NAGESWARA RAO POKALA,WEST GODAVARI vs. INCOME TAX OFFICER, TADEPALLIGUDEM

The brief facts of the case are that, the assessee is an individual and had not filed his return of income for the assessment year 2016-17. As per the information available with the Department, the assessee had entered into financial transactions aggregating to Rs.1,89,75,454/- during the previous year relevant to the assessment year 2016-17. Accordingly, proceedings u/s 147 of the Income-tax Act, 1961, were initiated and notice u/s 148 was issued on 23.03.2023. In response to the notice u/s 148, the assessee filed his return of income on 21.04.2023. During the course of reassessment proceedings, notices u/s 143(2) and 142(1) of the Act, were issued to the assessee. The assessee submitted his response on 09.11.2023 and explained the nature and sources of the transactions appearing in his bank accounts.

The A.O., after considering the submissions of the assessee and the material available on record, observed that, the assessee had claimed turnover of Rs.41,54,995/- from wholesale paddy trading, Rs.28,00,000/- as personal savings and Rs.7,59,999/- as an amount received from his son. However, the assessee had failed to furnish documentary evidence to substantiate the wholesale paddy trading activity and the sources of the personal savings and amount received from his son. The A.O. further observed that, the assessee had declared agricultural income of Rs.1,00,000/- but had not furnished supporting documents such as records of agricultural land, bills, vouchers, details of expenditure and evidence regarding sale of agricultural produce. Accordingly, the A.O. treated Rs.77,14,994/- as unexplained money u/s 69A of the Act and Rs.3,31,686/- as income from other sources and determined the total income of the assessee at Rs.80,46,680/- for the assessment year 2016-17.

Aggrieved by the assessment order, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee raised grounds of appeal challenging the additions made by the A.O. towards unexplained money u/s 69A of the Act and income

The Ld. CIT(A), after considering the relevant submissions of the assessee, observed that the assessee had not availed the opportunities provided during the appellate proceedings and had not furnished any documentary evidence in support of his claims. Therefore, the Ld. CIT(A) held that the additions made by the A.O. towards Rs.41,54,995/-, Rs.28,00,000/- and Rs.7,59,999/- as unexplained money u/s 69A of the Act and Rs.1,00,000/- towards agricultural income treated as income from other sources, were sustainable. Accordingly, the Ld. CIT(A) sustained the additions made by the A.O. and consequently dismissed the appeal filed by the assessee.

Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri I. Kama Sastry, C.A., submitted that the Ld. CIT(A) dismissed the appeal without providing an effective opportunity to the assessee. He submitted that the assessee had filed an adjournment application before the Ld. CIT(A), but the same was not accepted and the Ld. CIT(A) proceeded to dispose of the appeal. He further submitted that the assessee has a good case on merits and, therefore, one more opportunity may be given to the assessee to represent his case before the Ld. CIT(A). Accordingly, he submitted that the matter may be restored to the file of the Ld. CIT(A) for fresh adjudication on merits, in accordance with law.

The learned Senior A.R. for the Revenue, Smt. Payal Gupta, on the other hand, supported the order of the Ld. CIT(A). She submitted that the Ld. CIT(A) had issued notices to the assessee on several occasions and the assessee had sought adjournments without furnishing the necessary details and documentary evidences. She further submitted that the Ld. CIT(A), after considering the material available on record, adjudicated the grounds raised by the assessee and confirmed the additions made by the A.O. Accordingly, she submitted that no further

We have heard both the parties, perused the material available on record and had gone through the orders of the authorities below. We find that, the assessee filed an appeal before the Ld. CIT(A) against the assessment order and raised specific grounds challenging the additions made by the A.O. During the appellate proceedings, the Ld. CIT(A) issued notices to the assessee on several occasions. The assessee sought adjournments in response to the notices. However, the Ld. CIT(A) rejected the adjournment application filed by the assessee and disposed of the appeal ex parte. We further find that, while disposing of the appeal, the Ld. CIT(A) has not considered the issues raised by the assessee in the light of the grounds of appeal and the facts of the case.

Since the Ld. CIT(A) rejected the adjournment application filed by the assessee and disposed of the appeal ex parte without considering the issues on merits, in our considered view, to give one more opportunity to the assessee, the matter needs to be restored to the file of the Ld. CIT(A). Accordingly, we set aside the

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