Kumar Cherka Vs ITO (ITAT Hyderabad)
The appeal before the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, arose from an order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), for Assessment Year 2020-21. The assessee had not filed a return of income for the relevant assessment year. Based on information available with the Assessing Officer (AO), it was noticed that an amount of Rs. 89,12,572 was received from Southern Power Distribution Company of Telangana Limited. The AO reopened the assessment under section 147 and issued a notice under section 148 on 30.03.2024. As there was no response to the notices issued during the assessment proceedings, the AO completed the assessment under sections 147, 144 and 144B on 24.12.2024, treating the entire amount reflected in Form 16 as taxable salary income.
The assessee challenged the assessment before the CIT(A). However, the appeal was dismissed in limine on the ground that the assessee had not complied with section 249(4)(b) by paying advance tax allegedly payable in a case where no return of income had been filed.
Before the Tribunal, the assessee contended that the amount shown in Form 16 represented retirement benefits received upon retirement from service, including gratuity, pension, leave encashment, provident fund and other terminal benefits, which were exempt under section 10 of the Income-tax Act. It was further submitted that the assessee had died on 30.05.2020 due to the Covid-19 pandemic, prior to the due date for filing the return of income. Consequently, the return could not be filed and the notices issued during reassessment proceedings remained unanswered. The assessee sought restoration of the matter to the AO for verification of the nature and taxability of the receipts.
