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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by the assessee is directed against the revision order dated 17.03.2021 passed by Pr. Commissioner of Income Tax, u/s 263 of the Income Tax Act for Assessment Year 2015-16.
None has appeared on behalf of the assessee when this appeal was called for hearing. It transpires from the record that after filing this appeal the assesse has never appeared before Tribunal despite notices issued to the assessee through RPAD and acknowledgement available on record. Accordingly, the bench proposes to hear and disposed of this appeal ex- parte.
Mukesh Shah Page 2 of 5 3. Against the order of the Ld. Pr. CIT dated 17.03.2021 the assessee has filed the present appeal on 05.01.2022 and therefore there is a delay of 234 days in filing the present appeal. At the outset, we find that the impugned order was passed by the Ld. Pr. CIT on 17.03.2021 which as a period of Covid-19 pandemic and Hon’ble Supreme Court in suo-moto cognizance for extension of limitation reported in 441 ITR 722 (SC) has finally issued directions in Para 5 as under:
“5. Taking into consideration the arguments advanced by learned counsel and the impact of the surge of the virus on public health and adversities faced by litigants in the prevailing conditions, we deem it appropriate to dispose of the M.A. No. 21 of 2022 with the following directions: (i) The order dated 23-3-2020 is restored and in continuation of the subsequent orders dated 8-3-2021, 27-4-2021 and 23-9- 2021, it is directed that the period from 15-3-2020 till 28-2- 2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. (ii) Consequently, the balance period of limitation remaining as on 3-10-2021, if any, shall become available with effect from 1- 3-2022. iii. In cases where the limitation would have expired during the period between 15-3-2020 till 28-2- 2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3-2022. In the event the actual balance period of limitation remaining, with effect from 1-3-2022 is greater than 90 days, that longer period shall apply. IV. It is further clarified that the period from 15-3-2020 till 28- 2-2022 shall also stand excluded in computing the periods prescribed under sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.” Accordingly, in view of the judgment of Hon’ble Supreme Court extending the period of limitation due to Covid-19 pandemic, the appeal filed by the assessee is treated as within the period of limitation. Page 2 of 5
Mukesh Shah Page 3 of 5 4. We have heard the Ld. CIT-DR and carefully perused the impugned order passed by the Pr. CIT u/s 263 of the Act as well as assessment order dated 29.06.2017 . The AO while framing the assessment u/s 143(3) has made the addition on account of saving bank interest of Rs.1,72,734/- and consequently the total income of the assessee was determined by the AO at Rs. 1,72,734/- by accepting the business income at nil. Thereafter, the Pr. CIT noted from the assessment record that the AO has passed the assessment order without making any inquiry on the assessment of capital gain arising from sale of residential house and claim of deduction u/s 54 of the Act. Ld. Pr. CIT has specifically noted that assessee has claimed deduction u/s 54 in respect of the investment made in purchase of new house in the joint name of assessee and his son. Further the Pr. CIT noted that the AO has also not examined the claim u/s 54 in respect of the expenditure claimed by the assessee for interior design and furnishing of the house. Pr. CIT was of the opinion that deduction u/s 54 of the Act assessee is not permissible when the new house was not purchased by the assessee in his own name but the first name as per the purchase deed was the son of assessee and not of the assesse. Consequently, the Pr. CIT set aside the assessment order by holding that the order passed by the AO is erroneous so far as prejudicial to the interest of the revenue for lack of inquiry on the issue of allowability of the claim of deduction u/s 54 of the Act.
At the outset, we note that Ld. AO has passed the assessment order u/s 143(3) as under:
The assessee has filed his return of income for the year under consideration through e-filing acknowledgement no. 757245560310815 on 31/08/2015, showing net total income of Rs. Nil/-. The case was selected under Limited scrutiny through CASS selection and accordingly notice u/s 143(2) was issued on 20/09/2016 duly served on the assessee on 24/09/2016. Subsequently, notice u/s 143(2)/142(1) alongwith questionnaire was issued on 18/01/2017. In response to the said notices/ questionnaire, Shri. Vikas Gandhi, Advocate/AR attended the assessment proceedings from time-to-time with whom the case was Mukesh Shah Page 4 of 5 discussed. Written submissions filed have been placed on record after verification. Addition on saving bank interest income: 2. During the course of assessment proceedings from the bank account statement of HDFC Bank and RBL Bank furnished by the assessee with reply dated 27- 06-2017 and on verification of the statement it is noticed that the assessee is in receipt of Saving Bank account interest received from HDFC and RBL Bank. The assessee has not shown saving bank account interest received at Rs. 1,72,734/- (HDFC bank Rs. 1,847/- + RBL bank interest Rs. 1,70,887/-) in his return of income. The assessee in his reply dated 29/06/2017 has stated that the assessee his saving banks accounts with HDFC Bank and RBL bank, Nagpur, but due to oversight the assessee could not offered interest income of Rs. 1,72,734/- (HDFC bank Rs. 1,847/- + RBL bank interest Rs. 1,70,887/-) in his return of income filed. The assessee was required to offer interest income at the time of filing of return. Thus the interest income of Rs. 172,734/- is added back to the income returned. Penalty proceedings u/s 271(1)(c) is initiated separately initiated for concealing the particulars of income. [Addition - Rs. 1,72,734/- In view of the discussions above, the income of the assessee is determined as under :- Income from business as shown Rs. Nil/- Add- Add- 1. Addition on a/c of saving bank interest as per para 2 above Rs. 1,72,734/ Assessed Income Rs. 1,72,734/- OR Rs. 1,72,730/- Assessed as above u/s 143(3) of the Income tax Act, 1961 issue demand notice and challan. Tax calculated as per ITNS 150 enclosed which forms part of this order. Penalty proceedings u/s 271(1)(c) is initiated separately initiated for concealing the particulars of income.
Thus, it is clear that the order of the AO is completely silent on the issue of claim of deduction u/s 54 of the Act which reveals that there is a complete lack of inquiry on the part of the AO on this issue. There is Page 4 of 5 nothing coming out from the assessment order which could exhibit any thought process of the AO on this issue. Therefore, it is apparent that there is an absolute lack inquiry on the part of the AO which renders the assessment order as erroneous so far as prejudicial to the interest of revenue. Accordingly, we do not find any reason to interfere with the order of the Pr. CIT in setting aside the assessment order and remanding the matter to the AO for re-examination of the issue. We clarify that the opinion expressed by the Pr. CIT in the impugned order on the issue of deduction u/s 54 of the Income Tax Act shall not have any bearing on the decision of the AO while passing the consequential order and the AO shall examine and decide this issue by taking an independent decision without having any influence from the observations and opinion expressed by the Pr. CIT in the impugned order.
In the result, appeal of the assesse is dismissed in the above terms.
Order pronounced in the open court on 04.05.2023.