SHANKAR JATAWATH,HYDERABAD vs. ITO, WARD-11(1), HYDERABAD

The Assessee has raised the following grounds of appeal:

At the time of hearing, the learned Authorised Representative of the Assessee has submitted that the learned CIT(A) has dismissed the appeal of the assessee while passing the impugned ex-parte order. He has pointed out that in Form-35 the assessee has given the option of mode of communication as not through email however, the learned CIT(A) has issued notices only to the emailID and therefore, the assessee was under the Bonafide belief that he would receive the physical notice from the learned CIT(A).Thus, the learned Authorised Representative of the Assessee has submitted that the assessee could not respond to the notices issued by the learned CIT(A) and consequently, the appeal of the assessee was dismissed by the learned CIT(A) while passing the ex-parte order. The learned Authorised Representative of the Assessee has further pointed out that the learned CIT(A) has not adjudicated the legal ground raised by the assessee regarding the validity of the notice issued u/sec.148 of the Income Tax Act [in short "the Act"], 1961 after 03 years from the end of the assessment year under consideration. He has referred to the notice issued by the Assessing Officer u/sec.148A(b) and the Order passed u/sec.148A(d) of the Act and submitted that the Assessing Officer has clubbed the deposits as well as withdrawals in the bank account of the assessee to consider the income escaped assessment as more than Rs.50 lakhs whereas the deposit alone is less than Rs.50 lakhs and consequently, the notice issued by the Assessing Officer u/sec.148 of the Act dated 24.03.2024 beyond 03 years is barred by limitation. Thus, the learned Authorised Representative of the Assessee has submitted that the impugned order of the learned CIT(A) may be set aside, and the matter may be remanded to the record of the learned CIT(A) for fresh adjudication after giving an opportunity of hearing to the assessee.

On the other hand, the learned DR has objected to the grant of one more opportunity to the assessee and submitted that the assessee is a non-compliant and even non-filer of return of income. The Assessing Officer passed the ex-parte order u/sec.144 of the Act and thereafter, has not appeared even before the learned CIT(A) despite the three notices issued by the learned CIT(A) to the assessee. He has relied upon the Orders of the authorities below.

We have considered the rival submissions as well as relevant material on record. There is no dispute that the assessment order was passed by the Assessing Officer ex- parte when there was no compliance on behalf of the assessee to the notice issued by the Assessing Officer. The Assessing Officer has made an addition in respect of the cash deposits in the bank account as well as withdrawal. Thus, the Assessing Officer has assessed the income on account of deposits and credits as well as withdrawal in the bank account. The assessee challenged the Order of the Assessing Officer before the learned CIT(A) but the appeal of the assessee has been dismissed ex-parte when there was no response on behalf of the assessee to the notices issued by the learned CIT(A). The learned Authorised Representative of the Assessee has pointed out that the assessee in Form-35 has opted for mode of communication as other than email however, it appears that the learned CIT(A) has issued notice to the emailID of the assessee. Thus, the reason for non- appearance before the learned CIT(A) as explained by the assessee are found to be reasonable as once the assessee has given an option for communication of the notice other than emial then, the assessee has made out a reasonable cause that assessee was under the bonafide belief that he would receive the notice physically. Even otherwise, the learned CIT(A) has confirmed the additions made by the Assessing Officer without considering the apparent and prima facie fact that the Assessing Officer has made the additions both on account of deposit in the bank account as well as withdrawal as manifest from the assessment order as well as the Order passed by the Assessing Officer u/sec.148A(d) of the Act giving the details of the amounts as under:

Thus, the Assessing Officer has considered both cash deposit as well as cash withdrawal for arriving at the total income escaped assessment. Accordingly, in the facts and circumstances of the case, we accept the plea of the assessee for granting one more opportunity for presenting his case before the learned CIT(A). Hence, the impugned order of the learned CIT(A) is set aside and the matter is remanded to the record of the learned CIT(A) for fresh adjudication of the appeal of the assessee including the legal ground/issues raised by the assessee regarding the validity of the notice issued u/sec.148 of the Act. Needless to say, the assessee be given an opportunity of hearing before passing the fresh Order.

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