Syed Faiyaz Mohammed , Hyderabad V. Deputy Commissioner of Income Tax,Central Circle -3(3), Hyderabad

ITA 334/Hyd/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8051 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 15-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P. MURALI MOHAN
• Keywords: Unexplained cash credit; Search and seizure; Corroborative evidences; Set aside
• Section: 68; 69; 132; 271(1)(c); 144; 142(1); 153A; 234B; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ‘A’, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA Nos. 333 to 336/H/2021 Assessment Years: 2012-13 to 2016-17 Syed Faiyaz Mohammed, C/o P Murali & Co. Chartered Accountants 6-3-655/2/3, Somajiguda, Hyderabad-500082 v. DCIT, Central Circle-3(3), Hyderabad PAN:AABCG3709Q (Appellant) (Respondent) Assessee by: Sh. P. Murali Mohan, AR Respondent by: Sh. Rajendra Kumar, CIT DR Date of hearing: 11.11.2021 Date of pronouncement: 22.11.2021 O R D E R VIJAY PAL RAO, JUDICIAL MEMBER These four appeals by the assessee are directed against four separate orders of the CIT(A) all dated 17.06.2021 arising from the assessment orders passed under section 144 read with section 153A of the Income Tax Act for the assessment years 2012-13 to 2016-17, respectively. The assessee has raised identical grounds in all these appeals except the quantum of addition. The grounds raised for the assessment year 2012-13 are reproduced as under:- 1. On the facts and in the circumstances of the case the appellate order passed by the CIT(A) is erroneous both on facts and in law to the extent the order in prejudicial to the interest of the appellant. 2. The Ld. CIT(A) having observed that it would not be fair to invoke section 68 of the Act for the impugned unexplained entries/additions and that section 69A of the Act should be invoked, has erred in not issuing enhancement notice before making the additions u/s 69a of the Act. ITA Nos.333 to 336 /H /2021 Assessment Years: 2012-13 to 2016-17 2 3. On the fact and in the circumstances of the case, the Ld. AO has erred in passing the order u/s 153A of the Act without obtaining the prior approval of the competent Authority JCIT/Addl. CIT u/s 153D of the Act. 4. The Ld. CIT(A) ought to have appreciated that while completing the assessment u/s 154A that no addition can be made in the absence of any incriminating material. 5. The Ld. CIT(A) ought to have appreciated the fact that the Ld. AO erred in making addition u/s 68 of Rs. 1,10,66,670/- without there being incriminating material found at the time of search u/s 132, but merely basing on bank entries which is not permissible u/s 153A of the Act. 6. The Ld. CIT(A) ought to have appreciated the fact that the Ld. AO erred in completing the assessment u/s 144 of the Act even though the assessee has responded to the notices issued by the AO and furnished the information called for. 7. The Ld. CIT(A) ought to have appreciated that no addition under the provisions of Section 68 can be made applicable, when the appellant has not maintained books of account. 8. The Ld. CIT(A) erred in upholding the addition of Rs. 1,10,66.670/- towards the enclosed income of the appellant without appreciating facts of the case. 9. The Ld. CIT(A) ought to have appreciated that when the appellant has not maintained books of account, the question of applicability of provision u/s 68 is not in existence. 10. The Ld. CIT(A) ought to have appreciated that part of the amount deposited in bank account represents business advances received which do not come under the purview of income of the assessee for assessment year under consideration and thus cannot be added either u/s 68 or u/s 69 A of the Act. 11. The Ld. CIT(A) ought to have appreciated that as per the provisions of the I.T. Act, mere receipts of any amount cannot be considered as income in the hands of the assessee unless it is chargeable to tax as per the charging sections of the Act under any five heads of income. 12. Without prejudice to the other grounds, the Ld. CIT(A) ought to have appreciated that the cash deposits to the extent of Rs. 4,70,573/- represent the turnover of the appellant for the assessment year under consideration. 13. Without prejudice to other grounds, the Ld. CIT(A) ought to have appreciated that the addition of. 1,10,66,670/- represent the turnover of the appellant for the assessment year under considerations. 14. Without prejudice to other grounds, the Ld. CIT(A) erred in not giving telescoping effect towards the unexplained investments/expenditure against the unexplained credits of the earlier years or current year. 15. The Ld. CIT(A) ought to have appreciated the fact that the Ld. AO has erred in charging interest u/s 234A and 234B of the Act, wrongly based on the determined income and not on admitted income. 16. Without prejudice to above, the Ld. CIT(A) ought to have appreciated the fact that the Ld. A.O. erred in initiating the penalty proceedings u/s 271(1)(C) of the Act since the appellant has not restored to nay wilful attempt to conceal income or evade tax. 17. The appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the ground of appeal at any time before or at the time of hearing of the appeal. ITA Nos.333 to 336 /H /2021 Assessment Years: 2012-13 to 2016-17 3 2. The assessee is an individual and partner in firm M/s Sarkar Properties doing business of builder and property dealer. There was a search and seizure operation under section 132 of the Act conducted in G.R.R. Group on 20 th September, 2017 under which the assessee was also covered. Subsequently, the Assessing Officer issued notice under section 153A on 26.09.2018 for all these assessment years. After the notice under section 142(1) issued by the Assessing Officer, the assessee filed return of income in response to