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Facts
The assessee, a non-resident senior citizen, failed to file an income tax return for AY 2019-20. The AO reopened the case and added unexplained investments, interest income, and short-term capital gains totaling Rs.3,33,09,994/-. The CIT(A) partly allowed the appeal.
Held
The Tribunal held that the CIT(A)'s powers are co-terminus with the AO and that the documents/records considered by the CIT(A) were not additional evidence as they were produced before the AO. Therefore, the CIT(A) rightly allowed the appeal partly.
Key Issues
Whether the CIT(A) erred in considering additional evidence filed by the assessee during appellate proceedings without giving the AO an opportunity to examine it.
Sections Cited
147, 148A, 142(1), 69, 144, 156, 144C(1), 46A, 250(4)
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the revenue is directed against the Order of the learned CIT(A)/NFAC vide DIN and Order No. ITBA/ APL/S/250/2024-25/1066960466(1) dated 24.7.2024 for the Assessment Year (in short “AY”) 2019-20 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’).
The revenue has raised following grounds of appeal:
IT(IT)A No.1694/Bang/2024 M/s. Stany Basil Mathias, Karnataka Page 2 of 7
IT(IT)A No.1694/Bang/2024 M/s. Stany Basil Mathias, Karnataka Page 3 of 7 3. Brief facts of the case are that the assessee is a Senior citizen Non-Resident residing in Dubai for close to 30 years. For the past 8 years, the Assessee has been in employment with M/S Daikin Middle East and free Zone (Jebel Ali PO Box 18674, Dubai UAE). The assessee has not filed any return of income for the period under consideration. The case of the assessee was reopened u/s 147 of the Act after following the due procedure as envisaged u/s 148A of the Act. During the course of reassessment proceedings, the AO issued several notices u/s 142(1) and show cause notices, but the assessee remained non-responsive. The assessee had made investments towards Time Deposits made in accounts with in bank of Rs. 38,20,000 and Rs.76,64,482/- and also credits in Bank accounts with bank where in account value or value at the end of the report in period is at Rs. 1,66,900 with Max Life Insurance Company Limited, Rs.5,28,852/- with Birla Suns Life Mutual Fund, Rs.1,59,330/- with HDFC Mutual Fund, Rs. 81,36,846/- with SBI and Rs.1,28,19,592/- with Standard Chartered Bank. As such, the total investments made by the assessee during the year under reference works out to Rs.3,32,96,002/-. In view of the above facts and there being no explanation from the assessee as regards the sources of investments made amounts totaling to Rs.3,32,96,002/- and hence the same amount is added to the total income of the assessee u/s 69 of the Act.
3.1 Further, the assessee has received Interest amounts of Rs.4,242/- from bank. The assessee has not filed the ROI, hence the interest earned remained undisclosed. Accordingly, the same interest income is added to the total income of the assessee. Further the assessee had also earned income amounting to Rs.9,750/- on account of Sale of Securities. The income earned is taxed as Short- Term Capital Gains and added to the total income of the assessee. As per the Assessment Order under Section 147 r.w.s Section 144 dated 27th May 2024, the Assessing Officer (AO) has made the below
IT(IT)A No.1694/Bang/2024 M/s. Stany Basil Mathias, Karnataka Page 4 of 7 mentioned additions and issued a notice of demand under Section 156 of the Act for Rs.5,42,89,053/-.
Sl No Details Of Investment Amount (Rs)
1 Unexplained Investments u/s 69 3,32,96,002/- 4,242/- 2 Income from Other Source Short term Capital Gain on sale of 3 9,750/- Securities TOTAL 3,33,09,994/- 3.2 Aggrieved by the assessment completed u/s 147 r.w.s. 144 of the Act dated 27.5.2024, the Assessee preferred an appeal against all of the additions made above before the ld. CIT(A)/NFAC. The CIT(A) partly allowed the appeal of the assessee by considering the written submission along with the documents/records produced during the appellate proceedings. Aggrieved by the order of ld. CIT(A), the revenue has filed the present appeal before the Tribunal. The assessee had filed paper book comprising 68 pages enclosing therein the documents/records filed before the AO as well as before CIT (A).
3.3 The main contention that is raised by the revenue is whether ld. CIT(A) is justified in partly allowing the appeal of the assessee by considering the additional evidences filed by the assessee during the appellate proceedings that too without allowing any opportunity to the assessing officer.
