Shri.Chandrashekar Reddy, Bellary V. The Principal Commissioner of Income Tax, Gulbarga

MA 25/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7035 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-09-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 14-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISHRA J BENGALURU
• Assessee Lawyers: B S BALACHANDRAN
• Keywords: Unexplained investment; Income from undisclosed sources; Opportunity of being heard; Source of fund; Set aside
• Section: 143(3); 201; 254(2); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN, ACCOUNTANT MEMBER MP NO.24 & 25/BANG/2019 [IN ITA NOS. 2033 & 2034/BANG/2016] ASSESSMENT YEARS : 2009-10 & 2010-11 SHRI K. CHANDRASHEKAR REDDY, PLOT NO.31, SBI COLONY, NEAR HOUSING BOARD WATER TANK, GANDHINAGAR, BALLARY 583 103. PAN: AFYPR 4593J VS. THE PRINCIPAL COMMISSIONER OF INCOME TAX, KALBURGI. APPELLANT RESPONDENT APPELLANT BY : SHRI B.S. BALACHANDRAN, ADVOCATE RESPONDENT BY : SHRI PRIYADARSHI MISHRA, JCIT,(DR)(ITAT), BENGALURU . DATE OF HEARING : 04.09.2020 DATE OF PRONOUNCEMENT : 09.09.2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THESE ARE MISCELLANEOUS PETITIONS FILED BY THE A SSESSEE U/S. 254(2) OF THE INCOME-TAX ACT, 1961 [THE ACT] FOR RECTIFICA TION OF CERTAIN ERRORS IN THE ORDER OF TRIBUNAL DATED 11.01.2019. 2. THE ASSESSEE IS A CENTRAL GOVT. EMPLOYEE WORKIN G IN CENTRAL EXCISE AND CUSTOMS DEPT. FOR AY 2009-10 AN ORDER O F ASSESSMENT DATED 27.12.2011 WAS PASSED BY THE AO DETERMINING TOTAL I NCOME AT RS.5,22,560. THE CIT, GULBARGA, IN EXERCISE OF HIS POWERS U/S. 263 OF THE ACT PASSED AN ORDER DATED 24.03.2014 FOR AY 2009-10 ON THE GROUND THAT THERE WERE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE MP NO.24 & 25/BANG/2019 PAGE 2 OF 6 PREVIOUS YEAR RELEVANT TO AY 2009-10 OF RS.77.50 LA CS AND THE AO FAILED TO MAKE PROPER ENQUIRIES WITH REGARD TO THE SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNTS TO THE EXTENT OF RS.77.20 LAKHS. THE CIT ACCORDINGLY HELD THAT THE ORDER PASSED U/S. 143(3) OF THE ACT DATED 27.12.201 1 WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE AND HE SET ASIDE THE ASSESSMENT WITH A DIRECTION TO THE AO TO FRAME A FRESH ASSESSMENT O RDER IN ACCORDANCE WITH LAW, AFTER VERIFICATION OF DETAILS AND AFTER AFFORD ING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. FOR AY 2010-11 AN ORDER OF ASSESSMENT DATED 29.3 .2012 WAS PASSED BY THE AO DETERMINING THE TOTAL INCOME AT RS .2,89,468. THE CIT, GULBARGA, IN EXERCISE OF HIS POWERS U/S. 263 OF THE ACT PASSED AN ORDER DATED 24.03.2014 FOR AY 2010-11 ON THE GROUND THAT THE ASSESSEE MADE INVESTMENTS IN GOLD AND MUTUAL FUNDS TO THE EXTENT OF RS.61.96 LACS BY CLAIMING THE CASH DEPOSITED IN THE BANK IN AY 2009- 10 AS SOURCE OF FUNDS FOR THE AFORESAID INVESTMENTS. THE AO FAILED TO MA KE PROPER ENQUIRIES WITH REGARD TO THE SOURCE OF FUNDS FOR THE AFORESAID INV ESTMENTS, WHICH AGAIN IS THE CASH DEPOSIT OF RS.77.20 LACS IN THE BANK ACCOU NT OF THE ASSESSEE IN AY 2009-10. THE CIT WAS OF THE VIEW THAT A SUM OF RS.61.96 LACS IS TO BE TREATED AS UNEXPLAINED INVESTMENT FOR AY 2010-11. THE CIT ACCORDINGLY HELD THAT THE ORDER PASSED U/S. 143(3) OF THE ACT D ATED 29.3.2014 WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE AND HE SET ASIDE THE