Sri Gubbala Satyanarayana, Hyderabad V. ITO, Sanga Reddy

ITA 573/HYD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4827 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-02-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 20-04-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Additional evidence; Validity of assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.573/HYD/2010 (ASSESSMENT YEAR 2005 - 06) SHRI GUBBALA SATYANARAYANA, HYDERABAD ( PAN AJRPD 1900 E ) V/S INCOME TAX OFFICER, WARD 1, SANGAREDDY. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.V.RAGHURAM RESPONDENT BY : SHRI SOLGY JOSE T.KOTTARAM DR DATE OF HEARING 4.11.2013 DATE OF PRONOUNCEMENT 4.11.2013 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX(APPEALS) II, HYDERABAD DATED 30.11.2009 FOR THE ASSESSMENT YEAR 2005 - 06. 2. AT THE OUTSET, IT MAY BE NOTED THAT THERE IS DELAY OF 60 DAYS IN TH E FILIN G O F THE PRESENT APPEAL. THE ASSESSEE HAS FILED A PETITION SEEKING CONDONATION OF DELAY, WHEREIN IT HAS BEEN SUBMITTED THAT THE DELAY WAS ON ACCOUNT OF CONFUSION WITH REGARD TO JURISDICTION FOR FILIN G THE APPEAL. W E ARE CONVINCED WITH THE REASONABLENESS O F THE CAUSE, WHICH LED TO THE LATE FILLING OF THE APPEAL. WE ACCORDINGLY CONDONE THE DELAY, AND PROCEED TO DISPOSE OF THE APPEAL ON ITS MERITS. 3. THOUGH AS MANY AS FIVE EFFECTIVE GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, CONTESTING NOT ONLY THE LEGALIT Y AND VALIDITY OF THE ASSESSMENT MADE EX - PARTE UNDER S.144 OF THE ACT, WHICH HAS BEEN ITA NO. 573 /HY D/ 10 SHRI GUBBALA SATYANARAYANA, HYDERABAD 2 SUSTAINED BY THE CIT(A), BUT ALSO WITH REGARD TO THE ADDITION OF RS.24,12,148 MADE UNDER S.6 9B OF THE ACT, BY THE ASSESSING OFFICER TREATING CERTAIN BANK DEPOSITS MADE B Y THE ASSESSING OFFICER AS UNEXPLAINED , BUT AT THE TIME OF HEARING BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT HE DOES NOT WANT TO PRESS GROUND NOS.2 AND 3, RELATING TO LEGALITY OF ASSESSMENT MADE. HENCE, GROUND NOS.2 AND 3 ARE REJECT ED, AS NOT PRESSED. . 4. BRIEFLY, A SSESSEE WAS PRINCIPAL OF TAGORE CONVENT HIGH SCHOOL, RAMACHAN D RAPURAM, DI S TRICT M E DAK. O N THE BASIS OF THE IN F O R M A TION AVAILA B LE WITH THE ITO, WAR D - 1, SANGAREDDY FROM THE ANNUAL INFORMATION RETURN(AIR) THAT THE ASSESS EE H A D DEPOSITED CASH AMOUN T IN G TO R S .24,12,148 IN HIS SAVINGS BANK ACCOUNT IN CORPORATION BANK, HYDERABAD, THE ITO, WAR D - 1, SANGAREDDY ISSUED A NOTICE UNDER S .142(1 ) OF THE AC T TO THE ASSESSEE REQUIRING HIM TO FILE THE R E TURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06. THE SAID NOTICE WAS SERVED ON 24.8.2007. IN THE ABSENCE O F ANY REPLY, AFTER ISSUING ANOTHER SHOW CAUSE NOTICE, WHICH WAS R E TURNED UN S ERVED WITH THE ENDORSEMENT REFU S ED , THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER S.144 OF THE ACT, TREATING THE SAID DEPOSIT OF RS.24,12,148 AS THE INCOME OF THE ASSESSEE, AND MAKING THE ADDITION ACCORDINGLY UNDER S.69B OF THE ACT, VIDE ORDER OF ASSESSMENT DATED 31.12.2007 PASSED UNDER S.144 OF THE ACT. 5. ON APPEAL, THE ASSESSEE CHALLENGED NOT ONLY THE RECOURSE MADE BY THE ASSESSING OFFICER TO THE PROVISIONS OF S.144 OF THE ACT, FOR COMPLETING THE ASSESSMENT EX - PARTE, BUT ALSO THE MERITS OF THE ADDITION OF RS.24,12,148 MADE BY THE ASSESSING OFFICER. THE CIT(A), HOWEVER, NOT CONVINCED WITH THE CONTENTION S O F THE ASSESSEE, UPHELD THE ACTION OF THE ASSESSING OFFICER ON BOTH THE COUNTS, AND DISMISSED THE APPEAL OF THE ASSESSEE. ITA NO. 573 /HY D/ 10 SHRI GUBBALA SATYANARAYANA, HYDERABAD 3 6 . WE HEARD BOTH SIDES AND PERUSED THE MATERIAL ON RECORD, INCLUDING THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES. BEFORE US, THE ASSESSEE FILED A PETITION UNDER RUE 29 OF THE APPELLATE TRIBUNAL RULES, 1963, SEEKING TO FILE