SULTANA RAFAT, ,KARIMNAGAR vs INCOME TAX OFFICER, WARD-1, KARIMNAGAR, KARIMNAGAR

Income Tax Appellate Tribunal, HYDERABAD BENCHES “A”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

PER S. RIFAUR RAHMAN, A.M. :

These appeals are filed by two assessees against the order of the Commissioner of Income Tax (Appeals)-2, Hyderabad. Since the facts and issues involved in all these appeals are common and identical, all these appeals are heard together and disposed by way of this common order. For the sake of convenience, the facts relating to ITA No. 1562/Hyd/2017 are discussed hereunder:

:- 2 -: ITA Nos. 1562, 1563 & 1564/Hyd/2017

Brief facts of the case are that assessee, an individual, deriving income from tailoring has filed her return of income for the AY. 2013-14 declaring the taxable income at Rs. 2,05,000/-. Assessee attached Balance Sheet along with return of income as per which liabilities were disclosed at Rs. 20,77,913/-, whereas the assets were declared at Rs. 6,92,600/-. Because of the above discrepancy, a notice u/s. 148 of the Income Tax Act [Act] was issued and served on the assessee on 18-08-2014. The assessment was completed u/s. 143(3) r.w.s. 147 of the Act by making addition of unexplained cash credit to the extent of Rs. 8 Lakhs.

2.1. Aggrieved with the above order, assessee preferred an appeal before the CIT(A). The Ld.CIT(A) dismissed the appeal of the assessee due to non-appearance and non-prosecuting of the appeal. However, Ld.CIT(A) also disposed of the appeal on merits without any assistance from the assessee.

2.2. Aggrieved with the above order, assessee preferred an appeal before us, raising the following Grounds of Appeal:

The learned Commissioner of Income Tax (Appeals) is erroneous, illegal, and held contrary to the facts of the instant case. 2. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the assessing officer without giving any further opportunity. 3. The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in determining the total income at Rs. 10,05,000 as against the Rs. 2,05,000/- without giving any further opportunity.

:- 3 -: ITA Nos. 1562, 1563 & 1564/Hyd/2017

The learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the assessing officer in treating the entire cash deposits of Rs. 8,00,000/- made in bank account of the appellant. 5. The learned Commissioner of Income Tax (Appeals) ought to have estimated the income on the basis of turnover/gross receipts. 6. The learned Commissioner of Income Tax (Appeals) ought to have considered the facts of the case. 7. Any other grounds/ground may be urged at the time of hearing”.

2.3. Further, assessee filed additional Grounds of Appeal with the prayer to admit the same before us, which are as follows:

Additional Grounds of Appeal: (1) The reassessment orders do not specify the approval taken Under Section 151 for issuing notice U/s 148. Tribunal is prayed to set aside the notice issued for reassessment.

(2) The notice U/s 148 is issued before expiry of period for issuing notice U/s 143(2). The assessment is open before Assessing authority till the completion of period specified in Section 143(2). Notice for Reassessment before expiry of the period specified in Sec 143(2) is bad in law. Tribunal prayed to set aside the notice and dispose the appeal.

(3) The notice for reassessment Under Section 148 is served on 18.8.2014. Orders might have been passed on or before 31.12.2015 as per Section 153(2). The orders are passed on 30.3.2016 beyond time limit specified in Section 153(2). The orders passed are barred by limitation specified in Section 153(2) and liable to be quashed”.

Before us, Ld.AR heavily stressed the additional grounds of appeal, which was not raised before the Ld.CIT(A) to submit that the assessment for the year under consideration was re-opened by the Assessing Officer by issuance of notice u/s. 148, even though there is enough time to issue notice u/s. 143(2), notice u/s. 148 cannot be issued. He relied on the following case law:

:- 4 -: ITA Nos. 1562, 1563 & 1564/Hyd/2017

i. Hon'ble Supreme Court in the case of Harbanslal Malhotra & Sons Pvt. Ltd., in Civil Appeal No. 3337 of 2007; ii. Hon'ble Bombay High Court in the case of CIT Vs. Bhaichand H. Gandhi [141 ITR 67]; iii. ITAT, Nagpur in the case of Shri Siddique Zikar Ghaniwala Vs. DCIT – and others in ITA No. 156/Nag/2016 and others; iv. Standard Procedure for applying provisions of Section 68 of the Income Tax Act, 1961 specified by CBDT vide No. 246/151/2017-A&PAC-1; v. ITAT, Hyderabad in the case of Mr. Nitin Kumar Shah, Vs. ACIT in ITA No. 1489/Hyd/2012. Dt. 11-10-2013; vi. CIT Vs. Qatalys Software Technologies Limited [308 ITR 249]; vii. Trustees of H.E.H. The Nizam’s Supplemental Family Trust Vs. CIT [244 ITR 381];

