LOKANADHA RAO BATTINA, VISAKHAPATNAM V. INCOME TAX OFFICER, WARD-3(3), VISAKHAPATNAM

ITA 92/VIZ/2023

AI Insights

The case involves Lokanadha Rao Battina, who appealed against the penalty levied by the AO for alleged non-compliance with notices under section 142(1) of the Income Tax Act, 1961. The assessee had initially filed a return declaring a taxable income and later revised it, declaring a short-term capital loss. Following a notice under section 148, the assessee filed a return declaring a higher income and the same capital loss. The AO, citing non-cooperation from the assessee, completed the assessment ex-parte and levied a penalty for non-compliance with the notices. The CIT(A) upheld the penalty, leading to the appeal before the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135987 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-05-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 08-03-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 144; 142(1); 274

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम “एसएमसी”पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./I.T.A.No.92/Viz/2023 (ननधधारण वर्ा / Assessment Year : 2017-18) Lokanadha Rao Battina D.No.54-11-33/3/1, Aditya Nagar Isukatota Visakhapatnam [PAN : APQPB9831H] Vs. Income Tax Officer Ward-3(3) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri I Kama Sastry, AR प्रत्यधथी की ओर से / Respondent by : Shri Sankar Pandi, DR सुनवधई की तधरीख / Date of Hearing : 22.05.2023 घोर्णध की तधरीख/Date of Pronouncement : 20.06.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide DIN & Order No.ITBA/NFAC/S/250/2022-23/1049592210(1) arising out of assessment order passed u/s 272 of the Income Tax Act, 1961 (in short ‘Act’) dated 09.09.2022 for the Assessment Year (A.Y.) 2017-18. 2 I.T.A. No.92/Viz/2023, A.Y.2017-18 Lokanadha Rao Battina, Visakhapatnam 2. Brief facts of the case are that the assessee, engaged in the business of sun roof painting works in the name and style of Laila Build Water Proof Treatment for the RCC Roofs under the works contracts and also engaged in the business of fish trading as commission agent filed his return of income declaring taxable income of Rs.8,72,320/- for the A.Y.2017-18 on 05.08.2017 after deduction of Rs.1,60,000/- under Chapter VIA. The said original return was revised, declaring taxable income of Rs.8,72,320/- as earlier in addition to short term capital loss of Rs.33,66,496/- from sale of immovable property. A notice u/s 148 dated 31.03.2021 was issued, in response to which, the assessee filed his return of income, declaring gross total income of Rs.10,32,324/- and short term capital loss of Rs.33,66,496/-. The assessee filed a letter before the AO, requesting to supply the photostat copies of the reasons recorded for recopening of the assessment along with note on the order sheet and photo copy of the sanction obtained u/s 151 for issue of notice u/s 148 on 30.09.2021, in response to which, the AO had furnished reasons recorded for reopening and provided a portion of the approval which was unsigned on 17.03.2022. The AO held that due to non co-operative attitude of the assessee in making compliance of notices issued u/s 142(1) and the assessment being getting barred by time on 31.03.2022, 3 I.T.A. No.92/Viz/2023, A.Y.2017-18 Lokanadha Rao Battina, Visakhapatnam he is left with no other alternative but to complete the assessment ex- parte u/s 144 of the Act on the basis of information available on record and with best of judgement by making additions u/s 69A, 69, 69D and 69C of the Act and assessed the income at Rs.5,14,84,796/-. The AO passed the assessment order u/s 144 r.w.s. 144B of the Act. Show cause notice u/s 274 r.w.s. 271AAC(1) and 270A of the Act was generated in the system. The AO had also initiated penalty proceedings u/s 272A(1)(d) for non compliance to the notices issued u/s 142(1) of the Act dated 25.09.2021 and 12.03.2022. 3. On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal : 1. The Assessing Officer is not justified in levying penalty under section 272A(1)(d) for non-compliance of two notices issued under section 142(1) and the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi is not justified in confirming the same when the assessee has complied with the two notices evidenced by acknowledgements generated on ITBA Portal and also furnished before the CIT(Appeals). 2. The appellant craves leave to add to, modified, alter, delete all or any of the above grounds of appeal. 4 I.T.A. No.92/Viz/2023, A.Y.2017-18 Lokanadha Rao Battina, Visakhapatnam 5. The only contention of the Ld.AR is that the assessee had complied with the notices issued u/s 142(1) of the Act issued on 22.09.2021 and 22.03.2022, but, the AO levied penalty u/s 272A(1)(d) of the Act, which is not justified. The Ld.AR further contended that the Ld.CIT(A) is also not justified in confirming the penalty levied by the AO. The Ld.AR filed paper book before the Tribunal in support of his contentions and pleaded to set aside the order passed by the Ld.CIT(A) and quash the penalty levied. 6. Per contra, the Ld.DR relied on the order of the Ld.CIT(A) and pleaded to uphold the same and dismiss the appeal of the assessee. 7. I have heard both the parties and perused the orders of the lower authorities. It is evident from the order of the AO that the Ld.AO had initated penalty proceedings u/s 272A(1)(d) for non compliance of the notices u/s 142(1) of the Act dated 25.09.2021 and 12.03.2022 and the Ld.CIT(A) confirmed the penalty levied. I have gone through the paper book filed by the assessee before me, from which it is evident that the assessee had complied with the two notices as evidenced by the acknowledgements generated on ITBA Portal and submitted the information called for by the AO within the due date. The assessee had also filed a letter before the AO to keep in abeyance the proceedings till 5 I.T.A. No.92/Viz/2023, A.Y.2017-18 Lokanadha Rao Battina, Visakhapatnam the disposal of appeal before the Ld.CIT(A), which was ignored by the AO and proceeded with levying penalty of Rs.20,000/- against the notices issued, which is not correct and against law. I, therefore, set aside the order passed by the Ld.CIT(A) and direct the AO to delete the penalty levied. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 20 th June, 2023. Sd/- (द ु व्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 20.06.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Lokanadha Rao Battina, D.No.54-11-33/3/1, Aditya Nagar, Isukatota, Visakhapatnam 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-3(3), Visakhapatnam 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam