ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD vs. GREEN PARK HOTELS AND RESORTS LIMITED, HYDRABAD

Revenue filed an affidavit for condonation of delay and submitted that the records were not readily available with the office, and it took time to retrieve the records as most of the officials were on election duties. Revenue further submitted that the delay in filing the appeal was neither intentional nor deliberate, therefore, pleaded to condone the delay and admit the appeal for hearing. We have gone through the affidavit filed by the Revenue and find that there is reasonable cause for filing the appeal belatedly, hence, we condone the delay and admit the appeal for hearing.

Brief facts of the case are that the assessee company had purchased immovable property at Kasaba Hobli, Bangalore, registered on 28.05.2018 for a consideration of Rs.32,46,00,612/- in the financial year 2018-19, relevant to the assessment year 2019-20 and at Begumpet, Hyderabad for a consideration of Rs.9,68,064/- both for its own office and two motor vehicles for Rs.20,25,049/- and Rs.5,25,000/- respectively. Assessment in the case of the assessee was completed u/s 143(3) read with section 144B of the Act, assessing the total income of the assessee at Rs.60,00,62,265/-, by making addition of Rs.32,81,18,725/- as unexplained investment under section 69 of the Income tax Act, 1961 (“the Act”).

Against the order passed by the learned Assessing Officer, assessee preferred appeal before the CIT(A) and the learned CIT(A) granted relief to the assessee by deleting the addition of Rs.32,81,18,725/- made by the learned Assessing Officer and passed order on merits of the case. Challenging the order of the learned CIT(A), Revenue filed an appeal before us and contended that the assessee did not produce any evidence during the course of proceedings before the learned Assessing Officer in support of its claim.

Per contra, learned AR contended that the assessee company had purchased immovable property at Kasaba Hobly, Bengaluru for a consideration of Rs.32,46,00,612/- during the F.Y.2018-19, relevant to assessment year 2019-20 by taking loan of Rs.30,00,00,000/- from Kotak Mahindra Bank and hence the addition made in the assessment year 2020- 21 is grossly incorrect. Assessee company had also at acquired immovable property at Begumpet, Hyderabad for a consideration of Rs.9,68,064/-, which was properly accounted for and shown in the fixed assets schedule of the assessee company and hence the addition made by the learned Assessing Officer is unwarranted. Assessee company had also purchased two motor vehicles for Rs.20,25,049/- and Rs.5,25,000/- and the acquisition was done through banking channels and hence properly explained.

Learned Ld.AR further submitted that the assessee company could not comply promptly to the notices under section 142(1) of the Act as the faceless assessment regime during the year under consideration was in its nascent stages of implementation and therefore failure on the part of the assessee was unintentional. The learned CIT(A) adjudicated the appeal of the assessee on merits and passed order dated 26/03/2024 granting relief to the assessee company and therefore, pleaded to uphold the same and dismiss the appeal of the Revenue.

He further submitted that due to certain technical problems, the assessee could not locate the show cause notice dated 23/03/2022 and the assessee raised grievance in this respect before the authorities. According to him all the material was submitted before the learned CIT(A) along with submissions and the same now are submitted by way of paper book before the Tribunal. He submitted that if for any reason, the Bench reaches a conclusion that the learned CIT(A) did not consider the material submitted by the assessee while passing the impugned order, the matter may be restored to the file of the learned Assessing Officer to consider all the material placed by the assessee on record and take a view according to law.

We have heard the rival contentions in the light of submissions made on either side. It is undisputed fact that the assessee had acquired immovable property at Bengaluru and Hyderabad and also acquired two motor vehicles for a total consideration of Rs.32,81,18,725/-. As evident from records, learned CIT(A) passed order on merits without obtaining remand report from the learned Assessing Officer as the assessee could not furnish details before the learned Assessing Officer and properly explain its sources for investment in the immovable property and acquisition of two motor vehicles due to the reasons beyond the control of the assessee. In this set of circumstances, we are of the considered opinion that an opportunity must be granted to the learned Assessing Officer to verify the material furnished by the assessee and to form an opinion and offer remarks. We find justification in the grievance of the Revenue.

With this view of the matter, we set aside the impugned order and restore the issue to the file of the learned Assessing Officer to decide the issue afresh. We direct the assessee to co-operate with the learned Assessing Officer in getting the matter disposed of on merits, without seeking any adjournments and the learned Assessing Officer to take a fresh look at the matter, after affording a reasonable opportunity of being heard to the assessee. Grounds are accordingly treated as allowed for statistical purposes.