Shri. K.Surya Narayana Raju, Bengaluru V. Assistant Commissioner of Income Tax, Circle-6(3)(1), Bengaluru

ITA 323/BANG/2023

AI Insights

The case involves Shri K Surya Narayana Raju, the appellant, who contested an order passed under section 250 of the Income-tax Act, 1961, by the NAFC Delhi for the assessment year 2015-16. The primary contention was regarding the addition of unexplained cash deposits amounting to Rs.2,10,37,600/- into his income, which he argued were part of his business turnover. The appellant faced procedural lapses from his previous representatives, leading to non-compliance with notices during both the assessment and appellate stages. The ITAT, considering the circumstances and the substantial turnover of the appellant's liquor business, decided to remand the case back to the AO for a fresh assessment, allowing the appellant another opportunity to present his case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124539 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 19-04-2023
• Other Referred Cases: Collector, Land Acquisition Vs. MST. Katiji and Others (198) 167 ITR 471
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VEERA RAGHAVAN
• Keywords: Unexplained cash credit
• Section: 68; 142(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA No.323/Bang/2023 Assessment Year: 2015-16 Shri K Surya Narayana Raju, No.17, Krishnappa Block, 5 th Main, 8 th Cross, Ganganagar, Bengaluru-560 032. PAN No. – ADAPR 8624 G Vs. The Asst. Commissioner of Income Tax, Circle-6(3)(1), Bengaluru. APPELLANT RESPONDENT Appellant by : Shri T Srinivasa, C.A Respondent by : Shri Veera Raghavan, JCIT (DR) Date of Hearing : 02.08.2023 Date of Pronouncement : 04.08.2023 O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order dated 11.01.2023, DIN & Order No.ITBA/NFAC/S/250//2022- 23/1048627792(1) passed u/s 250 of the Income-tax Act, 1961 by the NAFC Delhi for the assessment year 2015-16. 2. The assessee has filed an affidavit dated 18.04 .2023 for condonation of 36 days delay stating the reason as under:- “4. That the Learned Assessing Officer had concluded the assessment proceedings u / s 144 of the income tax act on account of the delay and 2 of page 5 ITA No.323/Bang/2023 default on the part of the authorized representative who had not only not informed me about the said proceedings but had also neglected to submit the details / clarifications sought for by the learned assessing officer within the time stipulated by him leading to the framing of the assessment order dated 12.12.2017 under section 144 of the income tax act. 5. That being aggrieved of the said order, I had filed an appeal before the -learned CIT (A) Bangalore - 06 on 12th Jan 2018 which was subsequently migrated to the NFAC. However, here again, due to my bad luck the appeal went unrepresented before Learned CIT (A) resulting in the learned CIT(A) dismissing the said appeal vide order dated 11 th Jan 2023, impugned the subject appeal. 6. That I came to know about the order of learned CIT(A) dated 11th Jan 2023 on 12th Jan 2023 through mail and I was totally surprised and shocked to know the developments. 7. That, as stated above, due to the lapse/ negligence on the part of two professionals I have suffered injustices both at the assessment as well as the appellate stage. 8. That being disappointed with the professional lapse/ negligence shown by both authorized representatives, I approached the present authorized representative through a common friend of mine during the 3" week of March 2023. However, at that point in time the present AR was busy with his other prior professional commitments and accordingly I was advised to contact them after 1st April 2023. Subsequently, after my providing the required/ documents the subject appeal has been filed on 19.04.2023.” 3. We have heard the rival submission of both the parties and after pursing of the materials placed before us and we are satisfied that the delay in filing the appeal was due to reasonable and sufficient cause and the delay in filing the appeal deserves to be condoned. We accordingly condone the delay in filing the appeal after relying on the judgment of Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (198) 167 ITR 471. 4. The brief facts of the case are that the assessee filed return of income on 29.09.2015 declaring income of Rs.21,65,220/-. The case was selected for scrutiny under CASS and statutory notices were issued to the assessee. In response to the notice u/s 142(1) of the Act, 3 of page 5 ITA No.323/Bang/2023 the AR of the assessee furnished reply. Later on, subsequent notices issued by the AO was not complied by the assessee. The final opportunity was also given to the assessee before passing order u/s 144 of the Act. From the perusal of the individual bank transaction statements, it was observed that the assessee has deposited cash in his bank account of Rs.2,10,37,600/- which was not explained, therefore, entire cash deposits were added into the total income of the assessee and assessed income of Rs.2,32,02,820/- and passed order u/s 144 of the Act. 5. Aggrieved from the above order, the assessee filed appeal before the CIT(A). The CIT(A) also issued notice on various dates but the assessee did not comply any of the notices. Therefore, on the basis of material available before the CIT(A), he confirmed the order of the AO. 6. Aggrieved from the above order, the assessee filed appeal before the ITAT. 7. The ld.AR of the assessee submitted that the assessee could not appear during the process of assessment as well as in the first appellate proceedings. The assessee is in the business of liquor and the total turnover of the assessee is Rs.6,92,71,896/- out of which, the cash sales were of Rs.2,10,37,600/- and it was deposited into bank account of the assessee and the credit card sales of Rs.4,82,34,296/- has been accepted by the AO as turnover. However, the AO added the entire cash deposits as unexplained cash credit u/s 68 of the Act, which is not correct. The entire cash deposits are part of the turnover of the 4 of page 5 ITA No.323/Bang/2023 assessee on which, the assessee has declared income and filed return of income. He submitted that the assessee could be given a chance to prove that the cash deposits in his bank account are part of the turnover and he undertook that the necessary documents shall be submitted before the AO, therefore, he requested that the matter may be sent back to the file of the AO for afresh consideration. 8. The ld.DR relied on the order of the lower authorities and submitted that ample opportunities were granted by both the authorities but the assessee did not respond any of the notices. 9. Considering the rival submissions, we noted that the assessee is in the business of liquors. We observe from the statement of facts that the turnover of the assessee is Rs.6,92,71,996/- and credit card sales is Rs.4,82,34,296/- and the cash sales is of Rs.2,10,37,600/-. The addition made by the AO u/s 68 of the Act is for cash deposits in his bank account and the submission of the assessee is that the entire cash sales deposited into the bank account have been added by the AO u/s 68 of the Act. We further note that the assessment has been completed u/s 144 of the Act and the assessee did not appear before the CIT(A). Therefore, in the interest of justice, we deem it fit to send the matter back to the file of the AO for de novo consideration and decide the issue as per law. Needless to say that reasonable opportunity of being heard to be given to the assessee and the assessee is directed to file necessary documents for substantiating his case and not to seek unnecessary adjournment for early disposal of the case. 5 of page 5 ITA No.323/Bang/2023 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 4 th August, 2023. Sd/- (George George K) Vice President Sd/- (Laxmi Prasad Sahu) Accountant Member Bangalore, Dated 4 th August, 2023 Vms Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. By order Asst. Registrar/ITAT, Bangalore