KARNA KAMLA NAGENDRA,NALGONDA vs. INCOME TAX OFFICER, WARD-1, NALGONDA

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ITA 1443/HYD/2019Status: DisposedITAT Hyderabad21 December 2020AY 2014-153 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that both the AO and CIT(A) passed ex-parte orders. In the interest of justice, the Tribunal set aside the appellate orders and remanded the cases back to the AO for fresh assessment, ensuring the assessees are given a fair opportunity of hearing.

What were the facts?

The assessees, partners in a construction firm, were subject to reassessment proceedings after a survey. The Assessing Officer (AO) completed assessments ex-parte based on bank accounts, treating agricultural income as income from 'other sources'. The CIT(A) also dismissed the appeals ex-parte.

What were the issues?

Whether the CIT(A) erred in not providing an opportunity to the assessee and in treating agricultural income as income from 'other sources' under reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad SMC Bench, Hyderabad

Before: Smt. P. Madhavi Devi

For Appellant: Smt. S. Sandhya
Hearing: 21/12/2020Pronounced: 21/12/2020

All These appeals are filed by the respective assessees for the respective A.Ys against the common order of the CIT (A)-3, Hyderabad, dated 18.06.2019 u/s 143(3) r.w.s. 147 of the I.T. Act, 1961. The common grounds of appeal s raised by the respective assessees are given below:

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 Tax (Appeals) ought to have provided opportunity to the appellant before deciding the appeal.

3.

The learned Commissioner of Income Tax (Appeals) erred in holding that the provisions of Sec.14 7 of the I.T. Act are applicable to the facts of the case.

4. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in treating the income from agriculture as the income from "other sources" without considering the fact that the appellant possessed agricultural land and cultivated the said lands.

5.

Any other ground or grounds that may be urged at the time of hearing”.

2.

Brief facts of the case are that the assessees are partners in M/s. Krishna Manasa Constructions, Miryalaguda. A survey operation u/s 133A was carried out on 28.1.2015 in the firm and all the respective assessees filed their returns of income without disclosing full income as per the affidavit filed by the Managing Partner of the firm. Hence a notice u/s 148 was issued on 24.5.2017 calling for certain information. The assessees filed a letter dated 5.3.2018 requesting for time. Thereafter, a letter dated 20.3.2018 along with copy of ITR-V without computation statements were filed and requested to treat the return already filed as the one in response to the 148 notice. Since there was no response from the assessees, AO completed the assessment based on the Bank Accounts provided by the assessees. Aggrieved, assessees preferred appeals before the CIT (A) who dismissed the appeals after condoning the delay of 1 day in filing the appeals before the CIT (A). Aggrieved, the assessees are in appeal before the Tribunal.

3. The learned AR submitted that both the assessment orders as well as the order of the CIT (A) are ex-parte the assessee and is therefore, prayed for an opportunity to present their cases before the AO.

4.

The learned DR is also heard.

5. Having gone through the assessment orders as well as the CIT (A) orders, I find that both the authorities have passed ex- parte orders and the income brought to tax is agricultural income declared by the assessee which is treated as income under the head “other sources”. Therefore, in the interest of justice, all the appellate orders passed by the CIT (A) in respect of all the assessees are set aside to the file of the AO with a direction to re- do the assessments donova in accordance with law. Needless to mention that the respective assessees shall be given fair opportunity of hearing.

6.

In the result, appeals filed by the assessees are treated as allowed for statistical purposes. Order pronounced in the Open Court on 21st December, 2020.

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