Narayan Singh Nayak, Jhabua V. The ITO 2, Ratlam

ITA 42/Ind/2023

AI Insights

The case involves Shri Narayan Singh Nayak, the appellant, who contested the assessment order passed by the ITO-2, Ratlam, under sections 144 and 263 of the Income-tax Act, 1961, for the Assessment Year 2013-14. The original assessment was conducted by ITO, Jhabua, and was later set aside by the PCIT, Ujjain, leading to a new assessment order with additional additions to the assessee's income. The CIT(A) dismissed the assessee's appeal due to non-compliance, prompting the appeal to the ITAT. The ITAT found merit in the assessee's arguments and documents, leading to the decision to remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130915 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 08-02-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PARTH JHAVAR
• Keywords: Revision of order
• Section: 147; 263; 144; 80C; 143(3)

Judgement Text

Page 1 of 7 आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No. 42/Ind/2023 Assessment Year : 2013-14 Shri Narayan Singh Nayak, 1, Ranu Colony, Jhabua बनाम/ Vs. ITO-2, Ratlam (Assessee / Appellant) (Revenue / Respondent) PAN: ABAPN9853D Assessee by Shri Santosh Deshmukh and Shri Parth Jhavar, Ars Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 31.08.2023 Date of Pronouncement 04.09.2023 आदेश / O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by appeal-order dated 09.12.2022 passed by learned Commissioner of Income-Tax (Appeal), NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of assessment-order dated 20.11.2019 passed by learned ITO-2, Ratlam u/s 144 read with section 263 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2013-14, the assessee has filed this appeal on the grounds mentioned in Appeal-Memo. 2. Heard the learned Representatives of both sides at length and case- records perused. Shri Narayan Singh Nayak, Jhabua v.ITO,Ratlam ITA No.42/Ind/2023 Assessment year 2013-14 Page 2 of 7 3. The Registry has informed that there is a small delay of 2 days in filing this appeal. Ld. AR for assessee submitted that the delay has occurred because father of assessee was suffering from bad health and undergoing medical treatment and the assessee has to take care which involves considerable time. Ld. AR submitted that the delay is just 2 days which is quite marginal; therefore, considering the circumstance, it should be condoned and the appeal of the assessee be admitted. Ld. DR for revenue did not show any objection to the prayer of the assessee. In order to impart substantial justice and considering the reason explained by assessee, we are inclined to condone delay and the appeal is proceeded for hearing. 4. Brief facts leading to present appeal are such that the original assessment of assessee was framed u/s 147 read with section 143(3) of the Act vide order dated 19.12.2016 passed by ITO, Jhabua [“Jhabua ITO”] at a total income of Rs. 5,24,890/-. Subsequently, the PCIT, Ujjain passed revision-order u/s 263 dated 12.03.2019 whereby the aforesaid assessment- order was set-aside and the assessing officer was directed to reframe assessment after examining certain issues. In pursuance of such revision- order, a newer assessment-order dated 20.11.2019 was passed u/s 144 read with section 263. This newer order is passed by ITO-2, Ratlam [“Ratlam ITO or AO”] wherein he made certain new additions. Aggrieved by this newer assessment order, the assessee went in first appeal to CIT(A). The Ld. CIT(A) has noted, in Para No. 3 and 3.1 of appeal-order, that the notices of hearing were served upon assessee on the e-mail id mentioned in Form No. 35 filed Shri Narayan Singh Nayak, Jhabua v.ITO,Ratlam ITA No.42/Ind/2023 Assessment year 2013-14 Page 3 of 7 to him but since there were non-compliances by assessee, he dismissed assessee’s appeal. Now, aggrieved by the order of CIT(A), the assessee has come in this appeal before us. 5. The assessee is presently aggrieved by various additions made by the AO in newer assessment-order dated 20.11.2019. Ld. AR for assessee drew our attention to various additions made in assessment-order and the voluminous papers filed in the Paper-Book running over 165 pages filed by him. Ld. AR explained that none of the additions could have been made by the AO had he examined the evidences filed by assessee in original assessment before Jhabua ITO. Ld. AR submitted that it seems that due to change in AO from Jhabua ITO to Ratlam ITO, the evidences which were already available on record could not have travelled to the AO or got missed by AO. This must be the precise reason leading to the additions. 