the notice under section 153A. The Assessing Officer completed the assessment under section 144 read with section 153A due to non-compliance on the part of the assessee to the notices issued by the Assessing Officer. Assessments for all these four assessment years were completed under section 144 read with section 153A of the Act whereby the Assessing Officer has made the additions under section 68 of the Income Tax Act as unexplained cash credits being deposits made in the bank account of the assessee. The assessee challenged the action of the Assessing Officer before the CIT(A) and raised various grounds including the validity of additions made by the Assessing Officer for want of any incriminating material found during the course of search and seizure action so far as the assessments which were not pending at the time of search. Since the assessee did not appear before the CIT(A) despite various notices therefore, the appeals of the assessee were dismissed by the CIT(A) for want of any supporting evidence and explanation on the part of the assessee and consequentially the additions made by the Assessing Officer were confirmed. 3. Before the Tribunal, at the outset, the learned AR of the assessee has submitted that the assessments were framed ex parte and therefore, the assessee could not explain the source of deposits made in the bank accounts for which the Assessing Officer has made the additions. He has further contended that the CIT(A) has also dismissed the appeal of the assessee by passing ex parte impugned orders and confirmed the additions made by the Assessing Officer for want of details, explanation and supporting evidence. He has pleaded that since the assessment ITA Nos.333 to 336 /H /2021 Assessment Years: 2012-13 to 2016-17 4 order as well as this order passed by the CIT(A) were passed during the crises of COVID-19 pandemic therefore, the assessee could not present his case before the authorities below. 4. He has further contended that even the credit for the withdrawal from the bank was not given by the Assessing Officer as well as by the CIT(A) and therefore, the additions, if any, could be made on account of deposits should be based on peak credits. Despite the various legal grounds raised by the assessee before the CIT(A), the same were dismissed ignoring the binding legal precedents on the point. Thus, the learned AR has prayed that the assessee may be given one more opportunity to present his case and furnish the supporting evidence to explain the source of deposits in the bank account and the matter may be set aside to the record of the Assessing Officer to verify the details and evidence to be furnished by the assessee and then decide the case afresh. 5. On the other hand, learned CIT-DR has vehemently objected to the prayer of the assesse for granting one more opportunity and setting aside the matter to the record of the Assessing Officer. He has contended that the Assessing Officer as well as CIT(A) granted more than sufficient opportunities to the assessee but the assessee has adopted a dilatory tactics for not appearing before the Assessing Officer as well as CIT(A). He has referred to the dates of hearing as recorded by the CIT(A) in the impugned orders and submitted that more than ten opportunities were granted by the CIT(A) but the assessee chose to not appear even on a single date except filing written submissions in the beginning. Thus, the learned CIT DR has submitted that the CIT(A) has decided the matter on merits after considering the written submissions of the assessee and therefore, the assessee does not deserve any further opportunities. ITA Nos.333 to 336 /H /2021 Assessment Years: 2012-13 to 2016-17 5 6. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has made the additions under section 68 for all these four years on account of deposits made in the bank account of the assessee and for want of any explanation and supporting evidence to show the source of the said deposits. The Assessing Officer has passed the assessment orders ex parte as the assessee has not complied with the notices issued by the Assessing Officer asking the assessee to furnish the relevant details and evidence. Similarly, after filing the appeal, the assessee did not appear before the CIT(A) and consequentially the CIT(A) confirmed the additions made by the Assessing Officer while passing the impugned orders. 7. Without going into the merits of the issue at the threshold, we note that the assessment proceedings as well as the proceedings before the CIT(A) were completed during the COVID-19 pandemic period and during these two years there were times when there was a complete lockdown as well as peak of the COVID-19 pandemic. Therefore, having regard to the facts and circumstances and in the interest of justice, we set aside the orders of the authorities below to grant one more opportunity of hearing to the assessee to present his case. Hence, the matters are remanded to the record of the Assessing Officer to decide the same afresh, after granting one more opportunity to the assessee to present his case and furnish the relevant evidence in support of source of deposits made in the bank account as well as cash credits. 8. In the result, all the appeals are allowed for statistical purposes. Order pronounced in the open Court on 22.11.2021. Sd/- Sd/- [A. MOHAN ALANKAMONY] [VIJAY PAL RAO] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22/11/2021 Sh ITA Nos.333 to 336 /H /2021 Assessment Years: 2012-13 to 2016-17 6 Copy to: S.No Addresses 1 Syed Faiyaz Mohammed, C/o P Murali & Co. Chartered Accountants, 6-3-655/2/3, Somajiguda, Hyderabad-500082 2 DCIT, Central Circle-3(3), Hyderabad 3 CIT (A) – 11, Hyderabad. 4 Pr. CIT (Central), Hyderabad. 5 DR, ITAT Hyderabad Benches 6 Guard File By Order