(Late) Mudunuri Venkata Subba Raju Rep. by L/R Mudunuri Venkata Suryanarayana Raju, Visakhapatnam V. ITO, Ward-11(5), Hyderabad

ITA 727/Hyd/2022

AI Insights

The case involves an appeal by Mudunuri Venkata Suryanarayana Raju against the order of the Commissioner of Income Tax (Appeals), which had dismissed his appeal ex parte regarding additions made under section 69A of the Income Tax Act, 1961, for unexplained cash deposits during the demonetization period. The Tribunal noted procedural lapses, including the issuance of notices to the deceased father of the assessee and the failure of the CIT(A) to consider the written submissions made by the assessee. The Tribunal found that the assessee, an agriculturist, had not participated in the earlier proceedings but was entitled to a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122338 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 29-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 142(1); 133(6); 143(2); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ SMC ‘ Bench, Hyderabad BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER ITA No.727/Hyd/2022 Assessment Year: 2017-18 Mudunuri Venkata Suryanarayana Raju, L/R of Mudunuri Venkata Subba Raju, Visakhapatnam. PAN : BMIPM6736Q. Vs. The Income Tax Officer, Ward – 11(5), Hyderabad. (Appellant) (Respondent) Assessee by: Ms. S. Sandhya, Advocate. Revenue by: Sri Naveen Kumar. Date of hearing: 06.03.2023 Date of pronouncement: 15.03.2023 O R D E R PER LALIET KUMAR, J.M. The appeal of the assessee for A.Y. 2017-18 arises from the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dt.26.10.22 invoking proceedings under section 144 of the Income Tax Act, 1961 (in short, “the Act”). 2 ITA No.727/Hyd/2022 2. The grounds raised by the assessee reads as under : “1. The order of the learned CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned CIT(A) is not justified in overlooking the written submissions and the supporting documents uploaded on 14.09.2022 and dismissing the appeal exparte. 3. The learned CIT(A) ought to have deleted the addition of Rs.21,65,948/- made by the Assessing Officer u/s 69A of the Act towards alleged unexplained cash deposits in the bank account.” 3. The appeal filed by the assessee is barred by limitation by 05 days. He has moved a condonation petition explaining reasons thereof. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, I condone the delay and admit the appeal for hearing. 4. Facts of the case, in brief, are that the assessee was found to have deposited Rs.5,00,000/- during the demonetization period, also not filed income tax return for A.Y. 2017-18 and as the assessee failed to explain the source of said deposit of cash made in old currency, notice u/s 142(1) of the Act was issued to the assessee on 13.03.2018 and served upon him from time to time, so also the show cause notice dt.23.09.2019. Even after grant of several opportunities, assessee failed to comply the notices and failed to furnish the required information sought for. During the course of assessment proceedings, notice u/s 133(6) of the Act was issued to banks and obtained bank statements. On verification of bank statements, found that assessee had various 3 ITA No.727/Hyd/2022 credit entries including cash deposits amounting to Rs.21,65,948/- for A.Y. 2017-18 which remains unexplained. Hence, the Assessing Officer had completed the assessment interalia by making an addition of Rs.21,65,948/- u/s 69A of the Income Tax Act, 1961 and also initiated penalty proceedings u/s 271F separately. 5. Feeling aggrieved with the order of Assessing Officer, assessee filed an appeal before the ld.CIT(A) who dismissed the appeal of assessee. 6. Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us. 7. Before me, it is the contention of the ld. AR that the bank account which is the subject matter of the proceedings was opened in the name of the assessee on 21.10.2008 with Maharaja Cooperative Urban Bank Ltd, 3rd Lane, Dwaraka Nagar, Visakahpatnam. 8. On the other hand, the Senior ld. DR from the assessment record had pointed that the reply was received from the Branch Manager on 12.09.2019 along with the SBI CA amount submitted for the period from 01.04.2015 to 31.03.2016. Based on that it was submitted that the bank account was in the name of Venkata Subba Raju Mudunuri having PAN No.BM1PM6736. Here, the controversy is that the father of the assessee namely, Venkata 4 ITA No.727/Hyd/2022 Subba Raju Mudunuri had died on 06.07.2013. Therefore, the question arises as to how the bank account was operational after the death of the father namely, M. Venkata Subba Raju. 9. In the present case, notice u/s 143(2) of the Act were issued in the name of the father who had admittedly died on 06.07.2013 i.e., much prior to the issuance of the notice. Thereafter, the legal heirs of the deceased were brought on record, who submitted that due to shortage of time, they could not appear before the Assessing Officer. However, when the assessment order was passed, the assessee preferred the appeal before the ld.CIT(A). The ld.CIT(A) had passed an exparte order without considering the written submissions placed on record through the virtual mode. The confirmation of the same is available with us at page 2 of the paper book submitted before us showing that the the said written submissions were uploaded. However, the ld.CIT(A) without considering the uploaded written submissions had passed an exparte order. 10. Ld. LD. DR further submitted that despite various opportunities granted, assessee could not appear before the ld.CIT(A) and therefore, the Department was left with no other option but to pass an exparte order. 11. I have heard the rival submissions and perused the material on record. The short question before me is that the Department had received the information with respect to specified 5 ITA No.727/Hyd/2022 bank transaction during the demonetization period whereby more than Rs.20 lakhs were deposited in the Financial Year 2016-17 in the bank account No.10110202000006240. It was submitted that the said bank account was in the name of the assessee before us and not in the name of the father of the assessee. Therefore, the Department had wrongly issued notice u/s 143(2) of the Act against the father of the assessee. It is the submission of the assessee before us that the assessee is an agriculturist holding more than 28 acres of land and also sold some part of the land from where he got some amount. As the case may be, assessee had not participated in the proceedings before the Assessing Officer as well as the ld.CIT(A). In my view, it will be appropriate if the case is remanded back to the file of Assessing Officer with a direction to denovo to conduct assessment proceedings afresh after affording opportunities of hearing to the assessee in accordance with law. The assessee shall be at liberty to file documents, if any, as required for proving his case and the Assessing Officer shall consider the evidences, if any, filed by the assessee. Needless to say the Assessing Officer shall examine those documents / evidence filed by the assessee and also the other documents available on record. After considering all the submissions and the documents filed by the assessee and the submissions made by the assessee, the Assessing Officer shall pass a detailed speaking order dealing with the contentions of the assessee. Thus, the appeal of the assessee is allowed for statistical purposes. 6 ITA No.727/Hyd/2022 12. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 15 th March, 2023. Sd/- (LALIET KUMAR) JUDICIAL MEMBER Hyderabad, dated 15 th March, 2023. TYNM/sps Copy to: S.No Addresses 1 Mudunuri Venkata Suryanarayana Raju, L/R of Mudunuri Venkata Subba Raju, D.No.7-17-7/6, Flat No.6, Vijaya Apartments, Kirlampudi Layout, Visakhapatnam. 2 The Income Tax Officer, Ward 11(5), Hyderabad. 3 DR, ITAT Hyderabad Benches 4 Guard File By Order