Harish Omprakash Agarwal, Hyderabad V. DCIT., Central Circle-1(3), Hyderabad

ITA 651/Hyd/2022

AI Insights

The case involves Harish Omprakash Agarwal, a resident of Hyderabad and dealer in gold ornaments, who was intercepted by a flying squad during the Parliamentary Constituency Elections in Peddapalli on 21/03/2019. He was found in possession of cash amounting to Rs. 26,76,200 and gold ornaments weighing 543 grams. The Assessing Officer added a sum of Rs. 24,41,004 to the assessee's income for the assessment year 2019-20, citing lack of proof for the source of the cash and gold. The assessee's appeal to the CIT(A) was dismissed for non-prosecution, leading to the current appeal before the Tribunal. The Tribunal found that the assessee was not adequately notified of the hearing dates due to discrepancies in the email addresses used, and thus, justice necessitated a re-examination of the case by the Assessing Officer.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133404 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-02-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 17-11-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “SMC”, HYDERABAD BEFORE SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA No. 651/Hyd/2022 (निर्धारण वर्ा / Assessment Year: 2019-20) Harish Omprakash Agarwal, Hyderabad [PAN No. ALCPA1535D] Vs. Dy. Commissioner of Income Tax, Central Circle-1(3), Hyderabad अपीलधर्थी / Appellant प्रत्‍यर्थी / Respondent निर्धाररती द्वधरध / Assessee by: Shri K.A. Sai Prasad, AR रधजस्‍व द्वधरध / Revenue by: Shri A.P.Babu, DR सुिवधई की तधरीख/Date of hearing: 02/02/2023 घोर्णध की तधरीख/Pronouncement on: 02/02/2023 आदेश / ORDER Aggrieved by the order dated 24/08/2022 passed by the learned Commissioner of Income Tax (Appeals)-11, Hyderabad (“Ld. CIT(A)”), in the case of one Harish Omprakash Agarwal (“the assessee”) for the assessment year 2019-20, assessee preferred this appeal, mainly submitting that no reasonable opportunity was granted to him before the first appellate authority and also that the learned Assessing Officer failed to consider the material that was produced before him to explain the possession of cash, gold and bullion that was found in his custody. 2. Brief facts of the case are that the assessee is a resident of Hyderabad and dealing in gold ornaments. According to the assessee, he was in the habit of travelling, carrying gold and bullion for sale at various ITA No. 651/Hyd/2022 Page 2 of 6 places and on one said occasion i.e., on 21/03/2019 while he was in Bellampalli, he was intercepted by the flying squad in view of the Parliamentary Constituency Elections of Peddapalli, since the election code was in vogue. Assessee was found with cash of Rs. 26,76,200/-, gold ornaments weighing 543 gms. and assessee explained that for the purpose of selling the gold and ornaments, he was travelling. The flying squad seized the cash and gold. According to the learned Assessing Officer when asked, the assessee failed to produce any proof of his travel from Hyderabad to Bellampalli and also to establish the sources of the cash and gold. On this premise, learned Assessing Officer made addition of a sum of Rs. 24,41,004/- to the income of the assessee returned for the assessment year 2019-20 and passed the order dated 10/06/2021. 3. Aggrieved, assessee preferred appeal before the learned CIT(A). The impugned order shows that in spite of granting several adjournments, to be more precise, eight adjournments notifying the dates of hearing, the assessee failed to respond and, therefore, learned CIT(A) drew an inference that the assessee lost interest in the matter and appeal was liable to be dismissed for non-prosecution. Learned CIT(A), however, adverted to the facts of the case and decided it on merits in the absence of the assessee and dismissed it by way of the impugned order. 4. Assessee is aggrieved by the action of the authorities below and preferred this appeal, stating that the assessee is not familiar with the mails to which the notices by the learned CIT(A) were sent and, therefore, the notices and the dates of hearing were not in his knowledge. Further contention of the assessee is that the authorities below failed to consider material produced by the assessee in the shape of purchases and sales bills, stock register, GST returns, returns of income for the assessment year 2019-20 and sales summary as per GSTR3B. He, therefore, submits that inasmuch as the assessee is not aware of the dates of hearing before the ITA No. 651/Hyd/2022 Page 3 of 6 learned CIT(A), he could not bring all the material before the learned CIT(A), resulted in dismissal of the appeal. 