Ld.DR, on the other hand, relied on the order of Ld.CIT(A) and further submitted a copy of the order sheet to highlight that Assessing Officer has reason to believe the escapement of income. Further, he relied on the case of Purviben Snehalbhai Panchhigar Vs. ACIT [409 ITR 124] (Guj) on the issue of addition made by the Assessing Officer.

Considered the rival submissions and perused the material on record. Before us, assessee filed additional grounds of appeal, stressing the legal point that Assessing Officer cannot issue 148 notice when there is a time to issue 143(2) notice supported with

:- 5 -: ITA Nos. 1562, 1563 & 1564/Hyd/2017

the case law. In support of the above submissions, Ld.AR has not made any submissions on merits of the case, it is noted that assessee has not made any submissions before the Ld.CIT(A) nor made efforts to prosecute before the Ld.CIT(A). Ld.CIT(A) has dismissed the appeal in limine and dealt with the same on merits without any assistance from the assessee. Since the legal issue was raised before us, which was not raised before Ld.CIT(A), therefore, we admit the additional grounds of appeal raised by the assessee and deem it fit to remit this issue to the file of Ld.CIT(A) to deal with the same afresh. We would like to record that various judicial pronouncements held this issue against the Revenue while assessment proceedings remain inchoate. No fresh evidence or material could possibly be un-earthed. If any such material or evidence is available, there would be no restrictions or constraints on its being taken into consideration by the Assessing Officer for framing the current assessment. If the assessment is not framed before the expiry of the period of limitation for a particular assessment year, it would be assumed that since proceedings had not been opened u/s. 143(2), the return had been accepted as correct. It may be argued that thereafter, recourse could be taken to Section 147, provided, fresh material had been received by the Assessing Officer after the expiry of limitation fixed for framing the original assessment. Therefore, we direct the CIT(A) to adjudicate this issue, considering the legal aspects, after giving proper opportunity of being heard to the assessee. Therefore, the additional grounds raised by the assessee are allowed for statistical purposes.

:- 6 -: ITA Nos. 1562, 1563 & 1564/Hyd/2017

ITA No. 1564/Hyd/2017: 6. Since the issue raised in this appeal is similar to the one, which is discussed in the appeal in ITA No. 1562/Hyd/2017 herein, on the same lines, we direct CIT(A) to adjudicate this issue afresh, considering the legal aspects, after giving proper opportunity of being heard to the assessee. Therefore, the grounds raised by the assessee in this appeal are allowed for statistical purposes.

ITA No. 1563/Hyd/2017: 7. Further, we notice that in this appeal there is no issue of legal ground on issuance of notice u/s. 148 of the Act. But the appeal was dismissed by the Ld.CIT(A) for non-prosecution.

7.1. Since the issues are common in the all the above three appeals, we deem it fit and proper to remit the same to the file of CIT(A) to adjudicate afresh in line with the above two appeals, after giving proper opportunity of being heard to the assessee. Therefore, the grounds raised by the assessee in this appeal are allowed for statistical purposes.

To sum-up all the three appeals are allowed for statistical purposes.

Order pronounced in the open court on 27th March, 2019

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 27th March, 2019 TNMM

:- 7 -: ITA Nos. 1562, 1563 & 1564/Hyd/2017

Copy to : 1. Smt. Rafat Sultana, H.No. 1-5-503, Ameer Nagar, Karimnagar.

Shaik Abdul Aziz, H.No. 1-5-503, Ameer Nagar, Karimnagar.

The Income Tax Officer, Ward-1, Karimnagar.

The CIT(Appeals)-2, Hyderabad

The Pr.CIT-2, Hyderabad

D.R. ITAT, Hyderabad.

Guard File.

SULTANA RAFAT, ,KARIMNAGAR vs. INCOME TAX OFFICER, WARD-1, KARIMNAGAR, KARIMNAGAR