6. Then, the Ld. AR briefly apprised us the documents filed in Paper- Book vis-à-vis the additions made by AO one by one and successfully demonstrated that the documents are quite substantial and when considered, there should not be any scope for additions made by AO. We give below the explanation given by Ld. AR: Addition by AO Brief explanation by Ld. AR (Reference of Page No. of Paper-Book in brackets) 1 Unexplained investment in Bank A/c – Rs. The assessee deposited 13,37,300/- in Narmada Jhabua Gramin Bank and Rs. 7,00,000/- in Bank of Baroda (69). The assessee filed Cash-Flow Statement for the year 2012-13 to prove the Shri Narayan Singh Nayak, Jhabua v.ITO,Ratlam ITA No.42/Ind/2023 Assessment year 2013-14 Page 4 of 7 20,37,300/- source of deposits (46). This was accepted by Jhabua ITO on Page No. 2 of assessment-order, although the figure of Rs. 32,35,000/- has been inadvertently mentioned in place of correct figure of Rs. 20,37,300/- (37). 2 Unexplained investment in Bank A/c – Rs. 50,000/- The AO, vide Para No. 5, made this addition in respect of a credit entry of Rs. 50,000/- in assessee’s bank a/c on 09.10.2012 (87). But Ld. AR confused this transaction with another credit entry of same amount in assessee’s a/c on 23.07.2012 (74). Thereafter, Ld. AR prayed to explain this on next occasion or before AO. 3 Unexplained Investment in purchase of plots – Rs. 7,00,000/- The AO has purchased two plots and made payment of Rs. 3,50,000/- on 17.01.2013, Rs. 2,00,000/- on 19.01.2013 and Rs. 1,51,000/- on 04.10.2012 from his bank accounts (80 & 86). The purchase-deeds of plots are filed. The cheque numbers/amounts mentioned in registered-deeds tally with the cheque numbers/amounts debited in assessee’s bank A/c (103- 125). Moreover, the payments of Rs. 3,50,000/- (+) Rs. 2,00,000/- were made out of loan of Rs. 5,50,000/- taken from father. The AO has made double addition, one on account of loan taken from father and other on account of investment in plots. 4 Unexplained investment in Bank A/c – Rs. 5,50,000/- The assessee took loan from his father, Shri Amar Singh Nayak on 16.01.2013. Bank A/c of father showing transfer to assessee is filed from which it is clear that father had sufficient balance created out of his savings and maturity of FDRs (1). Father is also tax-return filer. His A/c Confirmation is filed (165) and hospitalization-certificate is filed (5); these are additional evidences which could not be filed earlier due to father’s illness. The assessee’s bank a/c is filed (80). 5 Disallowance of deduction under Chapter VI-A – Rs. 1,63,826/- Computation of Total Income is filed (163-164). The deduction of Rs. 1,00,000/- u/s 80C is claimed in respect of GPF, GIS, Tution fee of son and repayment of house-loan for which Form No. 16, Receipt of college, etc. are placed (157-161). The deduction of Rs. 53,826/- is claimed u/s 80E on account of interest on educational loan taken for study of son, evidences are filed (90- 100). Deduction of Rs. 10,000/- u/s 80TTA is a statutory Shri Narayan Singh Nayak, Jhabua v.ITO,Ratlam ITA No.42/Ind/2023 Assessment year 2013-14 Page 5 of 7 deduction for bank interested taxed under Other Sources. 7. Having explained thus, Ld. AR prayed that the additions should be deleted or alternatively the case should be remanded back to the AO with suitable direction for a proper assessment. 8. Ld. DR for revenue, though accepted that the case of assessee is quite meritorious, yet made a strong prayer for remanding this case back to AO so that the AO can verify the correctness of claim/documents. 9. We have considered rival submissions of both the sides and also perused the documents filed in Paper-Book briefly summarised above. We take note of the fact that the original assessment-order was passed by Jhabua ITO but the newer assessment-order, which is precisely the subject matter of litigation before us, was passed by the Ratlam ITO. From the certificate filed by the assessee at the end of Paper-Book, we find that all documents filed therein are certified by assessee to have been filed during original assessment before Jhabua ITO (except the additional evidence mentioned in above table). We also take note that the AO has passed assessment order u/s 144. Therefore, prima facie, it appears that while passing the newer assessment-order, the AO could not have taken into account the evidences of assessee. Faced with this situation and taking into account the consent given by learned Representatives of both sides for remanding this matter back to the AO, we are inclined to remand this case back to AO. The AO shall pass a fresh assessment order un-influenced by Shri Narayan Singh Nayak, Jhabua v.ITO,Ratlam ITA No.42/Ind/2023 Assessment year 2013-14 Page 6 of 7 his previous order. Needless to mention that the AO shall be fair in giving adequate opportunity to assessee and passing a proper order in accordance with law. The assessee is also directed to participate in hearing fixed by AO and do not seek un-necessary adjournments. 10. Resultantly, this appeal of assessee is allowed for statistical purposes. Order pronounced in the open court on 04.09.2023. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated : 04.09.2023 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore Shri Narayan Singh Nayak, Jhabua v.ITO,Ratlam ITA No.42/Ind/2023 Assessment year 2013-14 Page 7 of 7