Srinivas Rao Dudigalla , Warangal V. Income Tax Officer, Ward-1, Warangal

ITA 951/Hyd/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6261 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-09-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 14-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: T RAJENDRA PRASAD
• Keywords: Unexplained cash credit; Opportunity of being heard; Reasonable cause; Right to appeal
• Section: 143(3); 234B; 143(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.951/HYD/2018 ASSESSMENT YEAR: 2013 - 14 SRINIVAS RAO DUNDIGALLA, NO.5 - 11 - 374/1, PREM NAGAR COLONY, HANAMKONDA, WARANGAL - 506001. PAN: AJCPD 2670 G VS. INCOME TAX OFFICER, WARD - 1, WARANGAL. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI T. RAJENDRA PRASAD REVENUE BY: SMT. AMISHA S. GUPT, DR DATE OF HEARING: 26/09/2019 DATE OF PRONOUNCEMENT: 10 /10/2019 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 3, HYDERABAD DATED 27/02/2018 IN APPEAL NO. 0174/ITO - 1/WGL/WGL/CIT(A) - 3/2016 - 17 PASSED U/S. 143(3) R.W.S. 250(6) OF THE ACT FOR THE ASSESSMENT YEAR 2013 - 14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HIS APPEAL: - 1. THE LD. CIT(A) ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IN DISPOSING OF THE CASE WITHOUT ADJUDICATING THE GROUNDS, MERELY ON ACCOUNT OF THE FACT THAT FORM 35 WAS NOT ELECTRONICALLY FILED BUT WAS FILED IN PAPER FORMAT EVEN THOUGH 2 THE SAME WA S A TRIVIAL CURABLE IRREGULARITY BUT NOT A FATAL DEFECT RENDERING THE SUBSTANTIVE RIGHT OF APPEAL BEING TAKEN AWAY. 2. WITHOUT PREJUDICE TO THE ABOVE, A. THE ORDER OF THE A.O. IS ERRONEOUS IN LAW AS WELL AS IN THE FACTS OF THE CASE. B. THE ASSESSING OFFICE R ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE BY MAKING ADDITIONS OF RS. 72,81,356/ - U/S. 68 MERELY BASED ON THE ENTRIES IN THE BANK PASS BOOK EVEN THOUGH BANK PASS BOOK SHALL NOT BE CONSIDERED AS BOOKS OF ACCOUNT FOR THE PURPOSES OF SECTION 68 . C. THE A.O. ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE IIN MAKING AN ADDITION OF RS. 72,81,356/ - AS UNEXPLAINED CASH CREDITS BY INVOKING THE PROVISIONS OF SECTION 68 WITHOUT ANY BASIS AND WITHOUT BRINGING ANY MATERIAL ON RECORD. D. THE A.O. ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE BY BRINGING THE ENTIRE CREDITS IN THE BANK STATEMENT AS INCOME INSTEAD OF BRINGING THE PROFIT / LOSS ALONE TO THE COMPUTATION. E. THE A.O. ERRED IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE CASE BY M AKING ADDITIONS U/S. 68 WITHOUT ALLOWING PROPER OPPORTUNITY TO THE APPELLANT TO EXPLAIN CREDITS APPEARING IN THE BANK STATEMENT. F. THE A.O. ERRED IN CHARGING INTEREST U/S. 234B OF RS. 8,12,448/ - AND U/S. 234C OF RS. 559/ - . 