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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH
This assessee’s appeal, for the assessment year 2017- 2018, arise against the order of the learned CIT(A)-National Faceless Appeal Centre [in short the “NFAC”], Delhi, Delhi’s DIN & Order no.ITBA/NFAC/S/250/2023-24/1056047835(1), dated 13.09.2023, in proceedings u/sec.144 of the Income Tax Act, 1961 (in short the "Act").
2 ITA.No.775/COCH./2023 Case called twice. None appears at assessee’s behest. She is accordingly proceeded ex-parte.
Delay of 04 days is condoned by considering the assessee’s condonation petitions explaining the delay(s) as well as going by the decision in the case of Collector Land Acquisition vs. Mst. Katiji & Ors(1987) 167 ITR 471 (SC) settling the issue long back that that all such technical aspects must make way for the cause of substantial justice the delay is condoned and the appeals are admitted for adjudication.
Coming to the Revenue’s sole substantive ground seeking to revive sec.69 addition of Rs.68 lakhs made in the course of assessment herein dated 31.12.2019; learned DR invited our attention to the learned CIT(A)’s impugned lower appellate discussion to this effect reading as under ;
“7. During the course of appellate proceedings, the appellant has taken the plea that the conditions specified in section 69 of the Act for considering the deposit of Rs.68,00,000/- as unexplained investment has not been established by the Assessing Officer. The investment does not satisfy any of the conditions specified in section 69 of the Act. From the assessment order, it is seen that in the entire order, the AO has made
3 ITA.No.775/COCH./2023 discussion on cash deposits in the bank account, however, in the conclusion the AO made the addition of Rs.68,00,000/- u/s 69 of the Act as unexplained investment. The provisions of section 69 clearly deals with unexplained investment whereas section 69A deals with unexplained money. Thus, the AO failed to apply the provisions of section while concluding the assessment. He should have made additions u/s 69A instead of section 69 of the Act. The AO has entirely erred in applying the appropriate provisions of law. It would be worth mentioning here that while considering the scope and powers of the appellate authority under the Income tax Act, 1961, courts have consistently held that the power of the first Appellate Authority are coterminous with that of the Assessing Officer and that the Appellate Authority can do what the Assessing Officer of to have done and also direct the latter to do what he has failed. However, as per section 251(1)(a) of the Act, in appeal against an order of assessment, the CIT(A) may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that CIT(A) could change the provision of law qua the item of which assessment was made. Such change of section from 69 to 69A cannot be made by the CIT(A) as he is not empowered to do so which has been explained by the Hon'ble ITAT, Chennai in the case of Smt. Sekar Jayalakshmi Vs. ITO
4 ITA.No.775/COCH./2023 [20231 150 taxmann.com 120 (Chennai-Trib.), wherein it has been held as under :
“7. Both the sides have beer per perused the materials available on record and gone through the orders of authorities below including paper book filed by the assessee. In this case, the Assessing Officer made addition of Rs.6,00,000/- as unexplained credit. However, the Assessing Officer has not mentioned the relevant section under which, the addition was made, but "unexplained credit" comes under section 68 of the Act. In the appellate order, in page No. 7, para (v). the Id. CIT(A) has noted that "However, I am also in agreement with the appellant that the provisions of section 68 are not applicable to the appellant". Therefore, the Id. CIT(A) treated the addition of Rs.6,00,000/- as unexplained money under section 69A of the Act and confirmed the addition. Section 68 of the Act deals with "unexplained Credit" in the books of the assessee and section 69A of the Act deals with "unexplained money, bullion, jewellery or other valuable article". Both are entirely different. Though the Assessing Officer has not mentioned the section 68 of the Act in his order, the very fact that he calls it "unexplained credit" and not "unexplained money" as 5 ITA.No.775/COCH./2023 done by the Id. CIT(A), while he invoked section 69A of the Act, it proves that the Assessing Officer invoked section 68 of the Act. I find merit into the contention of the Id. Counsel for the assessee that there is no power conferred upon the Id. CIT(A) to assess a particular item under different provision of the Act what the Assessing Officer had done without giving a specific notice to the assessee regarding such action. I am of the considered view that law does not permit for such change of provision of law. As per section 250 of the Act, the Id. CIT(A) is empowered to make further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report to the Id. CIT(A). As per section 251(1)(a) of the Act, in appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that Id. CIT(A) could change the provision of law qua the item of which assessment was made. Therefore, in the absence of such power, learned CIT(Appeals) could not have treated the addition made under section 69A of the Act. Therefore, the addition made by the Id. CIT(A) under section 69A of the Act is liable to be deleted.”
6 ITA.No.775/COCH./2023 In view of the facts of the case, the action of the AO in taxing unexplained cash deposits u/s 69 as unexplained investments instead of section 69A cannot be upheld. Accordingly, the appeal is allowed.”
Suffice to say, it has already come on record that the learned CIT(A) has followed tribunal’s order (supra) whilst deciding the foregoing legal issue in assessee’s favour and against the department. We thus find no merit in the Revenue’s sole substantive ground. This Revenue’s appeal is dismissed in very terms.
This Revenue’s appeal is dismissed in above terms.
Order pronounced in the open Court on 22.08.2024.