BUDDHA SRIDHAR VEERA VENKATA NAGA SATYA,HYDERABAD vs. WARD 24(1)(1), MUMBAI

ITA No.7181/MUM/2025 The grounds of appeal are as under:

The Ld. CIT(A) failed to appreciate that the satisfaction note required for invoking section 153C, which must be recorded by the AO of the searched person and handed over to the AO of the appellant, was neither prepared nor handed over by the AO.

The Ld. CIT(A) erred in confirming the addition despite a blatant violation of the principles of natural justice, as the appellant was never provided with the sworn statements of builders or the seized material to verify its authenticity.

The Ld. CIT(A) erred in confirming the addition of Rs. 28,66,000/- u/s 69 of the Act, which was based on un-corroborated and un-verified loose sheets, which are dumb documents incapable of proving any transaction without independent verification.

The Ld. CIT(A) ought to have appreciated the fact that the AO failed to conduct any independent inquiry to link the alleged cash payment to the appellant or to establish that the said amount represented the appellant's undisclosed income.

Without prejudice to the above, the Ld. CIT(A) erred in not appreciating that the AO had failed to provide the reasons recorded for forming the belief that income had escaped assessment in the case of the appellant and furthermore, the assessment order is silent on the communication of such reasons, thereby violating the principles of natural justice.

1 The Ld. CIT(A) ought to have fairly considered the legal position that the AO has to record his reasons for his satisfaction that the appellant's income has escaped assessment and also communicated the same to the assessee in the notice u/s 148 of the Act, which renders the notice as invalid.

2 The Ld. CIT(A) ought to have held that the assessment order passed based on such invalid notice invalidates such assessment order as null and void and is liable to be quashed.

The Ld. CIT(A) erred in not appreciating the fact that the notice u/s 148 of the Act, was issued merely based on the statement recorded and is without proper satisfaction on the part of the AO.

The Ld. CIT(A) ought to have appreciated the fact that the "Reason to Suspect" cannot be a reason for re-opening of the assessment u/s 147 of the Act.

The Ld. CIT(A) ought to considered the fact that the AO erred in not providing the information available with the department for initiation of reassessment proceedings u/s 148 of the Ac and failed to provide an opportunity to cross-examine before relying on such material, this action of the AO has clearly violated the principles of natural justice.

1 Additional Grounds of Appeal

2 A request was also made for admitting above additional grounds of appeal claiming that they relate to question of law arising from the facts which are on record in the assessment proceedings and therefore, in view of the judgment of the Hon'ble Supreme Court of India in the case of National Thermal Power Co. Ltd vs. CIT 229 ITR 383, the same may be accepted.

Subsequently, the assessee filed appeal before the ld.CIT(A) who noticed that the appeal was delayed by 307 days stated to be due to lack of knowledge of the correct procedure of law under the Act. The appellate authority condoned the delay. However, in so far as the legal grounds challenging the validity of reassessment proceedings and 153A as also on the ground of cross examination as well as merits of the addition are concerned, the appellate authority affirmed the decision of the AO and dismissed the appeal.

1 Apart from the original grounds of appeal, the assessee filed additional ground challenging the validity of the assessment order claiming inter alia that the AO lacked necessary jurisdiction to pass the order.

We have carefully considered the relevant facts of the case and also perused the records. It is evident that in this case, on account of non compliance by the assessee before the AO, the assessment order was passed

1 In the light of above facts of the case, we deem it appropriate to set aside the orders of the lower authorities and restore the entire issue to the file of the Assessing Officer to pass de novo assessment after allowing adequate opportunity of hearing to the assessee who, in turn, would ensure necessary compliance. Further, the assessee is allowed liberty to file any additional evidence or ground to canvass his case before the assessing authority. Accordingly, the grounds of appeal are allowed for statistical purposes.

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

ITA 4608/MUM/2025(Penalty)

The Ld. CIT(A) has erred in holding that the delay of 733 days in filing the appeal has not been satisfactorily explained by the appellant.

The Ld. CIT(A) ought to have appreciated that the AO erred in making addition of Rs. 40,000/- as the information sought in all these notices was the same, then it would not constitute as multiple default.

The Ld. CIT(A) ought to have appreciated that section 273B prevents the A.O from imposing the penalty u/s 272A(1)(d) of the Act, when there is a reasonable cause for such failure.

The Ld. CIT(A) ought to have admitted the appeal and ought to have heard the appeal on the basis of merits rather than dismissing the appeal without appreciating that the delay is due to reasons which are beyond the control of the appellant.

1 Additional Grounds of Appeal

A request has been made for admission of above additional grounds of appeal claiming them to be legal in nature arising from the facts

In the subsequent appeal before the appellate authority, it was noticed that the same was filed after a delay of 733 days. The ld.CIT(A) observed that it was not a case of an ordinary delay and the assessee has failed to give any explanation for delay that too without specifying the definite cause or time period during which he was prevented from filing the P a g e | 10 Buddha Sridhar Veera Venkata Naga Satya appeal, the delay cannot be condoned. The delay in filing the present appeal was nothing but negligence and inaction on part of the assessee which could have been very well avoided by the exercise of due care and attention. Thus, there existed no sufficient or good reason for condoning inordinate delay in filing the present appeal. Considering above, the delay is not condoned, the appeal was not required to be admitted for adjudication on merits. However, it is seen that the assessee had no case on merits either and ultimately dismissed the appeal.

1 Before him, it was submitted by the assessee that without proper opportunity of being heard the A.O passed the penalty order. The AO did not appreciate the fact that the said issue was pending before Ld. CIT(A)/NFAC, Delhi. The circumstances were beyond the control of the appellant company to furnish requisite information. It faced technical issues on the e-filing portal. However, the ld.CIT(A) observed that the assessee failed to substantiate the claim with credible evidence, such as screenshots, error messages, or official acknowledgments of portal downtime. The assessee also submitted that all the notices u/s 142(1) of the Act were issued by the AO seeking the same information from the assessee, therefore, once it had committed a default of non-compliance of the information sought by the P a g e | 11 Buddha Sridhar Veera Venkata Naga Satya AO then issuing repeated notices by the AO seeking same information would not multiply the default. In this regard it relied on the decision of Hon'ble ITAT, Hyderabad in the case of P.C Pantulu vide [276/HYD/2017]. However, such a plea was rejected by the ld.CIT(A) who finally dismissed the appeal on merits holding that the assessee to demonstrate any reasonable cause in this regard.

Before us, the ld.AR has requested to take a sympathetic view of the matter while the ld.DR relied on the orders of the authorities below stating that the assessee was a compulsive defaulter as evident from his attitude reflected in assessment as well as penalty proceedings.

We have heard the rival parties and perused the material available on records. It is palpable that the assessee has been consistently non compliant during various proceedings before both the authorities without any convincing reason. However, since we have already set aside the assessment order and have restored the quantum appeal to the AO for passing de novo order in para 6.1 above, considering the entirety of the matter, we deem it fair to restrict the penalty to Rs 10,000/- only and delete the balance. Thus, the grounds are allowed partly.

In the result, appeal is partly allowed.