVE APPRECIATED THAT THERE WA S NO SYSTEMATIC ACTIVITY CARRIED ON BY THE APPE L LANT FOR ARRANGING LOANS AS ASSUMED. 9. THE CIT (APPEALS) ERRED IN CONFIRMING THE DISALL OWANCE OF RS . 21 , 34 , 060/- BEING THE AGGREGATE OF CASH DEPOSITS AS TABULATED IN 4.1 AND PARA 4 . 4 OF THE ASSESSMENT ORDER AS UNEXPLAINED ON THE APPLICATION OF SECTION 69 OF THE ACT IN THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNI NG PROPER REASONS AND JUSTIFICATION. 10. THE CIT (APPEALS) ERRED IN SUSTAINING THE ASSES SMENT OF RS 45 , 34 , 65 , 000/- AS UNEXPLAINED CASH CREDITS AS PER THE TABULATION IN 5.1 & 5 . 7 OF THE ASSESSMENT ORDER ON THE APPLICATION OF SECTION 69 OF THE ACT IN THE COMPUT ATION OF TAXABLE TOTAL INCOME WITHOUT ASSIGNING PROPER REASO NS AND JUSTIFICATION. 11. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE REJECTION OF THE EXPLANATION OF THE SOURCE FOR THE SAID CREDI TS WAS ERRONEOUS AND INVALID AND OUGHT TO HAVE APPRECIATED THAT LACK OF OPPORTUNITY WOULD VITIATE HIS ACTION IN THI S REGARD . 12 . THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALLOWA NCE OF RS . 3 , 09 , 83 , 870/- BEING THE AGGREGATE CASH DEPOSITS WITH THE BANK ACCOUNT AS TABULATED IN PARA 6 . 1 OF THE ASSESSMENT ORDER AS UNEXPLAINED ON THE APPLICATION OF SECTION 69 OF THE ACT I N THE COMPUTATION OF TAXABLE INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION . 13 . THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALLOWA NCE OF THE CLAIM OF EXPENSES AGGREGATING TO RS . 1 , 65 , 074/- RELATING TO PURCHASE OF MEDICINES, POWER AND FUEL I N THE COMPUTATION OF TAXABLE TOTAL INCOME WITHOUT ASS IGNING - - ITA 2925/14 4 PROPER REASONS AND JUSTIFICATION . 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL RUNNING A CLINIC IN THE NAME OF BABA CL INIC AND FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ADMITTING A TOTAL INCOME OF 3,0 1,097/- ON 2.8.2010. SUBSEQUENTLY, A SURVEY U/S.133A OF THE ACT WAS COND UCTED ON 18.11.2011 IN THE BUSINESS PREMISES OF THE ASSES SEE AND ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S. 148 OF THE ACT ON 23.12.2011. IN COMPLIANCE TO THE NOT ICE U/S.148 OF THE ACT, A REVISED RETURN WAS FILED ON 5 .11.2012 ADMITTING A TOTAL INCOME OF 16,18,256/-. THE CASE WAS SUBJECTED TO SCRUTINY AND NOTICES U/S.142(1) AND 14 3(2) OF THE ACT WERE ISSUED. THE AO, AFTER EXAMINING THE C ASE, COMPLETED THE ASSESSMENT U/S.143(3) R.W.SEC.147 OF THE ACT ON 28.3.2013 ON THE ASSESSED INCOME OF 94,95,16,260/-. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). 4. BEFORE THE CIT(APPEALS), THE ASSESSEE ARGUED THA T THE AO HAS NOT GRANTED PROPER OPPORTUNITY TO THE AS SESSEE - - ITA 2925/14 5 AND PRAYED THAT PROPER OPPORTUNITY MAY BE GIVEN BEF ORE THE AO. THE CIT(APPEALS) REJECTED ALL THE GROUNDS RAIS ED BY THE ASSESSEE WITHOUT ASSIGNING ANY PROPER REASONS. HE ALSO OBSERVED THAT THOUGH THE CASE WAS POSTED FOR S EVERAL TIMES, THE LD. AR HAS NOT FILED ANY WRITTEN SUBMISS IONS TO SUBSTANTIATE THE GROUNDS RAISED BY THE ASSESSEE. H ENCE, HE DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. AR SUBMITTED BEFORE US THAT AT LEAST ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO PR ESENT HIS CASE BEFORE THE CIT(APPEALS), AS THE ASSESSEE W AS DEPRIVED OF PROPER OPPORTUNITY OF HEARING BEFORE TH E CIT(APPEALS) FOR WHICH, THE LD. DR HAS NOT RAISED A NY SERIOUS OBJECTION. CONSIDERING THE PLEA OF THE ASS ESSEE, IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ENTIRE ISSUE TO THE FILE OF THE CIT(APPEALS), AS THE CIT(APPEALS) HAS P ASSED A CRYPTIC AND NON-SPEAKING ORDER. ACCORDINGLY, WE R EMIT THE ENTIRE ISSUE TO THE FILE OF THE CIT(APPEALS) WITH D IRECTION TO GIVE ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSE E AND IF THE ASSESSEE CONTINUES SAME HABIT AS IN EARLIER OCC ASION, - - ITA 2925/14 6 HE SHALL PASS SPEAKING ORDER AFTER CONSIDERING ALL THE MATERIALS ON RECORD, IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 3 RD OF AUGUST, 2016 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 3 RD AUGUST, 2016. MPO* ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.