ASSESSMENT WITH A DIRECTION TO THE AO TO FRAME A FR ESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW, AFTER VERIFICATION OF DETAILS AND AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 4. THE AO, PURSUANT TO THE AFORESAID CITS ORDER, P ASSED AN ORDER DATED 27.03.2015 FOR AY 2009-10 WHEREIN HE MADE TH E FOLLOWING OBSERVATIONS:- MP NO.24 & 25/BANG/2019 PAGE 3 OF 6 SINCE THE NET DEPOSITS OF RS.77.20 LAKHS HAS BEE N TREATED AS ASSESSEE'S INCOME FROM UNDISCLOSED SOURCES FOR T HE ASST.YEAR 2010-11. THERE IS NO NEED OF MAKING THE ADDITION OF THE SAME DEPOSITS OF RS.77.20 LAKHS FOR A.Y 2009-10. AS IT A MOUNTS TO TAXING THE SAME AMOUNT TWICE. HENCE, THE ASSESSMENT FOR A.Y 2009-10 IS COMPLETED ACCEPTING THE RETURNED INCOME. RETURNED INCOME : 151320 ASSESSED INCOME : 151320 5. AS FAR AS AY 2010-11 IS CONCERNED, THE AO PASSED AN ORDER DATED 27.3.2015 WHEREIN HE BROUGHT TO TAX A SUM OF RS.77. 20 LACS AS UNEXPLAINED CASH DEPOSITS IN THE BANK ACCOUNT. 6. AGAINST THE AFORESAID TWO ORDERS OF ASSESSMENT P ASSED U/S.143(3) READ WITH SEC.263 OF THE ACT BOTH DATED 27.3.2015 F OR AY 2009-10 & 2010-11 RESPECTIVELY, THE PR.CIT, KALABURAGI IN EXE RCISE THE POWERS U/S. 263 OF THE ACT PASSED TWO ORDERS BOTH DATED 16.01.2 017. ACCORDING TO THE CIT, THE AO DID NOT IMPLEMENT PROPERLY THE DIRECTIO NS CONTAINED IN THE TWO ORDERS OF CIT PASSED U/S. 263 OF THE ACT DATED 24.0 3.2014 FOR AY 2009-10 & 2010-11 RESPECTIVELY AND HE DIRECTED THE AO TO PA SS A FRESH ASSESSMENT ORDER ON THE VARIOUS POINTS SET OUT IN PARA 6 & 8 O F THE RESPECTIVE ORDERS PASSED FOR AY 2009-10 & 2010-11. 7. WHEN THE PR. CIT INITIATED PROCEEDINGS U/S. 263 FOR THE SECOND TIME ON 09.08.2016 PROPOSING TO REVISE THE ORDER DATED 2 7.3.2015 U/S. 143(3) R.W.S. 263 OF THE ACT FOR AY 2009-10 & 2010-11 RESP ECTIVELY, THE ASSESSEE ON PROFESSIONAL ADVICE, FELT THAT HE SHOULD CHALLEN GE THE FIRST ORDERS U/S. 263 OF THE ACT DATED 24.3.2014 FOR AY 2009-10 & 201 0-11 RESPECTIVELY AND ACCORDINGLY FILED AN APPEAL AGAINST THE SAID ORDER ON 24.11.2016. ACCORDINGLY TWO APPEALS WERE FILED BY THE ASSESSEE BEFORE THE TRIBUNAL ON 24.11.2016 AGAINST THE TWO ORDERS DATED 24.3.2014 P ASSED U/S.263 OF THE ACT FOR AY 2009-10 & 2010-11 RESPECTIVELY. THERE W AS, THEREFORE, A DELAY MP NO.24 & 25/BANG/2019 PAGE 4 OF 6 OF 909 DAYS IN FILING THE APPEALS AGAINST THE TWO O RDERS PASSED U/S. 263 OF THE ACT BOTH DATED 24.3.2014 FOR THE AYS 2009-10 & 2010-11. 8. THE TRIBUNAL BY ITS ORDER DATED 11.01.2019 REFUS ED TO CONDONE THE DELAY IN FILING THE APPEALS AGAINST THE ORDERS DATE D 24.3.2014 PASSED U/S. 263 OF THE ACT FOR AY 2009-10 & 2010-11 RESPECTIVE LY. 9. IN THESE MPS, THE ASSESSEE HAS POINTED OUT THAT AT THE TIME OF HEARING OF THE APPEALS, THE TRIBUNAL HAS EXPRESSED THE VIEW THAT IT IS THE SECOND SET OF REVISIONARY ORDERS U/S. 263 OF THE AC T DATED 16.01.2017 THAT WILL SURVIVE AND THAT SHOULD HAVE BEEN CONTESTED AN D NOT THE FIRST SET OF ORDER U/S. 263 DATED 24.3.2014 BECAUSE ON PASSING O F THE SECOND SET OF REVISIONARY ORDERS THE FIRST SET OF REVISIONARY ORD ERS BECOME INFRUCTUOUS. THIS WAS ALSO THE REASON WHY THE DELAY IN FILING TH E APPEALS WAS NOT CONDONED, AS EXPRESSED BY THE BENCH IN OPEN COURT A T THE TIME OF HEARING, BUT THE SAID OBSERVATIONS DO NOT FIND A PLACE IN TH E ORDER PASSED BY THE TRIBUNAL. THE ASSESSEE HAS THEREFORE PRAYED THAT T HE ABOVE OBSERVATIONS OF THE TRIBUNAL MAY ALSO BE RECORDED IN THE ORDER O F THE TRIBUNAL. 10. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE STAND OF ASSESSEE AS CONTAINED IN THE MP. IT WAS SUBMITTED BY THE LEARN ED COUNSEL FOR THE ASSESSEE THAT THE SCOPE OF THE PROCEEDINGS BEFORE T HE AO CONSEQUENT TO THE FIRST SET OF ORDERS DATED 24.3.2014 WAS ONLY WI TH REGARD TO THE CASH DEPOSIT OF RS.77.20 LACS MADE IN THE PREVIOUS YEAR RELEVANT TO AY 2009-10 AND INVESTMENTS OF RS.61.96 LACS IN AY 2010-11. TH E INVESTMENTS OF RS.61.96 LACS MADE IN AY 2010-11 WILL STAND EXPLAIN ED IF THE CASH DEPOSITS IN AY 2009-10 IS EXPLAINED. THUS THE SCOPE OF THE PROCEEDINGS BEFORE THE AO PURSUANT TO THE TWO SET OF ORDERS PASSED U/S.263 OF THE ACT DATED 24.3.2014 WOULD BE ONLY EXPLANATION WITH REGARD TO THE SOURCE OF CASH DEPOSITS OF RS.77.20 LACS MADE IN THE BANK ACCOUNT. IN THE SECOND SET OF ORDERS PASSED U/S.263 OF THE ACT DATED 16.1.2017 TH E DIRECTIONS OF THE CIT MP NO.24 & 25/BANG/2019 PAGE 5 OF 6 IN PARAGRAPH 6 & 8 FOR AY 2009-10 & 2010-11 RESPEC TIVELY, HAVE GONE BEYOND THE SCOPE OF THE PROCEEDINGS BEFORE THE AO P URSUANT TO THE FIRST SET OF ORDERS DATED 24.3.2014, WHICH IS IMPERMISSIBLE I N LAW. 11. THE LD. DR SUBMITTED THAT IT IS TRUE THAT BY RE ASON OF PASSING THE SECOND SET OF ORDER U/S. 263 OF THE ACT DATED 16.01 .2017, THE FIRST SET OF ORDERS U/S. 263 OF THE ACT DATED 24.3.2014 BECOMES INFRUCTUOUS. THE LD. DR, HOWEVER, SUBMITTED THAT FAILURE TO SPECIFY THE SAME IN THE ORDER OF TRIBUNAL IS NOT VERY MATERIAL AND EVEN IF SUCH OBSE RVATIONS ARE NOT MADE, THE FACT WOULD REMAIN THAT THE FIRST SET OF ORDERS U/S. 263 OF THE ACT DATED 24.12.2013 BECOMES INFRUCTUOUS ON PASSING OF THE SE COND SET OF REVISIONARY ORDER U/S. 263 DATED 16.01.2017. 12. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE WHEN THE DELAY IN FILING THE APPEAL IS NOT CONDONED , THERE IS NO NECESSITY OR NEED TO GIVE ANY FINDING ON THE MERITS OF THE APPEA L. THOUGH THERE IS MERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE AS SESSEE REGARDING THE SCOPE OF PROCEEDINGS WHILE PASSING THE SET OF REVIS IONARY ORDERS U/S.263 OF THE ACT DATED 16.1.2017, SINCE THE DELAY IN FILING THE APPEALS WERE NOT CONDONED, THERE WAS NO SCOPE FOR GIVING ANY FINDING S ON SCOPE OF PROCEEDINGS U/S.263 OF THE ACT OR RECORDING ANY OBS ERVATIONS MADE AT THE TIME OF HEARING ON THE FIRST SET OF ORDERS U/S.263 OF THE ACT DATED 24.3.2014. IN OTHER WORDS, THOSE ASPECTS DID NOT REQUIRE ANY C ONSIDERATION. THE SCOPE OF PROCEEDINGS U/S.254(2) OF THE ACT ARE VERY LIMIT ED TO RECTIFYING MISTAKES THAT ARE APPARENT ON THE FACE OF THE RECORD. THERE IS NO SUCH APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL POINTED OUT IN THESE PETITIONS. IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE OR DER OF THE TRIBUNAL DOES NOT SUFFER FROM ANY MISTAKE APPARENT ON THE FACE OF THE RECORD. CONSEQUENTLY, WE DISMISS THE MISCELLANEOUS PETITION S FILED BY THE ASSESSEE. MP NO.24 & 25/BANG/2019 PAGE 6 OF 6 13. IN THE RESULT, BOTH THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF SEPTEMBER, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRE SIDENT BANGALORE, DATED, THE 09 TH SEPTEMBER, 2020. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.