GANGADHAR SALAGAR,VIJAYAPURA vs. INCOME TAX OFFICER, WARD-1 & TPS, BIJAPUR

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ITA 2623/BANG/2025Status: DisposedITAT Bangalore28 April 2026AY 2022-233 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) failed to decide the appeal on merits, merely dismissing it for non-compliance. The Tribunal restored the appeal to the CIT(A) for a fresh decision on merits, directing the assessee to cooperate.

What were the facts?

The assessee filed an updated return of income with a significant turnover but did not file the mandatory tax audit report. Despite multiple notices from the AO, the assessee remained non-responsive, leading to an ex-parte assessment order. The appeal before the CIT(A) was dismissed due to non-response to a single notice.

What were the issues?

Whether the CIT(A) correctly dismissed the appeal without deciding on merits, and whether the additions made by the AO were justified without proper investigation.

Which sections of the Income-tax Act were involved?

Section 144,Section 44AB,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE

Before: SHRI PRASHANT MAHARISHI, VICE – & SHRI KESHAV DUBEY

PER PRASHANT MAHARISHI, VICE – PRESIDENT

1.

ITA No.2623/Bang2025 is filed by Shri Gangadhar Salagar (the assessee/appellant) for the assessment year 2022-23 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 10.9.2025 wherein the appeal filed by the assessee against the assessment order passed u/s. 144 of the Income Tax Act, 1961 [the Act] by the Assessment Unit [ld. AO] on 16.3.2024, was dismissed for the reason that the notice issued on 19.6.2025 by the ld. CIT(A) was not responded to.

2.

Briefly stated the facts show that the assessee is an individual, who filed his return of income on 27.12.2022 at a total income of

ITA No. 2623/Bang/2025 Page 2 of 3

Rs.63,89,240. While filing return of income on 27.12.2022 the assessee has disclosed turnover of Rs 9,93,95,417. This return was updated on 11.1.2023 declaring total income of Rs.57,55,980 and turnover of Rs.8,32,32,348 was reported. The AO noted that despite this huge turnover, the tax audit report u/s. 44AB of the Act was not filed.

3.

A notice u/s. 143(2) of the Act was also issued to the assessee on 1.6.2023 and further thereafter 11 notices were issued. The assessee except seeking adjournment on two occasions did not respond at all. As the return of income was selected for scrutiny to verify non-compliance of audit report u/s. 44AB of the Act as well as no entries in Schedule of Assets & Liabilities of return of income, subsequently assessment was framed u/s. 144 of the Act r.w.s. 144B on 16.3.2024 making the addition of Rs.1,66,76,184 on account of undisclosed business income of Rs.9,50,000 as unexplained investment. The total income was assessed at Rs.2,33,82,164.

4.

The assessee approached the ld. CIT(A) and issued only one notice on 19.6.2025 which was not responded to by the assessee, he passed an appellate order confirming the action of the AO.

5.

The assessee has preferred this appeal and despite service of notice, none appeared on behalf of the assessee and the ld. DR, Sri Balusamy N, JCIT(DR) supported the orders of the ld. lower authorities.

6.

We have carefully considered the material on record and the contentions of the ld. DR and proceed to decide the issue on the merits of the case. We find that though the AO has given 12 opportunities to the assessee, none of them were availed. This resulted into assessment order passed u/s. 144 of the Act. However, we find that when the assessee preferred the appeal before the ld.

ITA No. 2623/Bang/2025 Page 3 of 3

CIT(A) only one notice was issued to the assessee on 19.6.2025 as per para 1 of the appellate order, which was not responded to, which resulted into dismissal of the appeal filed by the assessee on 16.9.2025. The ld. CIT(A) has neither discussed the merits of the case nor considered the submission made by the assessee in the Statement of Facts stated before him. In fact, the ld. CIT(A) should have decided the issue on the merits of the case which the ld. CIT(A) has failed to address. Merely because there is a difference between the contract receipt as per Profit & Loss account and in Form 26AS, it may be first trigger point of the investigation, but without investigation, it could not have been added to the total income. Further the addition of Rs.9,50,000 confirmed by the ld. CIT(A) did not refer to the facts of the case of addition or why the ld. AO is correct. 7. In view of these facts, we restore the whole appeal back to the file of the ld. CIT(A) with a direction to the assessee to respond to the notice issued by the ld. CIT(A), furnish the necessary details called for deciding the dispute in appeal, availing an opportunity of hearing and decide the issue on its merits afresh. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28th April, 2026.

Sd/- Sd/- (KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, /Desai S Murthy / Dated, the 28th April, 2026. Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore By order

Assistant Registrar, ITAT, Bangalore

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