Sailaja Gurijala , Hyderabad V. Income Tax Officer, Ward-11(4), Hyderabad

ITA 916/Hyd/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7101 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 15-10-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Business income; Source of fund; Reasonable cause
• Section: 271(1)(c); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I TA NO . 9 16 / HYD/201 8 A SSESSMENT Y EAR : 2013 - 14 SA I LAJA GURIJALA, HYDERABAD. PAN A DWPG 1935 F VS. INCOME - T AX OFFICER, WARD 11( 4), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S HRI S. RAMA RAO REVENUE BY: S HRI RAJEEV BENJWAL DATE OF HEARING: 1 5 / 1 0 / 201 9 DATE OF PRONOUNCEMENT: 23 / 1 0 /201 9 O R D E R PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A ) 5, HYDERABAD, DATED 24/01/2018 FOR AY 2013 - 14 , WHEREBY HE CONFIRMED THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT. 2. ON PERUSAL OF RECORD, WE FIND THAT THERE IS A DELAY OF 20 DAYS IN FILING THIS APPEAL BY THE ASSESSEE. TO THIS EFFECT, THE ASSESSEE FILED A PETITION FOR CONDONATION OF DELAY, IN WHICH IT WAS STATED THAT THE ASSESSEE WAS UNDER MEDICAL TREATMENT AT THE RELEVANT POINT OF TIME, DUE TO WHICH, THERE WAS A DELAY OF 20 DAYS IN FILING THE APPEAL. IT WAS, THEREFORE, STATED THAT THE DELAY WAS NOT INTENT IONAL AND BEYOND CONTROL AND THE DELAY MAY BE CONDONED AND ADMIT THE APPEAL FOR ADJUDICATION. ASSESSEE ALSO FILED THE AFFIDAVIT AFFIRMING THE SAID REASONS . I.T.A. NO. 916 /HYD/1 8 SAILAJA GURIJALA, HYD. 2 2.1 AS THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE, WE CONDONE THE DELAY AND ADMIT THE APPEAL F OR HEARING AND ADJUDICATION. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE , AN INDIVIDUAL, FILED HER RETURN OF INCOME FOR THE AY 20 13 - 14 ON 2 5 / 12 /20 13 ADMITTING TOTAL INCOME OF RS. 18,45,460 / - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE, AGAINST WHICH THE ASSESSEE FILED THE REQUIRED INFORMATION AS CALLED FOR. 3 .1 DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE AO OB SERVED THAT THE ASSESSEE CONSTRUCTED FLATS AND SOLD AT ANJANEYA NAGAR, KUKATPALLY. WHEN THE AO WAS ASKED TO PRODUCE BOOKS OF ACCOUNT, BANK ACCOUNT COPIES AND TO EXPLAIN THE CASH DEPOSITS MADE IN THE BANK ACCOUNTS DURING THE AY UNDER CONSIDERATION, THE ASSE SSEES AR SUBMITTED A LETTER DATED 26/02/2016 AND STATED THAT THE ASSESSEE HAD LOST HER BOOKS OF ACCOUNT AND THE DATA MAINTAINED IN COMPUTER GOT CORRUPTED AND EXPRESSED HER INABILITY TO PRODUCE THE SAME. 3 .2 IN THE ABSENCE OF BOOKS OF ACCOUNT, THE AO PROPOSED TO ESTIMATE THE INCOME FROM SALE OF FLATS AT 10% OF THE GROSS RECEIPTS ADMITTED OF RS. 2,19,95,500/ - , WHICH WORKED OUT TO RS. 21,99,550/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE, WHICH WAS AGREED B Y THE ASSESSEE. 