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, VARY AND / OR WITHDRAW THE ABOVE GROUNDS OF APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN FURNITURE RETAIL BUSINESS FILED HIS RETURN OF INCOME FO THE AY 2013 - 14 ON 29/9/2013 DECLARING INCOME AT RS. 3,47,050/ - . INITIALLY THE RETURN WAS PROCESSED U/S. 143(1) AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND FINALLY ORDER WAS PASSED U/S. 3 143(3) OF THE AC T ON 23/3/2016 WHEREIN THE LD. AO MADE ADDITION TOWARDS UNEXPLAINED CASH CREDIT U/S. 68 OF THE ACT FOR RS. 72,81,356/ - BEING THE UNEXPLAINED CASH DEPOSITED IN THE TWO BANK ACCOUNTS OF THE ASSESSEE. THEREAFTER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD . CIT (A) HOWEVER, THE LD. CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE BY PASSING AN EX - PARTE ORDER SINCE NONE APPEARED ON THE DATE OF HEARING AND FURTHER THE ASSESSEE HAD NOT FILED THE APPEAL IN ELECTRONIC MODE BUT HAD FILED ONLY MANUALLY WHIC H IS NOT IN ACCORDANCE WITH THE RULE 45 OF THE IT RULES, 1962 BY OBSERVING AS UNDER: - CIRCLE NO.20/2016 F.NO.279/MISC/M - 54/2016/ITJ GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF DIRECT TAXES/ NEW DELHI, 26 TH MAY, 2016. SUB: - E - FILING OF APPEALS; EXTENSION OF TIME LIMIT REG. RULE 45 OF THE INCOME TAX RULES, 1962, MANDATES COMPULSORY E - FILING OF APPEALS BEFORE COMMISSIONER OF INCOME TAX (APPEALS) WITH EFFECT FROM 01/03/2016 IN RESPECT OF PERSONS WHO ARE REQU IRED TO FURNISH RETURN OF INCOME ELECTRONICALLY. IT HAS COME TO THE NOTICE OF THE CENTRAL BOARD OF DIRECTS (HEREINAFTER REFERRED TO AS THE BOARD) THAT IN SOME CASES THE TAXPAYERS WHO WERE REQUIRED TO E - FILE FORM 35, WERE UNABLE TO DO SO DUE TO LACK OF KNO WLEDGE ABOUT E - FILING PROCEDURE AND / OR TECHNICAL ISSUES IN E - FILING. ALSO, THE EVC FUNCTIONALITY FOR VERIFICATION OF E - APPEALS WAS MADE OPERATIONAL FROM 12/5/2016 FOR INDIVIDUALS AND FROM 19/5/2016 FOR OTHER PERSONS. WORD LIMIT FOR FILING GROUNDS OF AP P E AL AND MAPPING OF JURISDICTION OF COMMISSIONERS OF INCOME TAX (APPEALS) WERE ALSO A CAUSE OF GRIEVANCE IN SOME CASES. 2. THE MATTER HAS BEEN EXAMINED BY THE BOARD. WHILE THE UNDERLYING ISSUES RELATING TO E - FILING OF APPEALS HAVE SINCE BEEN ADDRESSED AND RESOLVED, IN ORDER TO MITIGATE ANY INCONVENIENCE CAUSED TO THE TAXPAYERS ON ACCOUNT OF THE NEW REQUIREMENT OF MANDATORY E - FILING APPEALS, IT HAS BEEN DECIDED TO EXTEND THE TIME LIMIT FOR FILING OF SUCH E - APPEALS. E - APPEALS WHICH WERE DUE TO BE FILED BY15 /05/2016 CA BE FILED UP TO 15/6/2016. ALL E - APPEALS FILED WITHIN THIS EXTENDED PERIOD WOULD BE TREATED AS APPEALS FILED IN TIME. 3. IN VIEW OF THE EXTENDED WINDOW FOR FILING E - APPEALS TAXPAYERS WHO COULD NOT SUCCESSFULLY E - FILE THEIR APPEAL AND HAD FILE D PROPER APPEALS ARE REQUIRED TO FILE AN E - APPEAL IN ACCORDANCE WITH RULE 45 BEFORE THE EXTENDED PERIOD IE 4 15/06/2016. SUCH E - APPEALS WOULD ALSO BE TREATED AS APPEALS FILED WITHIN TIME. AS CAN BE SEEN FROM THE ABOVE, IT WAS MANDATORY / COMPULSORY FOR E - F ILING OF APPEALS FOR WHICH ADEQUATE AMOUNT OF TIME WAS GIVEN BY THE CENTRAL BOARD OF DIRECT TAXES AND IN THIS CASE APPEALS WAS FILED ON 06/05/2016 IN PAPER FORMAT. IT WAS COMPULSORY OR MANDATORY ON PART OF THE APPELLANT TO HAVE E - FILED THE APPEAL. THE AP PELLANTS COUNSEL DID NOT HAVE ANY REASON OR ANY REASONABLE CAUSE FOR NOT E - FILING THE APPEAL. FURTHER, IN CASE OF E - FILING AFTER THE DUE DATE, THERE IS TO BE A CONDONATION REQUEST BY THE APPELLANT (FOR ESTABLISHING SUFFICIENT OR REASONABLE CAUSE OR ESTABLISHING BONAFIDE WHICH LEAD TO NO E - FILING OF THE APPEAL BY THE APPELLANT IN TIME). IN THE CASE OF THE APPELLANT, THERE WAS NO E - FILED APPEAL ITSELF. IN THIS CONTEXT, THE DECISION OF THE HONBLE ITAT, HYDERABAD IN THE CASE OF MADDI NARSAIAH VS. DCIT IS NOTEWORTHY . 