Sankarlal Naik Karamsi Vs ITO (ITAT Hyderabad)
Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside the order dated October 3, 2024, passed by the learned Commissioner of Income Tax (Appeals)-NFAC Delhi, concerning the Assessment Year 2016-17, in the case of Sankarlal Naik Karamsi versus the Income Tax Officer (ITO). The appeal was filed by the assessee against the CIT(A)’s order, which had upheld the assessment made by the AO under Section 147 read with Sections 143(3) and 144B of the Income Tax Act, 1961.
The case originated from information flagged under the ‘Non-filer Monitoring System (NMS)’ on the Insight Portal, indicating that the assessee had engaged in high-value financial transactions totaling Rs. 3,56,91,475/- in one bank account and made a cash deposit of Rs. 9,90,000/- in another during the Financial Year 2015-16, relevant to AY 2016-17, without filing an income tax return. Consequently, the Assessing Officer initiated reassessment proceedings under Section 147, issuing a notice under Section 148 on March 21, 2023, after recording reasons and obtaining the necessary approval. The assessee, however, did not file a return in response to this notice or comply with subsequent notices. As a result, the AO completed the assessment, determining the assessee’s total income at Rs. 3,56,91,470/- under Section 69A of the Act, treating the bank credits as unexplained income. Penalty proceedings were also initiated separately.
Aggrieved by the assessment order, the assessee appealed to the learned CIT (A), who dismissed the appeal due to the assessee’s repeated non-compliance with the notices issued on multiple occasions. Before the ITAT, the learned Counsel for the assessee admitted difficulties in gathering the required information from the assessee and requested another opportunity to be heard by the CIT (A).
The learned Departmental Representative (DR) argued for the dismissal of the assessee’s appeal, citing the assessee’s consistent failure to appear or submit any written submissions before both the Assessing Officer and the CIT (A), which constituted a clear violation and non-compliance with statutory notices.
After considering the submissions and perusing the records, the ITAT noted the assessee’s failure to substantiate his case before the lower authorities and his non-compliance with statutory notices. However, considering the facts and circumstances and in the interest of natural justice, the Tribunal decided to set aside the CIT (A)’s order and restore the appeal to the file of the learned CIT (A). The ITAT directed the CIT (A) to grant one final opportunity to the assessee to submit the necessary details and evidence to support his case.
Given the assessee’s previous non-compliance with the Revenue authorities’ notices, the ITAT imposed a cost of Rs. 2,000/- on the assessee. The assessee was directed to pay this amount to the Telangana State Legal Aid Authorities at the Hon’ble Telangana High Court and submit the payment slip to the Registry within one month from the date of the order.
In conclusion, the ITAT allowed the assessee’s appeal for statistical purposes, setting aside the CIT (A)’s order and remanding the matter back for a fresh hearing with a final opportunity for the assessee to present his case, subject to the imposed cost.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
