Chinni Mahesh , Kurnool V. Income Tax Officer, Ward-2, Hyderabad

ITA 416/Hyd/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1635 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 03-06-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: K SAI PRASAD
• Keywords: Peak credit; Reasonable cause; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 4 16 / HYD/201 9 ASSESSMENT YEAR: 20 13 - 14 CHINNI MAHESH, KURNOOL . PAN A NUPM 3376 Q VS. INCOME - TAX OFFICER, WARD 2, KURNO O L A PPELLANT RESPONDENT ASSESSEE BY: S H RI K. SAI PRASAD REVENUE BY: SHRI NILANJAN DEY DATE OF HEARING: 03 / 0 6 / 201 9 DATE OF PRONOUNCEMENT: 12 / 0 6 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A), KURNOOL , DATED, 19 /0 2 /201 9 FOR AY 20 13 - 14 . 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE , RUNNING A KIRANA SHOP AND DOING PETTY MONEY LENDING BUSINESS, FILED HIS RETURN OF INCOME FOR THE AY 20 13 - 14 ON 09 / 1 0 /20 14 DECLARING INCOME OF RS. 2,07,200/ - SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY, NOTICE U/S 143(2) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) WAS ISSUED ON 31/08/2015 AND THE SAME WAS SERVED ON THE ASSESSEE ON 09/09/2015. IN RESPONSE TO THE SAID NOTICE, THE AR OF THE ASSESSEE FILED THE REQUIRED INFORMATION AS CALLED FOR. 2.1 ON VERIFICATION OF BANK STATEMENTS, THE AO NOTICED THAT THERE WERE HUGE CASH DEPOSITS IN THE BANK. WHEN T HE AR OF THE ASSESSEE WAS ASKED TO SUBSTANTIATE THE CASH CREDITS , T HE I.T.A. NO. 4 16 /HYD/1 9 CHINNI MAHESH, KURNOOL. 2 AR OF THE ASSESSEE SUBMITTED THAT, THE CASH CREDITS ARE THE AMOUNTS REALIZED FRO M SUNDRY DEBTORS. FURTHER THE AR OF THE ASSESSEE SUBMITTED THE DETAILS OF THE SOME OF THE DEBTORS ALONG WITH CASH BOOK. HOWEVER, THE AR OF THE ASSESSEE COULD NOT SUBSTANTIATE THAT THE CASH DEPOSIT AMOUNTS REFLECTING IN THE BANK STATEMENT WERE REALIZED FROM DEBTORS ONLY. WHEN ASKED ABOUT THE IDENTITY AND GENUINENESS OF THE TRANSACTIONS, HE EXPRESSED HIS INABILITY TO PRODUCE THE CONFIRMATION LETTERS FROM THE DEBTORS. HE FURTHER SUBMITTED THAT FULL DETAILS OF ALL THE DEBTORS ARE NOT AVAILABLE WITH HIM AS THE A MOUNTS WERE LENT A LONG TIME BACK. THUS, IN ABSENCE OF COMPLETE DOCUMENTARY EVIDENCE, THE ASSERTION OF THE ASSESSEE CANNOT BE ACCEPTED ON FACE VALUE THAT MONEY WAS LENT LONG BACK BUT NOW IT IS NOT POSSIBLE TO GET THOSE DETAILS. FINALLY, THE IDENTITY OF ALL THE SUNDRY DEBTORS AND GENUINENESS OF THE TRANSACTIONS COULD NOT BE ESTABLISHED. IN VIEW OF T HE ABOVE OBSERVATIONS, THE AO PROPOSED TO TAKE THE PEAK CREDIT OF ALL THE BALANCES APPEARING IN SAVINGS BANK ACCOUNT WHICH COME TO RS 12,17,696/ - (RS 14,33,145 - RS 1,55,449 (OPENING BALANCE ) WHEN ASKED ABOUT THE SOURCES OF OP ENING BALANCE, THE AR OF THE ASSESSEE SUBMITTED THAT IT IS THE ACCUMULATED C APITAL A / C B A LANCE OVER THE YEARS AND SUBMITTED THE P&L A/C AND CAPITAL A/C FOR THE LAST TWO AYS WHICH, ACCORDING TO AO APPEARS FAIR AND REASONABLE. THE AO COMPLETED THE ASSESSMENT DETERMINING THE ASSESSED INCOME OF THE ASSESSEE AT RS. 14,84,900/ - BY MAKING THE ADDITION OF RS. 12,77,696/ - . 