4. BEFORE US, THE LD. AR SUBMITTED THAT THE LD. CIT (A) HAS PASSED AN EX - PARTE ORDER WITHOUT PROVIDING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. HE FU R THER ARGUED STATING THAT THE LD. CIT (A) HAD DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE WITHOUT ADDRESSING THE MERITS OF THE CASE. IT WAS THEREFORE PLEADED THAT ONE MORE OPPORTUNITY MAY BE PROVIDED TO THE ASSESSEE AND THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD. CIT (A) FOR DE NOVO CONSIDERATION. THE LD. DR ON THE OT HER HAND, VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE LD. AR AND ARGUED STATING THAT THE ASSESSEE HAD NOT FILED THE APPEAL IN THE ELECTRONIC MODE AS PRESCRIBED UNDER THE RULES THEREFORE, THE LD. CIT (A) DID NOT HAVE ANY OTHER OPTION BUT TO DISMISSED THE AP PEAL OF THE ASSESSEE IN LIMINE AS NOT MAINTAINABLE . I T WAS FURTHER POINTED OUT BY THE LD.DR THAT NEITHER THE ASSESSEE NOR HIS REPRESENTATIVE APPEARED BEFORE THE LD. CIT (A) ON THE DATE OF HEARING. 5 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. IT IS MANDATORY FOR THE ASSESSEE TO FILE THE APPEAL IN THE ELECTRONIC MODE AS PER RULE 45 OF THE RULES. THEREFORE, WE DO NOT FIND ANY FAULT IN THE ORDER OF THE LD. CIT (A) F OR DISMISSING THE APPEAL AS NOT MAINTAINABLE . FROM THE FACTS OF THE CASE IT IS ALSO APPARENT THAT T HE ASSESSEE HAD ALSO NOT COOPERATED BEFORE THE LD. CIT (A) IN THE PROCEEDINGS. HOWEVER, CONSIDERING THE PRAYER OF THE LD. AR THAT THE ASSESSEE HAD FILED T HE APPEAL MANUALLY AND THIS BEING THE FIRST YEAR WHERE THE RULES WERE AMENDED , WE ARE OF THE CONSIDERED VIEW THAT THE TECHNICAL FLAW IN NOT FILING THE APPEAL IN THE ELECTRONIC MODE CAN BE CURED BY FILING IT SUBSEQUENTLY IN THE ELECTRONIC MODE AS PRESCRIBED UNDER THE RULES . THEREFORE, IN THE INTEREST OF JUSTICE WE HEREBY REMIT THE ENTIRE MATTER BACK TO THE FILE OF LD. CIT (A) FOR DE NOVO CONSIDERATION AND TO PASS APPROPRIATE ORDER AS PER MERIT AND LAW , PROVIDED THE ASSESSEE FILES THE APPEAL IN THE ELECTRONIC MODE WITHIN 30 DAYS FROM THIS DATE. IF THE ASSESSEE DOES NOT COMPLY WITH THE DIRECTIONS MENTIONED HEREINABOVE, THEN THIS APPEAL OF THE ASSESSEE SHALL STAND DISMISSED AND THE ORDER OF THE LD. CIT (A) SHALL BE TREATED AS CONFIRMED. AS WE HAV E REMITTED THE ENTIRE MATTER BACK TO THE FILE OF THE LD.CIT(A), WE DO NOT FIND IT NECESSARY TO ADJUDICATE THE OTHER ISSUES RAISED IN THE APPEAL AS THE SAME IS NOT CONSIDERED IN THE FIRST APPELLATE PROCEEDINGS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. 6 PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2019. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 10 TH OCTOBER , 2019 OKK COPY TO: - 1) SRINIVAS RAO, DUNDIGALLA, C/O. P. ROSI REDDY, ADVOCATE AND RAJENDRA PRASAD TALLURI, FCA, FLAT NO.401 & 402, A - BLOCK, SRI DATTASAI APARTMENTS, RTC X' ROADS, HYDERABAD - 20. 2) ITO WARD - 1, AAYAKAR BHAVAN, WARANGAL. 3) THE CIT(A) - 3, HYDERABAD 4) THE PR. CIT - 3, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE