VANISRI MUKTA,HYDERABAD vs. INCOME TAX OFFICER, WARD-9(1), HYDERABAD

In this case, the learned Assessing Officer in paragraph No.4 and 6 of the assessment order dated 30/03/2022 mentioned as under : “4. Further, the assessee has submitted that she has purchased immovable property for a total consideration of Rs.2,38,50,150/- and her share in the immovable property is 50% which comes to Rs.1,19,25,075/-. The assessee has submitted copy of sale deed in support of her claim. Since the assessee has not filed her return of income in response to notice u/s 148 of the Income tax Act, 1961 so the total amount of Rs.1,19,25,075/- is treated as unexplained on account of failure on the part of the assessee. Also the assessee has also furnished source of investment in purchase of immovable property of Rs.1,19,25,075/-. 6. Keeping in view of the facts & circumstances of the case, it is seen that assessee has failed to file return of income in response to notice issued u/s 148 of the Act and also failed to furnish full information regarding the source of investment of Rs.1,19,25,075/-. Hence, the amount of Rs.1,19,25,075/- is treated as unexplained on account of failure on the part of the assessee for the year under consideration and the same is treated as unexplained investment u/s 69 of the I.T.Act, 1961. Accordingly, amount of Rs.1,19,25,075/- is being added back to the total income of the assessee as per the provisions of Section 69 of the I.T.Act, 1961 for the year under consideration and charged to tax 60% r.w.s. 115BBE of the I.T.Act, 1961. Penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961 are being initiated separately against the assessee for concealing the income as above. “

Aggrieved, assessee filed appeal before the CIT(A) and the learned CIT(A) in paragraph 3.5 and 4 of the order dated 29/12/2023 held as under : “3.5. Though the appellant has not offered ‘YES’ comments at sl.No.9 of Form-35, it was asked vide DIN & letter No. ITBA/NFAC/APL_1/2023-24/1058909922(1) dated 20.12.2023 to intimate whether it has made payment of tax – which includes element of advance tax also – in compliance to notice of demand u/s 156 of the Act and date of compliance was fixed for 27.12.2023 but the appellant failed to contradict the information given at sl.no.9 of Form-35 and to prove that it has made payment of amount equal to the advance tax which was due on its income. It is therefore, clear that information, given at sl.no.9 of Form-35 is correct and the appellant has not made payment of amount equal to the advance tax which was due on its income.

Since the appellant has not filed return of income as well as not paid an amount equal to the amount of advance tax which was payable by it, present appeal is not liable to be admitted. The appeal is infructuous and is, therefore, dismissed.” 4. Aggrieved by the order of learned CIT(A), assessee is in appeal before us. The learned AR submitted that the assessee has filed return of income and paid due taxes, pursuant to the notice under section 148 of the Act issued by the learned Assessing Officer. Learned AR further submitted that no advances taxes were due and payable by the assessee as wrongly held by the learned CIT(A), while dismissing the appeal of the assessee. Learned AR further submitted that the learned Assessing Officer / CIT(A) misdirected themselves as they have decided the issue on the basis of the fact that “no return of income” was filed, whereas, it was the contention of the learned AR that the return of income has been filed by the assessee, which is available at page No.1 of the paper book. Learned AR further submitted that the learned Assessing Officer has wrongly invoked the provision under section 115BBE of the Act, despite the fact that the assessee has explained the source for investment made by her for buying the property, which is clear from paragraph 4 of the order of the learned Assessing Officer, which is reproduced herein above.

Per contra, learned DR submitted that the lower authorities have not considered the return of income as it was not filed within the time granted by the learned Assessing Officer as required in the notice issued under section 148 of the Act. It was submitted that the appeal of the assessee may be dismissed.

We have heard the rival contentions, perused the material available on record and also the documents filed before us. In our view, the assessee has filed the return of income before passing of the assessment order and therefore, in our view it will be in the interest of justice that such return of income and explanation given by the assessee should have been considered by the lower authorities while passing the impugned orders.

Furthermore, we are of the opinion that once the assessee has disclosed the sources of investment in the property, then, it was required to be examined by the learned Assessing Officer / CIT(A) before invoking the provisions under section 115BBE of the Act. In view of the above, we deem it fit to remit the matter to the learned Assessing Officer with a direction to reconsider the explanation given by the assessee as well as for filing the return of income belatedly, in accordance with law. In the light of the above, appeal of the assessee is allowed for statistical purpose.