Ganga Rao Sunkara Vs ITO (ITAT Hyderabad)
ITAT Hyderabad: Order Passed Against Deceased Assessee Upheld; Entire Petrol Pump Turnover Cannot Be Taxed—Matter Remanded
The Hyderabad ‘B’ Bench of the Income Tax Appellate Tribunal, Hyderabad Bench adjudicated the appeal for AY 2017-18 involving a COCO (Company Owned–Company Operated) petrol pump run on behalf of Indian Oil Corporation (IOC).
On the preliminary issue, the Tribunal rejected the assessee’s challenge to the validity of the CIT(A)’s order passed in the name of the deceased assessee. It held that although the death of the assessee was intimated, the legal representatives were not brought on record before the CIT(A). Since the defect was attributable to the assessee and was subsequently cured by filing the appeal before the ITAT through legal heirs, the appellate order could not be treated as void ab initio. The case law relied upon by the assessee was distinguished as relating primarily to assessment notices issued to dead persons, not appellate orders.
On merits, the Tribunal found substance in the assessee’s contention that she was merely a maintenance and handling contractor of an IOC-owned petrol pump and earned only commission income, which was duly subjected to TDS and reflected in Form 26AS. The cash deposits in the bank account represented sale proceeds of IOC, regularly transferred back to IOC, and not the assessee’s income. The AO and CIT(A) failed to properly verify the bank transactions, IOC ledger accounts, and TDS details before treating the entire deposits as unexplained income and invoking section 115BBE.
Accordingly, while dismissing the legal ground on death of the assessee, the Tribunal set aside the order on merits and remanded the matter to the AO for fresh verification of bank accounts, IOC ledger, and Form 26AS, with a direction to grant due opportunity of hearing. The assessee’s appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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