SREENATH KONNIPATI,HYDERABAD vs. INCOME TAX OFFICER, WARD-7(1), HYDERABAD

Brief facts of the case are, based on the information that the assessee made cash deposits to the tune of Rs. 65,76,261/- with the ICICI Bank, Habsiguda Branch, Hyderabad and there were no sources for deposit such huge amounts as per the return of income, the AO issued notice u/s 148 of the Income-tax Act, 1961 ( in short ‘the Act’) to the assessee on 31/03/2016 with prior approval of the Pr. CIT – 3, Hyderabad. Since the assessee has not complied with the statutory notices issued and failed to explain the source for cash deposits in ICICI Bank, the AO treated the total deposits of Rs. 65,76,261/- made by the assessee in ICICI Bank, as unexplained investment u/s 69 of the Act and made the addition of the same.

Aggrieved with the order of CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: 1. That under the facts and circumstances of the case the order passed u/s 143(3) r.w.s. 147 of the 1.T Act is contrary to the facts of the case and provisions of law. 2. The learned CIT(A) failed to appreciate that since the assessee was not served with proper notice in the way and under the procedure laid down in sect. 282 of income tax act, therefore, assessee could not present himself before assessing officer to present his case. 3. The learned CIT(A) ought to have held that there was no valid service of notice issued U/S. 148 of the 1.T.Act ,therefore, the subsequent proceedings and the order passed U/S. 144 LW.S. 147 of the I.T. Act is to be quashed. 4. The learned CIT (A) ought to have given an opportunity to the assessee to defend his case by calling a remand report from the AO with regards to the merits of the case presented by him before the learned CIT (A). 5. The learned CIT (A) failed to consider the submissions made on the merits of the case, instead, without discussion, summarily dismissed the ground in a causal manner. 6. For these and other reasons that are to be urged at the time of hearing of the case it is prayed that the orders passed by the learned CIT (A) may be set aside in the interest of justice.”

Before us, the ld. AR of the assessee filed the following documents, which are part of paper book filed and submitted that at Sl. Nos. 1 & 2 were filed before the AO and rest of the documents from Sl. No. 3 to 8 were filed before the CIT(A): Sl.No. Description of documents Pages 1 Copy of return of income for AY 2009-10 filed on 1-2 22/01/2010 along with computation of income 2 ICICI Bank statement from 01/04/2008 to 3-42 31/03/2009 3 Copy of Profit and Loss A/c in shares in the 43 books of Sharekhan ltd.

Ld. DR, on the other hand relied on the orders of revenue authorities.

Considered the rival submissions and perused the material on record. The grievance of the ld. AR of the assessee is that the CIT(A) without appreciating or examining the documents filed before him in the proper perspective, upheld the action of the AO. According to ld. AR, the CIT(A) ought to have remitted the matter back to the AO or ought to have called for a remand report from AO. Therefore, considering the totality of the facts and circumstances of the case, to meet the ends of justice, we set aside the order of CIT(A) and remit the issue back to the file of the AO with a direction to re-do the assessment de-novo after examining the documents as per law after providing reasonable opportunity of being heard to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes. Pronounced in the open Court on 3rd October, 2018.