SHANKARAIAH TELAKAPALLY,NALGONDA vs. INCOME TAX OFFICER, WARD -1, NALGONDA

The grounds raised by the assessee read as under :

The appeal filed by the assessee is barred by limitation by 246 days. He has moved a condonation application explaining reasons thereof. I have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, I allow the application for condonation of delay subject to assessee’s undertaking that he visits Goshala of his choice and treats ailing cows. Accordingly, the delay is condoned and the appeal of the assessee is admitted for hearing.

The brief facts of the case are that assessee made aggregate cash deposits of Rs.13,87,969/- in his bank accounts during the period of demonetization of specified bank notes from 08- 112016 to 30-12-2016. As such, a notice u/s 142(1) was issued on 13.03.2018 and served upon the assessee requesting to file the Return of Income for the AY 2017-18. However, the assessee has not filed the return of income for the AY 2017-18 within the specified time in response to such notice. As the assessee has not complied the aforesaid notice issued u/s 142(1) of the IT Act 1961, the AO completed the assessment u/s. 144 on 17/12/2019, determining the assessee’s total income at Rs.18,87,018/- by treating the cash deposits aggregating to Rs.6,83,000/- made in bank accounts during the demonetization period as the income of the assessee u/s 69A of the Act and taxed under provisions of section 115BBE of the Act and estimated income at Rs. 12,04,018/- @ 8% of credits of Rs. 1,50,50,222/- in bank accounts.

Feeling aggrieved with the order of Assessing Officer assessee filed an appeal, which was later migrated to the ld.CIT(A), NFAC, Delhi, who dismissed the appeal of assessee.

Before me, ld.AR submitted that Assessing Officer did not allow any deductions mentioned in Form 16 and did not even mention the reasons for not allowing the same in his order and that the Ld.CIT(A) has wrongly relied on the decision of Hon’ble Supreme Court in the case of Goetze India Limited Vs. CIT reported in (2006) 157 taxman 1 (SC). He further submitted that if the assessee was given a chance, then the assessee would be in a position to explain the sources of deposits made during the demonetization period.

Per contra, the ld.DR has raised objection for remanding the matter back to the file of lower authorities.

I have heard the rival contentions of both the parties and perused the material available on record and also the order passed by the lower authorities. Ld.CIT(A) has dismissed the appeal of assessee on the ground that the evidence filed by the assessee was not available with the Assessing Officer and for that purposes, the Ld.CIT(A) relied on the decision of Goetez India Pvt. Limited Vs. CIT (supra). It is the case of the learned Authorised Representative that assessee is a salaried Government employee, working as a Veterinary Live Stock Officer in Nalognda District of Telangana and is drawing a salary of more than Rs.10 lakhs. The Assessing Officer as well as the Ld.CIT(A) added back the salary income of the assessee as the assessee has shown Form 16 to the lower authorities. Further, the Ld.CIT(A) has not given the deduction of interest paid on education loan. It was submitted that the assessee was given a chance, the assessee would be in a position to explain the sources of deposits made during the demonetization period. Considering the facts and circumstances of the case, I deem it appropriate to remand back the matter to the file of ld.CIT(A) with a direction to consider and admit the evidence filed by the assessee and decide the issue in accordance with law subject to payment of costs of Rs.2,000/- (Rupees Two Thousand only) in favour of Prime Minister National Relief Fund which shall be payable within one month or from the date of receipt of this order or whichever is earlier.

Accordingly, the appeal of the assessee is remanded back to the file of ld.CIT(A) with a direction to decide the appeal denovo after affording due opportunity of hearing to the assessee. The ld.CIT(A) shall consider the submissions of assessee including the submission that salary income and education were wrongly added to the income 4 while making addition in the hands of the assessee. On the date of the hearing fixed by the ld.CIT(A), the assessee shall file all the documents in support of his case. In case, the assessee failed to file any documents in support of his case, ld.CIT(A) shall decide the matter in accordance with the law. Thus, the appeal of the assessee is allowed for statistical purposes.

In the result, the appeal of assessee is allowed for statistical purposes.