NOORUNNISA BEGUM,HYDERABAD vs. ITO, WARD-7(1), HYDERABAD

Briefly stated relevant facts are that the assessee is an individual and filed the return of income for the assessment year 2017-18 on 05/08/2017 declaring income of Rs. 4,83,890/-. During the scrutiny, the learned Assessing Officer found that there were deposits to the tune of Rs. 78 lakhs in the bank account of the assessee. Assessee explained that she received the same by way of inheritance through Hibbanama dated 07/08/2009 in the distribution of property with two others, whereunder her mother-in-law bequeathed all the cash (which later on said to have been found to the tune of Rs. 2.35 crores) and jewellery in the cash vault to son and daughter-in-law. According to the assessee, she got Rs. 78 lakhs which was deposited in the bank during demonetization period. Learned Assessing Officer was of the opinion that the creditworthiness of the ancestors through whom the assessee claims the cash was not proved and, therefore, added the entire amount to the income of the assessee.

Assessee preferred appeal before the learned CIT(A). learned CIT(A) recorded that he issued notice to assessee on 15/01/2021, 15/03/2021 and 21/09/2022 but the assessee did not respond to the said notices and, therefore, on considering the material on record, he opined that there is nothing on record to contradict the findings of the learned Assessing Officer. He, accordingly, upheld the addition and dismissed the appeal.

Plea of assessee in this appeal is that the assessee responded to the notice dated 15/01/2021 and sought an adjournment but subsequently she never received the other two notices and, therefore, could not prosecute her case by submitting the relevant material to establish the creditworthiness of the people through whom she inherited the cash; whereas learned DR contended that when the notice was issued to the address furnished by the assessee in form-35 with postage prepaid, there would be no reason for non-services of such notice on the assessee, and, therefore, the learned CIT(A) is justified in considering the appeal ex-parte.

We have gone through the record in the light of the submissions made on either side. It is a fact that the impugned order is an ex-parte order. According to the learned CIT(A), three notices were issued to the assessee on 15/01/2021, 15/03/2021 and the last one on 21/09/2022. There is no denial of the statement made by the assessee that she responded to the notice dated 15/01/2021 and sought time. According to the assessee, she never received the notices subsequently. Considering the ordinary course of human conduct, we are of the considered opinion that in the fitness of things, it would be proper to give an opportunity to the assessee to substantiate her plea before the learned CIT(A). Though the learned CIT(A) observed in his order that no evidence was produced before him during the appeal proceedings to support the contention of the assessee resulting in dismissal of the appeal, the fact remains that the assessee did not put forth her case before the learned CIT(A) for affective adjudication.

In this set of circumstances, what occurs to our mind is that giving an opportunity to the assessee to pursue the matter diligently before the first appellate authority will not cause any prejudice to the case of the Revenue and on the other hand, it would further the ends of justice. With this view of the matter, we set aside the impugned order and restore the issue to the file of learned CIT(A) to dispose of the same on merits, after affording an opportunity of being heard to the assessee. We make it clear that this is the final opportunity to the assessee to get the matter disposed of the case on merits by prosecuting the appeal diligently.

In the result, appeal of the assessee is treated as allowed for statistical purposes.