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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN
PER S. RIFAUR RAHMAN, A.M.:
This appeal filed by the assessee is directed against the order of CIT(A) – 1, dated 27/12/2018, Hyderabad for AY 2015-16.
Brief facts of the case are, the assessee derives income from interest, filed its return of income for the AY 2015-16 on 23/03/2016 admitting total income of Rs. 15,76,349/- and claimed refund of Rs. 13,580/-. Accordingly, the return was processed u/s 143(1) of the Income-tax Act, 1961 ( in short ‘the Act’) and issued refund as claimed by the assessee. Subsequently, assessee filed revised return of income on 30/04/2016 admitting an income of Rs. 5,75,310/- and claimed refund of Rs. 2,79,160/-. Assessee declared lesser interest income in the revised return of income. The case was selected for scrutiny under CASS and accordingly, notices u/s 143(2) and 142(1) were issued and served on the assessee.
2 ITA No. 254/Hyd/19 Chennuri Venkateswarlu, Hyd. 2.1 Subsequently, a show cause notice was issued on the assessee and the assessee was asked to explain various observations of the AO. In response, assessee furnished a letter along with an affidavit, which is reproduced below:
“Chennuri Venkateshwarlu s/o Chennuri Lachaiah aged about 68 years R/o H. No. 1-4-880/20/152, Flat No.202, IInd Floor, Parishi Residency, New 8akaram. Gandhi Nagar, Hyderabad- 500020, do hereby solemnly affirm and state that; I am a agriculturist, my agricultural land was acquired by the Singareni collieries company Limited and I was received an amount of Rs.31,50,961/- as Interest. The same income was declared under Income from other sources in original IT Return, that was accepted by the department and refund was granted. But unfortunately, TRP was filed the revised return without my knowledge under my PAN. TRP was mentioned my PAN instead of other's PAN. I request your office to cancel the revised return and do the needful in this regard.”
2.2 After considering the information contained in the affidavit, AO completed the assessment u/s 143(3) by making an addition towards interest of Rs. 15,78,085/- (difference of interest declared by the assessee in the return of income and 26AS statement).
Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A), who confirmed the addition made by the AO and dismissed the appeal in-limine as the assessee failed to appear before him, even though, sufficient opportunities provided to assessee.
Aggrieved with the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal: “1. The order of the Hon'ble CIT(A) is erroneous in law as well as facts of the case.
3 ITA No. 254/Hyd/19 Chennuri Venkateswarlu, Hyd. 2. The Hon'ble CIT(A) without allowing proper opportunity to the assessee dismissed the same and therefore the same is liable to be set aside. 3. The Hon'ble CIT(A) having noticed that the interest income of Rs.31,52,697/- "interest on compensation" ought to have directed the assessing officer to allow deduction of 50% of the said amount as laid down u/s.57(iv) of the IT Act. 4. Any other ground will be raised at the time of hearing.” 5. Before us, ld. AR of the assessee submitted facts of the case and referred to the affidavit filed by the assessee before the AO and submitted that the mistake committed by Tax Return Preparer (TRP) i.e. tax return filed by TRP is of some other person, but, by mistake he used the PAN of assessee and filed the same. Further, he submitted that assessee has received interest on compensation from M/s Singareni Collieries Company Ltd., to the extent of Rs. 31,52,697/-. He brought to our notice the original return of income filed by the assessee, in which, assessee has declared the total interest income and claimed deduction u/s 57 i.e. 50% of the gross interest income as deduction and declared balance interest income. This fact was very much before the AO and CIT(A). He prayed that the addition may be deleted.
On the other hand, ld. DR relied on the orders of revenue authorities.
Considered the rival submissions and perused the material on record. Based on the information submitted before us, it is noticed that assessee has in receipt of interest arrears on additional compensation received from M/s Singareni Collieries Ltd. Accordingly, he has declared the same in its original return of income. However, due to some reasons, as mentioned in the affidavit, his TRP has filed revised return of income. As per the affidavit filed by the assessee, his revised return of income was filed without his knowledge. Considering the peculiar facts on record, we are inclined to remit this
4 ITA No. 254/Hyd/19 Chennuri Venkateswarlu, Hyd. issue to the file of AO to verify the claim of assessee with regard to revised return of income and by considering the affidavit, he may verify and decide the matter in accordance with law after providing reasonable opportunity of being heard to the assessee. It is pertinent to mention that in case assessee has received the interest compensation from M/s Singareni Collieries Company Ltd., then deduction u/s 57 should be allowed as per law.
In the result, appeal of the assessee is treated as allowed for statistical purposes. Pronounced in the open Court on 5th July, 2019.
Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 5th July, 2019 kv Copy to:- 1) Shri Chennuri Venkateswarlu, No. 1-4-880/20/152, Plot No. 202, 2nd Floor, New Bakaram, Gandhi Nagar, Hyderabad – 500 0380. 2) ITO, Ward – 4(1), Hyderabad 3) CIT(A) – 1 Hyderabad. 4) Pr. CIT - 1, Hyd. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File