G. Gowri Shankar, Hyderabad vs Assessee

This is an appeal by the assessee directed against the order of the CIT (A)-IV Hyderabad dated 5.12.2013 passed for A.Y 2008-09 u/s 144 of the I.T. Act, 1961.

2. The assessee filed his return of income on 29.09.2008 declaring a total income of Rs.2,50,180. The return was duly processed u/s 143(1) on 2.2.2010. The assessee had made payments of Rs.40,03,250 on his credit card of ABN AMRO Bank. Subsequently the case have been taken up for scrutiny under CASS. A notice u/s 143(2) was issued on 28.8.2009 but

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there was no response from the assessee. Further notice u/s 142(1) was issued on 19.4.2010 for which also there was no response from the assessee. In the absence of response, another notice u/s 142(1) was issued on 1.6.2010 and this was also served on 3.6.2010. As the assessee has not turned up, again notice u/s 142(1) was issued on 23.7.2010 which was served on the assessee on 18.8.2010. As a final opportunity, notice u/s 143(2) was issued on 22.10.2010 and this was also served on the assessee on 24.11.2010. Finally, summons u/s 131 were issued on 3.12.2010 in response to which the assessee appeared on 10.12.2010 along with Sri Srinivas, CA and they were asked to file among other things the cash flow statement and details of cash deposits and its sources and the case was adjourned to 15.12.2020. Nobody appeared on the said date. In the circumstances, a show cause notice was issued to the assessee on 21.12.2010 asking him to show cause as to why the amount of Rs.40,03,250 representing ABN AMRO Bank N.V. (Credit Card Payment) should not be considered as his undisclosed income for the financial year 2007-08 and add to the income returned for the A.Y 2008-09. The said show cause notice was duly served on the assessee on 23.12.2010 and the assessee was asked to furnish his reply to the show cause notice by 24.12.2010 positively. There was no response from the assessee till date and assessee's attitude shows that he is reluctant either to appear or furnish any information. In these circumstances, the AO left with no other alternative except to complete the assessment ex parte u/s 144 of the I.T. Act, 1961 on the basis of material available on record.

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3. Aggrieved, assessee preferred appeal before the CIT (A). Before the CIT (A), assessee attended on 5.12.2013 and made the following submissions as per the order sheet noting:

"Sri G. Gowri Shankar attended. He submitted that he was running a medical shop near NIMS Hyderabad that patients come from outstation for treatment to NIMS & purchase medicines from him, that such patients do not have any banking facility or bank accounts in Hyderabad, that such patients did not have facility for safekeeping of cash that they carry for treatment expenses, that such persons had deposited the cash with him for safekeeping which he had deposited in his bank account and later withdrawn and returned to them.

Appellant also sought time to make submissions. It is pointed out to him that enough opportunity has been given to him and that as a last opportunity, hearing is adjourned to 12.12.2013 and that no further opportunity will be given at all.

Appellant is requested to file copy of ABN AMRO Bank account on 12.12.2013".

4. The ld CIT (A) held as under:

"10. The appellant has claimed that he was running a medical shop near Nizam's Institute of Medical Sciences, Hyderabad (NIMS) that cash deposits had been made in his bank account out of cash given to him by patients who came to NIMs for treatment and that he had later withdrawn and returned the cash to them. There is no evidence for this claim. In any event, this explanation has no relevance since the issue in the assessment order (and appeal) is the credit card payments made on his card with ABN AMRO Bank and not the cash deposits in his bank account. Presuming that it is the appellant's claim that the cash deposited by the patients with him had been used for the credit card payments, the appellant would still need to explain the sources for the

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repayment of funds of the patients. It is therefore, held that the appellant has been unable to furnish any explanation whatsoever for the issue in appeal and the appeal is dismissed even on merits".

5. Aggrieved, assessee is in appeal before us. The ld Counsel for the assessee Shri Shanthi Kumar stated that the assessee is an individual who runs a medical shop near NIMS. It was further submitted that the patients visiting his shop for purchase of medicine deposit their cash with the assessee for safe keeping as they do not have bank account and such cash was deposited by the assessee in bank. It was also brought to our notice that the CIT (A) asked to file copy of ABN AMRO Bank a/c before 12.12.2013 and the assessee did not comply with the filing of the bank a/c. Hence it was stated by the assessee that cash deposits have been made in his bank a/c out of the cash given to him at NIMS for treatment and later he had withdrawn the cash and returned the same to the respective persons and it has not got anything related to credit card payments as insisted by the AO and CIT(A).

6. The assessee has also filed a petition for condonation of delay in filing the appeal stating that the ex-parte u/s 144 dated 31.12.2010 was received by the assessee on 3.1.11 while due date of filing the appeal was 2.2.2011. The assessee filed the same on 13.10.2011 after delay of 8 months and 11 days. Along with the appeal memo assessee stated that he underwent medical treatment and was unable to attend his day to day activities for a period of 9 months and requested for condoning the delay.

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7. Before us the assessee submitted that he had also produced the medical certificate before the ld CIT (A). The CIT (A) however, rejected the plea for condoning the appeal stating that no medical certificate was enclosed with the letter seeking for condonation of delay and in the absence of any evidence establishing the genuineness of the assessee's claim and the nature of the medical problems, the delay in filing the appeal was not condoned by the CIT (A) and the appeal was dismissed in limine.

8. We heard both the parties. With respect to condonation of delay, assessee has furnished the medical certificate at page 14 of the paper book and relied on the judgment of the Hon'ble Supreme Court in the case of Collector of Land Acquisition vs. M/s. Katiji & Others (167 ITR 47 S.C) and also the decision of the ITAT Mumbai Bench (ITA No.456/Mum/2009) dated 10.11.2010 in the case of Yatish Trading Co. (P) Ltd vs. ACIT. We find that the assessee has got reasonable cause for the delay in filing the appeal. Since the assessee has not produced the medical certificate before the CIT (A) (according to the CIT (A) finding) we set aside the issue to the file of the CIT (A) to condone the delay. With respect to merits of the case, the assessee has submitted that the issue is with regard to the cash deposits made by the assessee in the bank and not the credit card payments. We are inclined to give one more opportunity to the assessee to represent his case and remit the issue on merits to be decided by the CIT (A) after condoning the delay,

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9. In the result, appeal is allowed for statistical purposes.

Order pronounced in the Open Court on 13th March, 2015.

Sd/- Sd/- (P.M. Jagtap) (Asha Vijayaraghavan) Accountant Member Judicial Member

Hyderabad, dated 13th March, 2015.

Vnodan/sps Copy to:

1. Shri B. Shanthi Kumar, Advocate, 411 Taramandal Complex, 5-9-13 Saifabad, Hyderabad 500004

2. Income Tax Officer Ward 6(1) Income Tax Towers, AC Guards Hyderabad

3. The CIT(A)-IV Hyderabad

4. The CIT-III Hyderabad

5. The DR, ITAT, Hyderabad

6. Guard File

By Order

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