4 . THEREAFTER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) ON THE GROUND THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AND ALSO FURNISHED INACCURATE PARTICULARS OF INCOME. ACCORDINGLY, LEVIED A PENALTY OF RS. 6,20,572/ - U/S 271(1)(C) OF THE ACT. I.T.A. NO. 916 /HYD/1 8 SAILAJA GURIJALA, HYD. 3 5 . WHEN THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), THE CIT(A) DISMISSED THE APPEAL ON TECHNICAL GROUNDS THAT THE ASSESSEE HAS NOT E - FILED THE APPEAL WHICH IS MANDATORY WITHOUT GOING INTO THE MERITS OF THE CASE. 6 . AG GRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2) THE LEARNED COMMISSIONER OF INCOME - TA X (APPEALS) ERRED IN DISMISSING THE APPEAL IN LIMINE WITHOUT CONSIDERING THE GROUNDS ON MERIT. 3) THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE HELD THAT PENALTY U / S 271(1)(C) OF THE I.T.ACT IS NOT LEVIABLE AS THERE IS NEITHER CONCEALMEN T OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE HELD THAT THE PENALTY IS NOT VALIDLY INITIATED AS PROPER NOTICE WAS NOT ISSUED. 5) ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REASON FOR ACCEPTING THE ESTIMATED INCOME AND NOT GOING FOR APPEAL AGAINST THE ASSESSMENT ORDER BY THE ASSESSEE IS ONLY TO MAINTAIN GOOD RELATION WITH THE DEPAR TMENT AND THERE WAS NO NON - DISCLOSURE OF INCOME AS ASSESSEE HAS ADMITTED ALL HER SOURCES OF INCOMES. THEREFORE, HE SUBMITTED THAT THE PENALTY LEVIED BY THE DEPARTMENT IS NOT PROPER WHICH MAY BE CANCELLED. 7. THE LD. DR, ON THE OTHER HAND RELIED ON THE OR DERS OF REVENUE AUTHORITIES. I.T.A. NO. 916 /HYD/1 8 SAILAJA GURIJALA, HYD. 4 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS OBSERVED THAT THE AO ACCEPTED THE LOSS OF BOOKS OF ACCOUNT OF THE ASSESSEE AND THE DATA MAINTAINED IN COMPUTER AND PROCEEDED TO ESTIMATE THE INCOME FROM SALE OF FLATS AT 10%, WHICH COMES TO RS. 21,99,550/ - AND ADDED THE SAME TO THE RETURNED INCOME OF THE ASSESSEE, WHICH WAS ACCEPTED BY THE ASSESSEE. THE GROUND FOR LEVYING PENALTY BY THE AO IS THAT THERE WAS A CONSIDERABLE ENHANCEMENT OF INCOME UNDER THE HEAD BUSINESS INCOME, FOR WHICH THE ASSESSEE ALSO AGREED AND NO APPEAL HAS BEEN FILED AGAINST THE ASSESSMENT ORDER. IN OUR VIEW, THE AO HAS FAILED TO ESTABLISH THAT THE ASSESSEE HAS CONCEALED HER INCOME OR FURNISHED INACCURATE PARTICULARS OF HER INCOME . IN FACT, THE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF HER INCOME, BASED ON WHICH, THE AO ESTIMATED THE INCOME AND MADE THE ADDITION, FOR WHICH THE ASSESSEE AGREED. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEES CASE IS NOT A FIT CASE TO LEVY PENA LTY U/S 271(1)(C). ACCORDINGLY, WE DIRECT THE AO TO CANCEL THE PENALTY OF RS. 6,20,572/ - LEVIED U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 23 RD OCTOBER , 201 9. SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER HYDERABAD, DATED 23 RD OCTOBER , 201 9. KV I.T.A. NO. 916 /HYD/1 8 SAILAJA GURIJALA, HYD. 5 COPY FORWARDED TO: 1. SMT. SAILAJA GURIJALA, PLOT NO. 3 AND 20, SONY BUSINESS COMPLEX, 2 ND FLOOR, PRASANTH NAGAR, IDA, KUKATPALLY, HYDERABAD . 2 . IT O , WARD 11(4 ) , IT TOWERS, AC GUARDS, MASABTANK, HYDERABAD 500 004. 3 . CIT (A) - 5 , HYDERABAD. 4. PR. CIT 5 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE