CHIKKONDA BHAGYALAXMI,WARNAPARTHY vs. ITO, WARD -1, MAHABUBNAGAR

Succinctly stated, the AO based on information that the assessee during the subject year had carried out substantial financial transactions, viz., (i) cash deposits in one or more accounts (other than a current account and time deposit): Rs.1,08,74,606/-; and (ii) commission or brokerage: Rs.52,033/-, but had not filed her return of income for the year under consideration, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act, dated 20/04/2022 was issued by the AO.

During the course of the assessment proceedings, the AO issued multiple notices under section 142(1) of the Act, which however were not complied with by the assessee. Accordingly, the AO was constrained to assess the income of the assessee vide an ex-parte order under section 147 r.w.s 144 of the Act, dated 13/03/2024, wherein he determined the income of the assessee at Rs.1,09,26,639/- after making two additions, viz., (i) addition of the unexplained cash deposits in bank accounts under section 69A: Rs.1,08,74,606/-; and (ii) income from other sources: Rs.52,033/-.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, as the assessee failed to participate in the appellate proceedings, the CIT(A) after briefly referring to the facts involved in the case, upheld the additions made by the AO and dismissed the appeal.

The assessee, aggrieved with the order passed by the CIT(A) has carried the matter in appeal before us.

We have heard the Learned Authorized Representatives of both parties, perused the orders of the authorities below and the material available on record.

Shri S K Gupta, Advocate, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted that though the assessee in Memorandum of Appeal, i.e., “Form-35” had specifically provided her email address, i.e., “bandelianuradha@gmail.com” for receipt of notices/communications through email from the CIT(A) office, but neither any notice intimating the fixation of the appeal nor the ex-parte order passed by the CIT(A), dated 20/06/2025 was ever served/dropped in the said email account. The Ld. AR to buttress his aforesaid contention had taken us through the screen shots of the ITBA account of the assessee which revealed that all the notices intimating the fixation of the appeal by the CIT(A) were dropped in an email account, viz., “gopalpet7121@apgvbank.in” (copies placed on record). The Ld. AR submitted that as the assessee was not put to notice about the fixation of the appeal vide either of the notices stated by the CIT(A) in his order to have been issued to the assessee, i.e., dated 30/01/2025, 12/02/2025, 20/02/2025, 06/03/2025 and 09/06/2025, thus, there was no occasion for the assessee to participate in the said proceedings, as a result whereof he had suffered the dismissal of the appeal vide an ex-parte order. Carrying his contention further, the Ld. AR submitted that for the aforesaid reason, the assessee had also remained unaware of the order passed by the CIT(A), dated 20/06/2025 disposing of the captioned appeal. The Ld. AR submitted that the assessee had learnt about the dismissal of her appeal vide an ex-parte order only when she was informed that a substantial income tax liability of Rs.1.99 crores (approx.) was saddled upon her. The Ld. AR submitted that as the income of the assessee was below the threshold limit, therefore, she did not browse her ITBA portal and had thus remained oblivion about the dismissal of the appeal. It was submitted that as the delay of 121 days in filing of the present appeal had crept in for bona fide reasons and not on account of any lackadaisical approach adopted by the assessee, the same, thus, in all fairness and interest of justice be condoned.

Per contra, Shri Mohan Babu, Learned Senior Departmental Representative (for short, “Ld. Sr-DR”) vehemently objected to the seeking of the condonation of delay involved in the present appeal. The Ld. Sr-DR submitted that though the CIT(A) had afforded a sufficient opportunity to the assessee to participate in the appellate proceedings, which he failed to do, therefore, for the said reason, the first appellate authority being left with no option was constrained to dispose of the appeal vide an ex-parte order after relying upon a host of judicial pronouncements wherein it was held that an appellant who fails to pursue the proceedings cannot claim relief as a matter of right. The Ld. Sr-DR submitted that the conduct of the assessee regarding the income tax proceedings can safely be gathered from the fact that not only the assessee had remained absent despite being afforded sufficient opportunities by the CIT(A), but had earlier also suffered an ex-parte order under section 147 r.w.s. 144 of the Act, dated 13/03/2024. The Ld. Sr-DR submitted that as the assessee had not demonstrated any sufficient or reasonable cause for the repeated non-appearance either before the AO or the CIT(A), therefore, having failed to diligently prosecute the appeal, she cold not thereafter seek the benefit arising from her own default. The Ld. Sr-DR to support his contention had relied upon certain judicial pronouncements, viz., (i) Jaimin Gautam Mehta vs. ACIT in ITA Nos.7573 & 7574/Mum/2025, dated 28/01/2026; (ii) CIT vs. B.N. Bhattarcharjee and Another (10 CTR 354); (iii) Dr. P. Nalla Thampy vs. Shankar (1984) (Supp) SCC 63; (iv) New India Assurance vs. Srinivasan (2000) 3 SCC 242; and (v) C.I. Builders Pvt Ltd. vs. PCIT (2025) 178 taxmann.com 257 (SC).

We have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both parties in the backdrop of the orders of the authorities below.

Admittedly, it is a matter of fact borne from record that the assessee despite having been put to notice about the fixation of the appeal by the CIT(A) on five occasions, viz., notices dated 30/01/2025, 12/02/2025, 20/02/2025, 06/03/2025 and 09/06/2025 had failed to participate in the proceedings, as a result wherein she was visited with an ex-parte order. Also, the assessee had delayed the filing of the present appeal before us by 121 days. In our view, there is substance in the Ld. AR’s contention that though the assessee in “Form-35” had provided her email address, i.e., “bandelianuradha@gmail.com” for receipt of notices/communications through email from the CIT(A) office, but neither of the aforementioned notices intimating the fixation of the appeal was ever forwarded to the said email address as per the copies of the screen shots of e-filing portal filed by the assessee before us, and the said notices were forwarded to an email account, i.e., “gopalpet7121@apgvbank.in”. Also, we find substance in the Ld. AR’s contention that as the CIT(A) office had been forwarding all the communications/notices to the aforementioned email account, i.e., “gopalpet7121@apgvbank.in” and not dropped the same in the email account provided by us the assessee in Form-35, i.e., “bandelianuradha@gmail.com” or the specific address provided by her at Sl No.17, therefore, the same had resulted to the delay involved in filing the present appeal. As the assessee had deposed the fact that she had gathered about the dismissal of her appeal by the CIT(A) vide his order dated 20/06/2025 only when she was informed about the substantial income tax liability of Rs.1.99 crores (approx.) that was saddled upon her, we have no reason to doubt the veracity of the said deposition. Also, the Revenue has not placed on record any material before us which would disprove the correctness of the aforesaid claim of the assessee.

We thus, in terms of our aforesaid deliberations are of a firm conviction that as the delay of 121 days involved in filing of the present appeal had crept in not because of any fault attributable to the assessee, the same, in all fairness merits to be condoned.

Carrying our observation further, we are of firm conviction that as the assessee was never validly put to notice about the fixation of the appeal on either of the five occasions when the same was fixed by the CIT(A), therefore, she had on the said count also for no fault on her part suffered an ex-parte order. In our view, considering the facts leading to the passing of an ex-parte order by the CIT(A), the matter in all fairness and interest of justice considering the totality of the facts involved in the present case merits to be set aside to the file of the CIT(A) who is directed to re-decide the appeal. Needless to say, the CIT(A) shall during the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee.

In the result, appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

We shall now take up the appeals filed by the assessee against the orders passed by the CIT(A), NFAC, Delhi, upholding the penalty imposed by the AO under section 271AAC(1) of the Act, dated 13/09/2024 and under section 272A(1)(d) of the Act, dated 13/09/2024 in ITA No.2465/Hyd/2025 and ITA No.2466/Hyd/2025, respectively.

At the threshold, we may herein observe that both the appeals filed by the assessee before us involve a delay of 31 days.

Shri S K Gupta, Advocate, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, submitted that the reason leading to the delay in filing of the captioned appeals remain the same as was there before us in ITA No.2448/Hyd/2025, i.e., failure on the part of the CIT(A) to forward the notices/communications at the email address provided by the assessee in Form- 35.

As we have based on our observations recorded while disposing of the appeal in ITA No.2448/Hyd/2025 condoned the delay involved in the said appeal, thus, on the same footing the delay of 31 days involved in the present appeal is hereby condoned.

Coming to the merits of the case, we are of the view that as the assessee alike in ITA No.2448/Hyd/2025 as adjudicated herein above, had not been validly put to notice about the fixation of the appeal before the CIT(A), therefore, for the said reason he had remained divested of an opportunity to participate in the appellate proceedings and prosecute the matter before the said first appellate authority.

We thus, in terms of our aforesaid deliberations are of firm conviction that the matter requires to be set aside to the file of the CIT(A) for re-deciding the appeals afresh after disposing of the quantum appeal in the case of the assessee in ITA No.2448/Hyd/2025. Needless to say, the CIT(A) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee.

Resultantly, both the appeals filed by the assessee are allowed for statistical purposes in terms of our aforesaid observations.

In the result, all the three appeals filed by the assessee are allowed for statistical purposes in terms of our aforesaid observations.