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO DISMISSED THE APPEAL AS BARRED BY LIMITATION BY OBSERVING THAT THE APPEAL WAS NOT PRESENTED WITHIN THE PRESCRIBED TIME AND THE ASSESSEE HAS NOT FILED ANY VALID PETITION FOR CONDONATION OF DELAY EVEN AFTER SUBSTANTIAL I.T.A. NO. 4 16 /HYD/1 9 CHINNI MAHESH, KURNOOL. 3 PERIOD OF TIME AND NO SUFFI CIENT AND REASONABLE CAUSE FOR NOT PRESENTING THE APPEAL WITHIN TIME HAS COME ON RECORD. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IS NOT JUSTIFIED IN HOLDING THAT THERE WAS NO VALID PETITION FOR CONDONATION OF DELA Y . 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN DISPOSING OF THE APPEAL WITHOUT GIVI NG AN OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE DEFICIENC Y IN THE CONDONATION P ETITION. 3. THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND, DELETE OR SUBSTITUTE ANY GROUND OR GROUNDS DURING THE COURSE F HEARING. 5. CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL ON RECORD. THE CIT(A) DISMISSED THE APPEAL BY NOT ADMITTING THE APPEAL OF THE ASSESSEE AS THE APPEAL WAS FILED BEFORE HIM WITH A DELAY OF 4 MONTHS, FOR WHICH ACCORDING TO THE CIT(A), THERE WAS NO VALID PETITION FILED FOR THE CONDONAT ION OF DELAY WITHIN TIME. WE ALSO NOTICED THAT THE AR OF THE ASSESSEE I.E. E. SATYANARAYANA FILED PETITION FOR CONDONATION OF DELAY BUT HAD NOT FILED ANY POWER OF ATTORNEY AUTHORIZING HIM TO REPRESENT THE CASE, DUE TO WHICH, CIT(A) HAS CONSIDERED THE PETIT ION AS NOT PROPER. THE REASON FOR SUCH DELAY ALSO DUE TO SICKNESS OF THE AR. SINCE THE ASSESSEE HAS NOT FOLLOWED THE PROCEDURE OF APPOINTING PROPER REPRESENTATIVE, MAY BE NOT HAVING PROPER GUIDANCE. SINCE, THE CIT(A) ALSO HAS NOT ADJUDICATED ON MERIT, WE A RE INCLINED TO REMIT THIS ISSUE BACK TO LD. CIT(A) OFFICE AND DIRECT HIM TO RE - ADMIT THE APPEAL AFRESH. AT THE SAME TIME, WE DIRECT THE ASSESSEE TO FILE PROPER POWER OF ATTORNEY ALONG WITH THE CONDONATION PETITION, SO THAT CIT(A) CAN ADJUDICATE ON I.T.A. NO. 4 16 /HYD/1 9 CHINNI MAHESH, KURNOOL. 4 ADMISSI ON OF CONDONATION PETITION AND DECIDE THE APPEAL ON MERIT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH JUNE, 2019. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 12 TH JUNE , 201 9. KV COPY FORWARDED TO: 1. CHINNI MAHESH , C/O CH. PARTHASARATHY & CO., 1 - 1 - 298/2/B/3, 1 ST FLOOR, ASHOK NAGAR, HYDERABAD 500 0 20 . 2 . ITO, WARD 2, KURNOOL 3 . CIT (A) , KURNOOL 4. PR. CIT , KURNOOL 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER