TMI Blog2023 (6) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Ld. AO itself becomes null and void ab initio. Decided in favor of assessee. - I.T.A. No. 147/Viz/2022, C.O. No. 24/Viz/2022 (In I.T.A. No.147/Viz/2022) - - - Dated:- 1-6-2023 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee : Sri Sunil Vamsi Krishna Kota, AR For the Revenue : Sri ON Hari Prasada Rao, Sr. AR ORDER PER S. BALAKRISHNAN, ACCOUNTANT MEMBER : The captioned appeal is filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals), Visakhapatnam-3 [Ld. CIT(A)] in DIN Order No. ITBA/APL/S/250/2022-23/1043053720(1), dated 18/05/2022 arising out of the order passed U/s. 143(3) of the Income Tax Act, 1961 [the Act] for the AY 2019-20. 2. The Revenue has raised the following grounds of appeal: 1. The Order of the Ld. CIT(A) is erroneous both on the facts and in law. 2. The Ld. CIT(A) is not correct in deleting the addition of Rs. 91,50,000/- based on the submissions of the assessee. The Ld. CIT (A) ought to have appreciated that the AO had rightly added the income U/s. 69A of the Act as the assessee failed to substantiate his cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds raised by the assessee in his Cross Objection as well as the Grounds raised by the Revenue. Therefore, we deem it fit to take up firstly the Cross Objection raised by the assessee. 5. At the outset, we noticed that the assessee has filed the Cross Objection before the Tribunal with a delay of 73 days beyond the prescribed time limit. With respect to the delay, the Ld. AR drawn our attention to the affidavit filed by the assessee seeking condonation of delay by explaining the reasons for filing the Cross Objection belatedly. For the sake of reference, the relevant portions from the affidavit filed by the assessee are extracted herein below: 1 . 2 .. 3 .. 4. The Cross Objections were drafted and sent to me on 15/09/2022 for signatures. However, I was unable to pursue the documents and execute the same as I was out of the country due to a pre-planned commitment. Later on, after returning I could not have necessary discussions regarding the cross objections being filed as my Chartered Accountant was busy due to his tax audit and income tax return filings. Upon follow up from the Chartered Account, I realized the delay and immediately forwarded the sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to DCIT, Central-1, Guntur vide order U/s. 127 of the Pr. Commissioner of Income Tax (Central), Visakhapatnam in DIN Order No. ITBA/COM/F/17/2020-21/1030463120(1) dated 09/02/2021. Subsequently, notice U/s. 142(1) was issued on 12/4/2021. In response to the notices, the assessee s Authorized Representative filed the information and clarified the issues. The Ld. AO considering the submissions and after visiting the business premises of M/s. Pennar Aqua Exports at Nellore District wherein Sri O. Krishna Reddy is a partner found that Sri O. Krishna Reddy failed to prove that Rs. 36,80,000/- belongs to him or to M/s. Pennar Aqua Exports and therefore, treated this amount as undisclosed income of the assessee U/s. 69A of the Act. Similarly, the Ld. AO also found that Little Flower English Medium High School failed to substantiate its claim that Rs.35,20,000/- belongs to it and therefore added the same U/s. 69A of the Act as undisclosed income of the assessee. Similarly, out of Rs. 91,50,000/-, the assessee stated that Rs. 7 lakhs belongs to his Mother Smt. Swayamprabha and Rs. 6 lakhs belongs to his wife Smt. Nischala. The balance amount of Rs. 6.5 lakhs belongs to him. The Ld. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the instructions of various persons. Explaining these facts, the Ld. DR pleaded that the assessee is not in a position to properly explain the sources of cash and therefore the Ld. AO has rightly considered the amounts as unexplained cash U/s. 69A of the Act. The Ld. AR fully supported the order of the Ld. AO. 10. We have heard both the parties and perused the material available on record as well as the orders of the Ld. Revenue Authorities. The core legal issue involved in the Cross Objection raised by the assessee is the validity of the notice issued U/s. 143(2) of the Act. At this juncture, it is pertinent to extract the provisions of section 143(2) of the Act as under: Sec. 143(2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd void ab initio. Thus, the legal grounds raised by the assessee in its Cross Objection vide Grounds No. 4 5 are allowed in assessee s favour. 13. With respect to the other grounds raised by the assessee in its Cross Objection, since the legal issue involved in the Ground No.4 5 is allowed in favour of the assessee, the adjudication of other grounds on merits becomes infructuous. Hence, the Grounds No. 1, 2, 3, 6, 7, 8 9 raised by the assessee are dismissed as infructuous. 14. In the result, Cross Objection of the assessee is partly allowed. 15. With respect to the Revenue s appeal in ITA No.147/Viz/2022, while adjudicating the legal issue involved in the assessee s Cross Objection, we found that the assessment order passed by the Ld. AO is null and void ab initio since the notice issued U/s. 143(2) is beyond the prescribed statutory limit of six months. Hence, the grounds raised by the Revenue in its appeal on merits have no locus standi. Accordingly, all the grounds raised by the Revenue are dismissed. 16. In the result, appeal of the Revenue is dismissed. 17. Ex-consequenti, appeal of the Revenue is dismissed and the Cross Objection filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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