ADDITIONAL EVIDENCE. IT HAS BEEN STA T ED THEREIN THAT FOR ARRANGING HIS SONS VISA FOR FURTHER EDUCATION ABROAD, THE ASSESSEE APPROACHED ONE SRI RAMA CHAN D RA MURTHY TO ARRANGE FOR THE FUNDS AND THE SAID PERSON HAD ACCOR D INGLY ARRANGED THE FUNDS. DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEE D IN G S, THE SAID PERSON HAS NOT COOP E RATED WITH THE ASSESSEE O F EXPLAINING HIS SOURCES FROM WHICH HE COULD ARRANGE THE FUNDS TO THE ASSESSEE. HOWEVER, SUBSEQUENTLY, WHEN THE ASSESSEE HAD CONTACTED HIM, HE STATED THAT HE HAS RAISED FUN D S F R OM HIS FRIEND, AND HI S FRI E ND BY NAME, P.CHAND BASHA HAS GIVEN AN AFFIDAVIT IN SUPPORT OF THE AMOUNTS LENT BY HIM TO SRI RAMA CHANDRA MURTHY. INVITING OU R ATTENTION TO TH E SAID AFFIDAVIT AND ITS ENCLOSURE, FURNISHED BEFORE US DURING THE PRESENT APP E LLATE PROCEEDINGS, IT IS SUB MITTED THAT THE SAME COULD NO T BE PRODUCED EARLIER BEFORE TH E L OWER AUTHORITIES, AS THE SAID SRI RAMA CHA NDRA MURTHY HAS NO T COOPERATED WITH THE ASSESSEE, AND HE HAS COME FORWARD ONLY NOW, WITH THE AFFIDAVIT OF SHRI CHAND BASHA TO PROVE HIS SOURCE FOR THE FUNDS. THE ASSESSEE PLEADED FOR ADMISSION OF THIS ADDITIONAL EVIDENCE, AS IT GOES TO THE ROOT OF THE MATTER. 7. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, WE FIND THAT IT IS ONLY BECAUSE OF THE NON - COMPLIANCE BY THE ASSESSEE TO THE NOTICES ISSU ED BY THE ASSESSING OFFICER, WHICH CONSTRAINED HIM TO MAKE THE ASSESSMENT UNDER S.144 OF THE ACT, AND CONSEQUENT ABSENCE OF ANY EVIDENCE FURNISHED TO EXPLAIN THE DEPOSIT OF RS.24,12,148 MADE INTO THE SAVINGS ACCOUNT O F THE ASSESSEE, THAT THE IMPUGNED ADDIT ION HAS BEEN MADE. NOW THAT THE ASSESSEE HAS COME FORWARD WITH EVIDENCE IN THE FORM OF AN AFFIDAVIT TO ESTABLISH THE SOURCE FOR THE FUNDS DEPOSITED BY HIM INTO HIS SAVINGS ACCOUNT, AND SINCE THE SAID EVIDENCE GOES TO THE ROOT OF THE MATTER , HAVING A BEARI NG ON THE DETERMINATION OF THE POINT AT ISSUE , ITA NO. 573 /HY D/ 10 SHRI GUBBALA SATYANARAYANA, HYDERABAD 4 WE FIND IT WORTHWHILE TO ADMIT THE SAME. FURTHER, SINCE THE SAID AFFIDAVIT DATED 8.1.2011 WAS SUBSEQUENT TO THE PASSING OF THE IMPUGN E D ORDERS BY THE LOWER AUTHORITIES, THERE IS JUSTIFICATION FOR THE ASSESSEE FOR HAVING NOT FILED THE SAME BEFORE THE LOWER AUTHORITIES . WE DO SO ACCORDINGLY, AND SETTING ASIDE THE IMPUGNED ORDERS OF THE LO WE R AUTHORITIES, R E STORE THE MATTER TO THE FILE O F THE ASSESSING OFFICER FOR FRESH CONSIDERATION. THE ASSESSING OFFICER IS DIR ECTED TO EXAMINE THE MATTER AFRESH ON ITS OWN MERIT, IN THE LIGHT OF THE ADDITIONAL EVIDENCE FURNISHED BEFORE US, AND ALSO AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . ASSESSEE IS ALSO DIRECTED TO FURNISH THE DETAILS AS MAY BE CALLED FO R BY THE ASSESSING OFFICER, AND THE REQUISITE EVIDENCE TO SUBSTANTIATE ITS CASE, AND COOPERATE WITH THE DEPARTMENT IN THE EARLY FINALIZATION OF THE ASSESSMENT. WE REFRAIN FROM EXPRESSING ANY OPINION ON THE MERITS OF THE CASE, AND DIRECT THAT T HE ASSESSIN G OFFICER SHALL REDECIDE THE ISSUE IN ACCORDANCE WITH LAW, BY PASSING A SPEAKING ORDER ON ALL THE ASPECTS OF THE MATTER. WE DIRECT ACCORDINGLY. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF HEARING ON 4 .1 1 .2013 SD/ - SD/ - (CHANDRA POOJARI ) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER. JUDICIAL MEMBER. D T/ - 4 TH NOVEMBER , 201 3 COPY FORWARDED TO: 1. SHRI GUBBALA SATYANARAYANA, C/O. SHRI K.VASANT KUMAR, A.V. RAGHU RAM, , ADVOCATES, FLAT NO.610, 6TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. ITA NO. 573 /HY D/ 10 SHRI GUBBALA SATYANARAYANA, HYDERABAD 5 2. INCOME TAX OFFICER, WARD 1 , SANGAREDDY 3. 4. 5. COMMISSIONER OF INCOME - TAX(APPEALS) II HYDERABAD C OMMISSIONER OF INCOME - TAX 1 , HYDERABAD DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD B.V.S.