Before us, ld. D.R. vehemently submitted that ld. CIT(A) erred in considering the additional evidence filed by the assessee without appreciating the fact that AO had not examined such additional evidences. Further, ld. D.R. submitted that these evidences were not filed by the assessee before the AO till the date of passing the draft order u/s 144C(1) of the Act. Lastly, ld. D.R. submitted that the assessee had filed only part details that too after passing the draft
IT(IT)A No.1694/Bang/2024 M/s. Stany Basil Mathias, Karnataka Page 5 of 7 order u/s 144C (1) of the Act and the AO is not empowered to consider the submission filed after passing the draft order.
Ld. A.R. of the assessee on the other hand submitted that the question of additional evidences filed before the ld. CIT(A) as alleged by ld. D.R. does not arise in the present case as all these documents were also produced before the AO before passing the final assessment order. Therefore, it is not a case the documents are not available before the AO and the assessee has filed for the first time before the ld. CIT(A). Lastly the ld. A.R. of the assessee relied upon the order passed by ld. CIT(A) in support of his claim on merits of the case.
We have heard the rival submissions and perused the materials available on record. On going through the order of assessment dated 27/05/2024, we find that the assessment was completed on a total assessed income of Rs.3,33,09,994/- u/s 147 r.w.s. 144 of the Act. Further, on going through the paper book, we find that during the course of assessment proceedings, the assessee has submitted the detailed written submission along with the copy of Axis Bank confirmation, copies of Max Life Policy, copy of Aditya Birla Sunlife statement as well as copy of HDFC Mutual Fund statement on 12.4.2024, apart from assessee’s last submission dated 9.4.2024 by providing all the explanations in connection with the variations proposed in the order u/s 144C (1) of the Act. We also take a note of the fact that ld. CIT(A) after considering the documents/records submitted during the appellate proceedings, has partly allowed the appeal of the assessee. We are of the considered opinion that the power of the CIT(A) are co-terminus with that of the AO i.e. he can do all that the AO could do. We found the order of ld. CIT(A) to be reasonable and logical on the given state of facts and the grounds raised by the assessee on merits of the case by considering the documents/records produced by the assessee.
IT(IT)A No.1694/Bang/2024 M/s. Stany Basil Mathias, Karnataka Page 6 of 7 6.1 Hon’ble Madras High Court in the case of Arul Murugan and Co. (1982) 51 STC 381 has observed as follows:’
“In a tax appeal, the appellate authority is very much committed to the assessment. The appellate authority can itself enter the arena of assessment, either by pursuing further investigation or causing further investigation to be done. It can do so on its own initiative, without being prodded by any of the parties. It can enhance the assessment, taking advantage of the opportunity afforded by the tax payer’s appeal, even though appeal itself has been mooted only with a view to a reduction in the assessment. These are special and exceptional attributes of the jurisdiction of a tax appellate authority. These attributes undeline the truth that the appellate authority is no different, functionally and substantially, from the assessing authority itself.”
6.2 Therefore We are of the considered opinion that legislature has conferred very wide powers upon the appellate commissioner once an appeal is preferred to him by the assessee. An appeal is only a rehearing or a retrial. In the absence of any statutory inhibitions or restrictions, the ld. CIT(A) has precisely the same powers, exercisable or in the same manner and to the same extent, as the AO has, in the first instance. Further, u/s 250(4) of the Act, before disposing of any appeal, the ld. CIT(A) is competent to make such further inquiry as he thinks fit or he may direct the AO to make further inquiries and report the result of the same to the Joint Commissioner (A) or the Commissioner (A).
6.3 We are of the opinion that as the assessee had produced all the evidences/documents/records before the AO on or before the completion of assessment, the same evidences/documents/records cannot be treated as an additional evidence filed before the ld. CIT(A) as these are not filed for the first time before the ld. CIT(A). In our view, the ld. CIT(A) has rightly passed an order by stating the points for determination and the reason for decision by taking into consideration the documents/records/evidences produced by the IT(IT)A No.1694/Bang/2024 M/s. Stany Basil Mathias, Karnataka Page 7 of 7 assessee. We do not find any merits in the grounds raised by the Revenue.
In the result, appeal filed by the revenue is dismissed.
Order pronounced in the open court on 24th Feb, 2025