HEJJAJI SRIKANTIAH JAGADEESHA,BENGALURU vs. ITO WARD WARD 5(3)(2), BENGALURU

The assessee has raised several grounds of appeal. However, the principal grievance relates to the addition of ₹24,26,500 under section 69A of the Act,

Briefly, the facts show that the Assessing Officer received credible information through the risk management system that the assessee had deposited cash of ₹19,26,500 in his bank account. The TDS statement reflected sale consideration of ₹69,03,000 from the sale of immovable property and salary income of ₹8,89,083 from Federal-Mogul Goetze (India) Limited. There was also a cash deposit of ₹29,71,564 in a co-operative bank, and Form 15G reflected interest income of ₹41,000. Thus, information regarding aggregate transactions of ₹1,27,31,147 was received. Since the assessee had not filed a return of income for the relevant assessment year, notice under section 148 of the Act was issued on 26 February 2024 after following the prescribed procedure. The assessee was granted several opportunities of hearing and filed a return in response to the notice on 4 June 2024, declaring income of ₹9,53,530. The Assessing Officer found that cash of ₹24,26,500 deposited in a co-operative bank was not satisfactorily explained and therefore made an addition under section 69A. Further, interest of ₹75,563 earned from savings accounts maintained with the co-operative bank was added to the assessee’s income. Information was also received that the assessee had filed Form 15G showing interest income of ₹41,296, which was not offered in the return. Accordingly, the total income was assessed at ₹34,96,889 by reassessment order dated 10 March 2025.

Aggrieved, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A) issued notices on 28 November 2025, 8 December 2025, 15 December 2025 and 6 January 2026. The assessee sought adjournment on one occasion, but there was no compliance on the other dates. Relying on judicial precedents, the learned CIT(A) held that the assessee was not

Aggrieved by the order of the learned CIT(A), the assessee is in appeal before us. We heard Smt. Suman Lunkar, Chartered Accountant, on behalf of the assessee, and Shri Ganesh R. Ghale, Standing Counsel, on behalf of the Income Tax Department.

We have carefully considered the rival submissions and perused the orders of the lower authorities. We find that the learned CIT(A) issued notices to the assessee’s email address, whereas in Form No. 35 the assessee had stated “No reply” in response to whether notices or communications could be sent by email. Thus, the assessee did not clearly indicate whether he wished to receive notices electronically. This appears to have contributed to the limited response before the learned CIT(A), as the assessee filed only one adjournment request and thereafter did not appear. Form No. 35 therefore did not contain a proper response regarding service of notices by email.

However, since the assessee was not effectively represented before the learned CIT(A), we consider it appropriate, in the interest of justice, to restore the entire appeal to the file of the learned CIT(A). The learned CIT(A) has no authority to dismiss an appeal merely on the ground that the assessee does not wish to prosecute it; rather, the appeal must be decided on merits. In the present case, the learned CIT(A) failed to discharge that responsibility. This is the sole reason for restoring the appeal to the file of the learned CIT(A).

At the same time, the assessee also failed to comply with various notices issued by the learned CIT(A), though he did seek adjournment once. This indicates that the assessee was receiving the notices. Accordingly, we impose a cost of ₹5,000 on the assessee, to be deposited within 90 days from the date of receipt of this order with the Prime Minister’s National Relief Fund. Thereafter, whenever the hearing window opens, the assessee shall appear

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