Income Tax Appellate Tribunal - Hyderabad
B. Sreenivasulu Reddy & Co., Kurnool, ... vs Ito, Ward-1, Kurnool, Kurnool on 9 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA Nos. 1079/Hyd/2016
Assessment Year: 2011-12
Sai Krishna Moturi, Hyderabad vs. Income Tax Officer,
Hyderabad. Ward - 12(2), Hyderabad
PAN - AUIPM 0221F
(Appellant) (Respondent)
Assessee by : Shri Amrit Kumar Kota
Revenue by : Smt. U. Minichandran
Date of hearing : 22-11-2016
Date of pronouncement : 09-12-2016
O RDE R
PER S. RIFAUR RAHMAN, A.M.:
This appeal filed by the assessee is directed against the order of CIT(A)-1, Hyderabad, dated 28/04/2016 for AY 2011-12.
2. On perusal of record, we find that the assessee filed this appeal before us with a delay of 95 days. In this connection, the assessee filed a petition mentioning the reasons for the said delay that his mother was expired at the relevant point of time, which prevented him to file the appeal within the stipulated time. As the assessee was prevented by the reasonable and sufficient cause in not filing the appeal before us, we condone the delay and admit the appeal for hearing and adjudication.
3. Briefly the facts of the case are that the assessee a salaried employee filed his return of income for the AY 2011-12 on 03/02/2012 admitting an income of Rs. 80,510/-, which was selected for scrutiny under CASS. Due to non-compliance to the notices issued to the 2 ITA Nos. 1079/H/16 Sai Krishna Moturi assessee u/s 143(2) and 142(1), the AO passed an ex-parte order u/s 144 of the Act making an addition of Rs. 28,10,900/- on account of cash deposits.
4. On an appeal before the CIT(A), the assessee made submissions, which were remanded to AO by the CIT(A) on the ground that since the assessment was completed u/s 144, the submissions made before him were new evidence/ material. In the remand report, the AO submitted that except in the case of Sri Ram Kumar, who has given hand loan of Rs. 20,000/-, the others have given confirmation. The CIT(A) after considering the remand report submitted by the AO, sustained the disallowance to the extent of Rs. 20,000/- towards unexplained cash deposit in the bank.
5. In the meanwhile, the AO initiated proceedings u/s 271(1)(c) for furnishing inaccurate particulars of the income and issued penalty notice on 31/03/2014. Since there was no compliance from the Assessee to the said notice, the AO deemed that the assessee has no explanation to offer for the cash deposits in his bank accounts and accordingly, he levied a minimum penalty of Rs. 10,62,599/- u/s 271(1)(c) of the Act. On appeal, the CIT(A) confirmed the penalty levied by the AO.
6. Aggrieved by the order of the CIT(A), the assessee is in appeal before us challenging the action of the CIT(A) in upholding the penalty levied by the AO u/s 271(1)(c) of the Act.
7. Before us, the ld. AR of the assessee filed a copy of the consequential order dated 09/11/2016 passed by the AO against the order of CIT(A) wherein the income revised by the AO as under:
1) Total income as per income returned Rs. 80,510
2) Total income as per order u/s 144 Rs.28,10,900 Rs. 28,91,410 3 ITA Nos. 1079/H/16 Sai Krishna Moturi Less: Relief allowed by the CIT(A) vide Rs. 27,90,900 Order dt. 28/04/2016.
Revised total income Rs. 1,00,510
===========
Tax thereon Rs. Nill
Net Tax payable Nill
7.1 Ld. AR, therefore, submitted that penalty levied on the addition, which was non-existent as per the consequential order, cannot with stand. Accordingly, he submitted that the penalty levied may be cancelled.
8. On the other hand, the ld. DR has not controverted the submissions of the ld. AR.
9. Considered the rival submissions and perused the material facts on record. As submitted by the ld. AR of the assessee, the AO has passed consequential order for the quantum appeal after first appellate proceedings, as per which the additions were deleted by the ld. CIT(A). The proceedings u/s 271(1)(c) were initiated before the order of first appellate authority and there is no liability in existence.
Hence, the penalty proceedings on non-existent liability cannot with stand. Therefore, the penalty levied by the AO u/s 271(1)(c) of the Act is deleted.
9. In the result, appeal of the assessee is allowed.
Pronounced in the open court on 9 th December, 2016 Sd/- Sd/-
(P. MADHAVI DEVI) (S. RIFAUR RAHMAN)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 9 th December, 2016
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4
ITA Nos. 1079/H/16
Sai Krishna Moturi
Copy to:-
1) Shri Sai Krishna Moturi, 19-3-294/2, Vattepally, Falaknuma, Hyderabad - 500 053
2) ITO, Ward - 12(2), Hyderabad.
3) CIT(A) - 1, Hyderabad 4 Pr. CIT - 1, Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.
6) Guard File .