RAKESH SATYANARAYANA AGARWAL,HYDERABAD. V. ITO., WARD-3(1), HYDERABAD

ITA 450/HYD/2024

AI Insights

The case involves Rakesh Satyanarayana Agarwal, the appellant, who contested the order of the Principal Commissioner of Income Tax, Hyderabad-1, regarding the assessment year 2017-18. Initially, Agarwal declared an income of Rs. 7,86,310 in his tax return, which was later reassessed to Rs. 44,77,330 following a reopening under section 147 of the Income Tax Act. The Principal Commissioner, upon finding unexplained cash deposits of Rs. 24,02,500 in Agarwal's bank account, directed the Assessing Officer to treat these as unexplained under section 69A and add them to the income assessed. The appellant argued that the Principal Commissioner did not direct any verification or provide an opportunity of hearing before this addition was made. However, the Tribunal dismissed the appeal, supporting the Principal Commissioner's order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 28628 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 23-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 25-04-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SATYANARA YAN TOS HNIWAL
• Keywords: Opportunity of being heard; Transfer pricing; Revision of order
• Section: 263; 92CA

Judgement Text

" आआआआ आआआआआआ आआआआआआ, आआआआआआआआ आआआ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad BEFORE SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.आआआ.आआ /ITA No.450/Hyd/2024 (आआआआआआआआ आआआआ/Assessment Year:2017-18) Rakesh Satyanarayana Agarwal, Hyderabad. PAN:ABGPA8811J Vs. Income Tax Officer, Ward-3(1), Hyderabad. (Appellant) (Respondent) आआआआआआआआआआ आआआआआआ/Assessee by: Shri Satyanarayan Toshniwal, Advocate आआआआआआ आआआआआआ/Revenue by:: Smt. M. Narmada, CIT-DR आआआआआआ आआ आआआआआ/Date of hearing: 23/10/2024 आआआआआ आआ आआआआआ/Pronouncement: 04/11/2024 आआआआ/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Rakesh Satyanarayana Agarwal, Hyderabad (“the assessee”), feeling aggrieved by the order passed by the Learned Principal Commissioner of Income Tax, Hyderabad-1 (“Ld. PCIT”), dated 29.02.2024 for the AY 2017-18. 2. The brief facts of the case are that the assessee filed his return of income on 29.03.2018 declaring a total income of Rs.7,86,310/-. Subsequently, the case of the assessee was reopened u/s.147 of the Income Tax Act, 1961 (“the Act”) and notice u/s.148 of the Act was issued on 31.3.2021. Finally the ITA No.450/Hyd/2024 2 Learned Assessing Officer (“Ld. AO”) completed the assessment u/s.147 r.w.s. 144 r.w.s. 144B of the Act on 29.03.2022 determining the total income of the assessee at Rs.44,77,330. Later on, the case of the assessee was taken up by Ld. PCIT for revision u/s.263 of the Act. During the proceedings u/s.263 of the Act, the Ld. PCIT came to the conclusion that the assessee could not explain the sources of cash deposited in his bank account of Rs.24,02,500/-. Therefore the Ld. PCIT issued a direction to the Ld. AO to pass suitable order disallowing the cash deposit of Rs.24,02,500/- treating the same as unexplained cash deposit u/s.69A of the Act. 3. Aggrieved by the order of Ld. PCIT, the assessee is in appeal before us. The solitary issue of the assessee before us was that the Ld. PCIT directed the Ld. AO for making addition of Rs.24,02,500/- u/s.69A of the Act without making any direction to conduct any enquiry by the Ld. AO or affording any opportunity of hearing by Ld. AO to the assessee. 4. The Ld. AR submitted that the Ld. PCIT should have also made a direction to the Ld. AO to verify from the assessee regarding the sources of cash deposit in the bank account and after verifying the Ld. AO should have made any addition as per ITA No.450/Hyd/2024 3 law. The Ld. AR also submitted that the Ld. PCIT also had not given any direction regarding providing any opportunity of hearing by the Ld. AO to the assessee. Therefore, the Ld. AR submitted that the order of Ld. PCIT is bad in law because the Ld. PCIT straightaway directed the Ld. AO to make the addition. 5. Per contra, the Ld. DR relied on the order of Ld. PCIT and requested the bench to uphold the order of Ld. PCIT. 6. We have heard the rival contentions and also gone through the record in the light of the submissions made on either side. There is no case of the assessee before us that no opportunity of hearing was given to the assessee by Ld. PCIT. The solitary objection of the assessee is that, no direction was given by the Ld. PCIT to the Ld. AO to make any verification or to provide any opportunity of being heard to the assessee by the Ld. AO. For the sake of clarity, the relevant portion of section 263 is extracted as under : “ Revision of orders prejudicial to revenue. 263. (1) The Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer 81a[or the Transfer Pricing Officer, as the case may be,] is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an ITA No.450/Hyd/2024 4 opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, 81b[including,— (i) an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (iii) an order cancelling the order under section 92CA and directing a fresh order under the said section.]” From the perusal of the provisions contained in section 263(1)(i) of the Act, it is abundantly clear that the Ld. PCIT can pass an order to enhance the order of Ld. AO. In the case of the assessee also, the Ld. PCIT has directed the Ld. AO to pass suitable order disallowing the cash deposits of Rs.24,02,500/- treating the same as unexplained cash deposit u/s.69A of the Act and add to the income assessed u/s.147 r.w.s. 144 r.w.s.144B on 29.03.2022 and brought to tax u/s.115BBE of the Act. Therefore the Ld. PCIT has passed an order to make enhancement to the order passed by the Ld. AO. As held above, the Ld. PCIT has power under the statute to make enhancement to the order passed by the Ld. AO. Hence we do not find any irregularity in the order passed by the Ld. PCIT. Accordingly, we dismiss the appeal of the assessee. 7. In the result, the appeal filed by the assessee is dismissed. ITA No.450/Hyd/2024 5 Order pronounced in the open Court on 4th Nov., 2024. Sd/- Sd/- (K. NARASIMHA CHARY) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 04.11.2024. * Reddy gp Copy of the Order forwarded to : 1. Rakesh Satyanarayana Agarwal, C/o Katrapati & Associates, 1-1-298/2/B/3, Sowbhagya Avenue Apartments,1st Floor, Street No.1, Ashok Nagar, Hyderabad-500 020 2. ITO, Ward 3(1), Hyderabad. 3. Pr.CIT-1, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "