Income Tax Appellate Tribunal - Hyderabad
G. Bala Maddaiah, Kurnool, Hyderabad vs Ito, Ward-1, Kurnool, Kurnool on 20 November, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "B", BENCH: HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND
SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
ITA.No.630/Hyd/2017
Assessment Year: 2011-2012
G. Bala Maddaiah, vs. ITO, Ward-1,
Kurnool. Kurnool.
PAN: ACPPG 5870 K
(Appellant) (Respondent)
For Assessee: None
For Revenue : Smt. N. Swapna, DR
Date of Hearing : 20.11.2017
Date of Pronouncement : 20.11.2017
ORDER
PER D. MANMOHAN, VP.
This appeal was last posted for hearing on 09.08.2017. At the request of the Authorised Representative i.e., M/s. Venugopal & Chenoy, Chartered Accountants, the case was posted for hearing on 20.11.2017 and date was announced in the open court on which date none appeared on behalf of assessee. We therefore, proceed to dispose of the appeal, ex-parte, qua the assessee.
2. Though the assessee raised several grounds, the main contention is with regard to an addition of Rs. 10,16,420/- towards 'unexplained cash credits'. Assessee declared total income of Rs. 11,04,680/-, which was originally processed u/s 143(1) of the Act but later taken up for scrutiny. During the course of examination, it was noticed that the assessee made cash deposits with Oriental Bank of Commerce in his individual name. Assessee submitted that the bank accounts were to be opened in HUF status but, at the time of opening the bank accounts, individual PAN was given by mistake and the sources for the above deposits relate to his HUF status.
3. A.O. observed that though the HUF was an independent assessee the income therefrom is very meagre and these transactions were not reflected in the HUF status. Since the information is received in the individual status, the above amounts are considered in the individual status only. Since the assessee could not explain the credits or withdrawals in the said account, peak deposits were worked out to Rs. 26,32,664/- out of which an amount of Rs. 16,16,244/- was the opening balance and the balance of Rs. 10,16,420/- was treated as 'income from unexplained sources' u/s 68 of the Act.
4. Though the appeal was filed by the assessee, none appeared before the Ld. CIT(A). Hence the Ld. CIT(A) dismissed the appeal for non-appearance and also observed that the initial onus is upon the assessee to prove the identity, genuineness and creditworthiness and in the absence of furnishing of the sources of funds, A.O. was justified in making the addition. He thus affirmed the order of the Assessing Officer.
5. Further aggrieved, assessee is in appeal before the Tribunal.
6. We have heard the Ld DR and carefully perused the record. At the outset, we may notice that the Ld. CIT(A) has no power to dismiss the appeal for non-appearance since it is not a dispute between two rival parties, but it is a right availed for tax adjustment between the tax gatherer and tax payer. Hon'ble Madras High Court, in the case of CIT vs. Indian Express (Madurai) Pvt Ltd (140 ITR 705 at page 722), observed that there is a difference between a civil appeal and an appeal filed in an income tax matter. An appeal is a continuation of the process of assessment, and an assessment is but another name for adjustment of the tax liability to accord with the taxable event in the particular taxpayer's case. A tax authority is not the taxpayer's "opponent", in the 2 strictly procedural sense of the term, unlike a law suit in civil appeals wherein mutual rights between two contesting litigants are involved. It further emphasised that in a tax appeal, the appellate authority is very much committed to the assessment, either by pursuing further investigation or causing further investigation to be done, on its own, without being prodded by any of the parties. ITAT, Chennai Bench in the case of Ms. Kovai Sarala vs. ACIT ( I.T. (SS). A. No.35/Mds/2012, dated 04.02.2013) had taken a similar view. Hon'ble Bombay High Court in the case of Bharat Petroleum Corporation Ltd vs. ITAT, dated 25th October, 2013 had also taken a similar stand on this matter.
7. The Hon'ble Supreme Court in the case of CIT vs. S. Chenniappa Mudaliar (74 ITR 41)(SC) observed that the appellate authority has no power to dismiss an appeal for non-appearance. Therefore, we are of the view that the Ld. CIT(A) was not justified in dismissing the appeal, at the first instance, for non-appearance of the assessee.
8. However, since the Ld. CIT(A) has decided the matter even on merits, we consider the correctness of the order of the Ld. CIT(A) on this aspect. As rightly pointed out by the Ld. CIT(A), assessee maintained two bank accounts with Oriental Bank of Commerce and made cash deposits in both the accounts, which are in the name of the individual though it was stated that the accounts were to be opened in the HUF status. Since the assessee submitted that the HUF is an independent assessee and the bank accounts were opened in HUF status, the A.O. as well as Ld. CIT(A) verified the sources of the deposits and noticed that even the HUF has meagre sources of income and thus it is not capable of earning so much income to explain the deposits. However, the accounts having been maintained in the individual name, A.O. proceeded to invoke the provisions of section 68 to make an addition in the individual's hand and after taking into consideration the opening balance in the assessee's books of account and after working out the 3 peak credit, an addition of Rs. 10,16,420/- was made which was not explained either before the A.O. or before the Ld. CIT(A) and thus, the Ld. CIT(A) confirmed the addition made by the A.O. Even before the Tribunal, no material was placed by the assessee to contradict the finding of the tax authorities. Under these circumstances, we have no other alternative except to uphold the order of Ld. CIT(A) since the initial burden is upon the assessee to prove the source of deposit of cash. Accordingly, appeal filed by the assessee is dismissed on merits. Pronounced accordingly in the open court on 20th November, 2017.
Sd/- Sd/- (B. RAMAKOTAIAH) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated:20th November, 2017 OKK, Sr.PS Copy to
1. Venugopal & Chenoy, Chartered Accountants, 4-1-889/16/2, Tilak Road, Hyderabad-500001.
2. Income Tax Officer, Ward-1, Kurnool.
3. CIT (A)-Kurnool.
4. Pr. CIT, Kurnool.
5. DR, ITAT, Hyderabad.
6. Guard File.
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