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Income Tax Appellate Tribunal, SMC-“B ” BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI
This appeal by the assessee is directed against the order dated 29.093.2018 of the CIT(Appeals), Gulbarga relating to assessment year 2014-15.
There is a delay of 158 days in filing this appeal before the Tribunal. The assessee has filed condonation petition accompanied by an Affidavit stating that the order of CIT(A) was communicated to the assessee’s earlier counsel who appeared before the CIT(A). Though he received the CIT(A)’S order, but he has not guide the assessee properly on the next course of action. Further, the assessee was suffering from ill-health caused by hyper-tension, Diabetes & Backpain and was advised rest. More so, the assessee is having physical disability and also residing far from Bangalore at Bidar. Later, the assessee approached the present counsel, Mr. V. Srinivasan, and immediately thereafter within reasonable time the present counsel filed the appeal and thus there was a delay of 158 days in fling the appeal. These are the circumstances for the delay in filing the appeal before the Tribunal and the ld. counsel for the assessee prayed to condone the delay and admit the appeal, otherwise it would cause unbearable loss to the assessee.
The ld. DR strongly opposed to condonation of delay in filing the appeal before the Tribunal.
I have heard the parties and perused the record. Admittedly, the assessee is suffering from physical disability certified by the Directorate for Empowerment of Differently Abled & Senior Citizens, Bangalore. The assessee in the affidavit has stated that he has handed over the papers to earlier counsel who appeared before the CIT(Appeals), who failed to take proper action to file necessary appeal before the Tribunal. Later, he approached the present counsel, Mr. V. Srinivasan, who has filed the appeal within 48 hours before this Tribunal. In my opinion, there exists sufficient reason in filing the appeal belatedly before this Tribunal. Relying on the Hon’ble Supreme Court judgment in the case of Collector, Land Acquisition v. MST. Katiji & Ors., 167 ITR 471 (SC), I am inclined to condone the delay and admit the appeal for adjudication.
At the time of hearing, grounds No.2 to 4 were not pressed.
The grounds for consideration is with regard to addition of Rs.12,91,700 sustained u/s. 69A of the Income-tax Act, 1961 [the Act] by the ld. CIT(Appeals) as against under the provisions of section 68 made by the AO. In this case, the assessee has deposited Rs.12,91,700 into 3 bank accounts held by him and he has not offered satisfactory explanation before the AO and the same was added u/s. 68 of the Act.
Before the CIT(Appeals), the assessee’s explanation was that deposits into bank accounts cannot be considered u/s. 68 of the Act since bank accounts are not books of account maintained by the assessee. The CIT(Appeals) agreed with the contention of the assessee and deleted the addition made u/s. 68 of the Act, However, he sustained the addition u/s. 69A of the Act.
Now the contention of the ld. AR for the assessee before me is that the deposits were made into bank accounts of assessee from earlier withdrawals and the sources were explained and addition u/s. 69A of the Act cannot be made, without giving mandatory notice u/s. 251(2) of the Act which amounts to enhancement of assessment. He relied on the decision of this Bench of the Tribunal in the case of Sri Girish V. Yalakkishettar v. ITO, & 355/Bang/2019, order dated 27.01.2020.
On the other hand, the ld. DR submitted that original addition was made by the AO u/s. 68 of the Act. Later on appeal, the CIT(Appeals) deleted the addition u/s. 68 of the Act, however, it was sustained u/s. 69A of the Act. According to the ld. DR, there was no enhancement of income, as such there was no question of any notice u/s. 251(2) of the Act. Had it been any enhancement, the CIT(Appeals) would have given the enhancement notice. According to the ld. DR, the CIT(Appeals) had not discovered anything new, except that he agreed with the contention of assessee that addition could not be made u/s. 68 of the Act and he made the addition u/s. 69A of the Act, after deleting the addition made by the AO u/s. 68 of the Act. Thus there was no enhancement and addition was restricted to the source of income already discovered by the AO. On such action of the CITA, there is no restriction imposed by section 251(2) of the Act. For this purpose, he relied on the judgment of the Chandigarh Bench of the Tribunal in dated 10.09.2014 in the case of Anup Sharma. He also further relied on the order of Bangalore Bench of the Tribunal in the case of P.V. Ajay Narayan v. ITO dated 31.03.1996 and submitted that misquoting of the section is not fatal and addition can be upheld under another section of the Act.
Now the question before me is whether the CIT(Appeals) was justified in sustaining addition u/s. 69A after deleting it u/s. 68 of the Act. This issue was considered by this Tribunal in the case of Sri Girish V. Yalakkishettar (supra) and relied on the judgment of Hon’ble Allahabad High Court in the case of Smt. Sarika Jain v. CIT, 407 ITR 254 (All), wherein it was held that use of the word “thereon” is important and it reflects that the Tribunal has to confine itself to the questions which arise or are subject matter in the appeal and it cannot be travelled beyond that. The power to pass such order as the Tribunal thinks fit can be exercised only in relation to the matter that arises in the appeal and it is not open to the Tribunal to adjudicate any other question or an issue, which is not in dispute and which is not the subject matter of the dispute in appeal. Accordingly, when the amounts could not have been added under section 68, the Tribunal was not competent to make the addition under section 69A. That being so, when the Tribunal has no power to sustain addition u/s. 69A of the Act, after deleting it u/s. 68, the same is equally applicable to CIT(Appeals) also. He cannot sustain addition u/s. 69A after deleting it u/s. 68 of the Act. It is to be noted that the orders relied on by the ld. DR in the case of Anup Sharma and P.V. Ajay Narayan (supra) have no occasion to consider judgment of Hon’ble Allahabad High Court cited supra which was delivered on 18.07.2017. In my opinion, the Hon’ble Allahabad High Court judgment (supra) will prevail over the orders of the Tribunal cited by the ld. DR. Therefore, I have not considered the orders of Tribunal relied on by the ld. DR. In light of the above, the addition sustained by the CIT(Appeals) u/s. 69A of the Act is deleted.
In the result, the appeal by the assessee is allowed.
Pronounced in the open court on this 11th day of September, 2020.