Income Tax Appeal Allowed, Addition Deleted under Section 69A. Delay Condoned, Authorities Fail Onus.

The Tribunal allowed the appeal, deleting the addition of Rs. 6,00,000 made under section 69A of the Income Tax Act. The delay in filing the appeal due to the Covid-19 pandemic was condoned, and the appeal was admitted for adjudication. The authorities failed to discharge their onus, and the ld. CIT(A) was found to have erred in changing the provision of law without specific notice to the assessee. The order was pronounced on 21st December 2022 in Chennai.

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Issues: Delay in filing appeal due to Covid-19 pandemic, Addition of unexplained credit under different sections of the Income Tax Act, Failure to discharge onus by authorities, Power of CIT(A) to change provision of law in assessment.

1. Delay in filing appeal due to Covid-19 pandemic:
The appeal was delayed by 248 days due to the Covid-19 pandemic. The delay was condoned, and the appeal was admitted for adjudication.

2. Addition of unexplained credit under different sections of the Income Tax Act:
The Assessing Officer made an addition of Rs. 6,00,000 as unexplained credit in the bank account under section 147 of the Income Tax Act. The ld. CIT(A) confirmed this addition under section 69A of the Act. However, it was argued that the ld. CIT(A) erred in adding the amount without considering the confirmation provided by the assessee's husband. The Tribunal found that the Assessing Officer invoked section 68 of the Act by referring to the addition as "unexplained credit," and not "unexplained money" as done by the ld. CIT(A) under section 69A. The Tribunal held that the ld. CIT(A) did not have the power to assess a particular item under a different provision without giving specific notice to the assessee, and as such, the addition under section 69A was deemed inappropriate and was deleted.

3. Failure to discharge onus by authorities:
Both the Assessing Officer and the ld. CIT(A) failed to discharge their onus by not obtaining details from the bank under section 133(6) of the Act. The Tribunal noted that the assessee had provided confirmation from her husband, thereby discharging the onus cast upon her.

4. Power of CIT(A) to change provision of law in assessment:
The Tribunal emphasized that the ld. CIT(A) does not have the power to change the provision of law regarding an item of assessment without specific notice to the assessee. Section 250 of the Act empowers the ld. CIT(A) to make further inquiries or direct the Assessing Officer to do so, but changing the provision of law without notice is not permitted. The Tribunal held that the ld. CIT(A) could not have treated the addition under section 69A of the Act, and therefore, the addition was deleted.

In conclusion, the Tribunal allowed the appeal filed by the assessee, deleting the addition of Rs. 6,00,000 made under section 69A of the Income Tax Act. The order was pronounced on 21st December 2022 in Chennai.

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