5. Learned AR submits that in the interest of justice, given an opportunity, the assessee is ready to prosecute the appeal diligently by placing the material that was produced before the learned Assessing Officer, before the learned CIT(A) also, so that the ends of justice could be met. 6. Per contra, it is the submission of learned DR on behalf of the Revenue that notices were sent to the e-mail address furnished by the assessee in his PAN details and, therefore, it cannot be said that there is no sufficient notice to the assessee. Inasmuch as the assessee failed to avail the opportunities granted by the first appellate authority, it is not open for the assessee to say that because of non-grant of sufficient opportunity, the assessee could not prosecute his appeal diligently. He further submitted that the learned CIT(A) disposed of the appeal on merits also. 7. I have gone through the record in the light of the submissions made on either side. There is no dispute as to the fact that on 21/03/2019 at the time of General Elections for the Parliament, the assessee was found possessing cash, gold and gold ornaments at Bellampalli and he was intercepted by the flying squad. However, according to the assessee, such carrying of gold and ornaments was part of his business and the cash is the sale proceeds received at various places before reaching Bellampalli. According to the assessee, it is the general practice in his business. 8. Assessee produced before me the copies of the material said to have been produced by him before the learned Assessing Officer in the shape of purchase and sales bills, extracts from the stock register, GST returns for February and March, 2019, return of income for the assessment year 2019-20 and the sales summary as per the GSTR3B and ITA No. 651/Hyd/2022 Page 4 of 6 submits that it establishes the fact of his model of business and justifies his possessing that much of cash, gold and ornaments at the time of interception by the flying squad. According to him, if this material is considered in an objective way by the learned Assessing Officer by making verifications with concerned authorities where the transactions stood registered, there is no scope for making any addition on this aspect. 9. Further contention of the assessee is that the e-mail address that is tacked to the PAN is different from the e-mail that was furnished in Form- 35 at the time of preferring appeal before the learned CIT(A), but, unfortunately, such e-mail address furnished in Form-35 is lost sight and the notice perhaps could have been sent to the e-mail address, which was found in the PAN details, which is not in vogue. According to the assessee precisely for this reasons, he was not aware of the various dates of hearing that were fixed by the learned CIT(A) and the notices issued notifying the same. 10. The fact of variance in the e-mail address furnished in Form-35 and the e-mail address that was tacked to the PAN is verifiable. Further, the ordinary human conduct has to be considered while deciding the matters and the assessee certainly does not stand to gain by remaining ex parte before the learned CIT(A) having preferred the appeal. It is possible that the e-mail address which is in vogue was furnished to the authorities in Form-35 and it is also possible that the other e-mail address that was tacked to the PAN details may not be in regular use. Since the assessee does not stand to gain by omitting his presence before the learned CIT(A) and submitting the case on merits, I am of the considered opinion that there is nothing to dis-believe the version advanced by the assessee. 11. The documents that are produced before me today are enumerated above and a perusal of the assessment order clearly shows that the learned Assessing Officer did not advert to such material nor any comment ITA No. 651/Hyd/2022 Page 5 of 6 is offered by him on such documents. For deciding the liability of the assessee, the exercise of considering this document is necessary and because of the absence of the assessee before the learned CIT(A), learned CIT(A) also had no chance of re-appraising this material. I, therefore, am of the opinion that it would be in the interest of justice to direct the learned Assessing Officer to consider and comment on the documentary evidence that is produced before him in the shape of purchase and sales bills. Extracts from the stock register, GST return for the months of February and March, 2019 and sales summary as per the GSTR3B and to take a view afresh according to law. In view of the above, I set aside the impugned orders and restore the issue to the file of learned Assessing Officer to comply with this requirement of verification of material and returning a finding of fact accordingly, after affording an opportunity to the assessee. The grounds are accordingly treated as allowed for statistical purposes. 12. In the result, appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on this the 2 nd day of February, 2023. Sd/- (K. NARASIMHA CHARY) JUDICIAL MEMBER Hyderabad, Dated: 02/02/2023 TNMM ITA No. 651/Hyd/2022 Page 6 of 6 Copy forwarded to: 1. Harish Omprakash Agarwal, C/o. Katrapati & Associates, 1-1-298/2/B/3, 1 st Floor, Ashok Nagar, Street No. 1, Hyderabad. 2. Dy. Commissioner of Income Tax, Central Circle-1(3), Hyderabad. 3. CIT(A)-11, Hyderabad. 4. Pr.CIT(Central), Hyderabad. 5. DR, ITAT, Hyderabad. 6. GUARD FILE. TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD