BHOPPANA PRASAD RAO, VISAKHAPATNAM,VISAKHAPATNAM vs. ITO, WARD-1(4), BHILAI, BHILAI

These appeals for Assessment Year (‘AY’) 2011-12 filed by the assessee are directed against orders dated 21.05.2024 and 22.05.2024 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (‘NFAC’), Delhi Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

In the ITA No.168/RPR/2026, the assessee has raised not only the legal grounds (reopening of assessment) but also grounds challenging addition of Rs.1,24,88,907/- under section 69A of the Act. In The ITA No.169/RPR/2026, the assessee has challenged the levy of penalty of Rs.37,19,000/- under section 271(1)(c) of the Act.

The relevant facts giving rise to these appeals are that the assessee, director of M/s Planet National Holdings is a non-filer of the Income Tax Return (‘ITR’) of the relevant year. The Ld. Assessing Officer (‘AO’) was in possession of the information that the assessee had received a sum of Rs.1,24,88,907/- through cheque from Shri Dhansukhlal Shah, partner of M/s Daya Builders, Mumbai. The nature and genuineness of said sum of Rs.1,24,88,907/- was not found explainable with corroboratory evidence by the Ld. AO; therefore, he reopened the case of assessee under section 148 of the Act on 31.03.2016. During the course of reopened assessment proceedings, the assessee did not ensure any compliance, therefore, the Ld. AO completed the assessment ex-parte by taxing sum of Rs.1,24,88,907/-. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal observing as under: Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

2 During the course of appellate proceedings (initial stage. in the year of 2020), the appellant has submitted a letter stating that he has opted for Vivad Se Vishwas Scheme. On perusal of CPC 2.0 portal, it is observed that the assessee has opted for VSVS by filing Form No. 1 and 2 and the assessee has received Form 3 directing to pay Rs. 46,47,809 /- on or before 30-09-2021 and Rs. 51,12,590/- after 30-09-2021. But the assessee has not paid the said amount nor received Form 4 till date as per the CPC 2.0 portal, however the extended due date for payment of above tax arrears has also expired as per the Vivad Se Vishwas Act. 2020 and therefore the case is taken up for adjudication as regular appeal. In this regard, a final show cause notice was issued on 02.05.2024 requesting to submit the details on the current status of VSVS in your case. The relevant portion of the notice is reproduced as under for ready reference. "As could be seen from the records, it is observed that you have opted for Vivad Se Vishwas Scheme, 2020. However, on verification of CPC 2.0 Portal, in your case it is showing as "Awaiting Form 4". Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

3 However, there is no compliance from the assessee to the above said show cause notice till the date. Further. as per the VSV Scheme, there is no possibility to pay tax dues at present. Hence. the appeal is taken up for adjudication based on the facts and material available on record.

The appellant reserves the right to add, alter, omit or amend all or any of the grounds of appeal.

In the facts and circumstances of the case and in law the Ld Assessing Officer has erred in initiating proceedings u/s 147 at the instances of Investigation Wing without conducting any enquiry mechanically and without application of mind.

The assessment order passed u/s 144 r.w.s 147 is bad in law and on facts.

4 During the course of appellate proceedings. the appellant has filed written submissions stating that he is an employee of Bhilai Steel Plant, Bhilai and the company deducted tax at source, therefore, he was under bonafide belief that Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

In the facts and circumstances of the case and in law the Ld Assessing Officer has, erred i n making addition of Rs.1,24,88,907/- as undisclosed income u/s 69A of the Income-tax Act, 1961 on the basis of report of Investigation Wing without supplying copy thereof to the applicant.

Further, the appellant has submitted HSBC joint bank account statement along with written submissions in the year of 2022 and contended that the Ld. AO erred it concluding assessment by making addition of Rs.1.25.19.220/- (including bank interest of Rs.30.313/-) as undisclosed income u/s. 69A of the Act, on the basis of investigation report. However, it is pertinent to note that the appellant is a non-filer and there is no response before the Ld. AO during the course of assessment proceedings too.

6 On perusal of written submissions made by the appellant. except pointing about reopening of assessment based on investigation report. no documentary evidence submitted in support of his claim with regard to cash deposits which remains unexplained during the course of assessment proceedings as well as during the course of appellate proceedings. The following points remained suspicious and which says that the assessment was done in right way as per law based on the material available on record.

7 In view of the above. despite providing sufficient opportunities during the course of present appellate proceedings, the appellate has not furnished any sources with regard to the cash deposits of Rs.1,25,19,220/- (including bank interest of Rs.30,313/-). In the absence of sufficient documentary evidence and proper explanation by the appellant, Accordingly, the addition made by the Ld. AO of Rs.1,25,19,220/- is hereby upheld and the relevant ground of appeal raised by the appellant is hereby dismissed.” [Emphasis supplied]

The Ld. AO levied penalty of Rs.37,18,059/- under section 271(1)(c) of the Act on the above mentioned addition of Rs.1,24,88,907/-. Aggrieved with the penalty order under section 271(1)(c) of the Act, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal on the reasoning that the assessee had not ensured any compliance during the appellate proceedings.

Before us, Shri Yash Jain, CA, Ld. Authorized Representative (‘AR’) of the assessee, emphasizing para 8.3, 8.6 and 8.7 of impugned order dated 21.05.2024 (quantum appeal) and para 8.4 impugned order dated 22.05.2024 (penalty appeal), submitted that the Ld. CIT(A) had decided both appeals ex-parte as the assessee did not file any submission on the merit of cases. In quantum appeal, the assessee did not file any explanation with respect to the source and genuineness of deposit/credit of Rs.1,24,88,907/- in his bank account either before the Ld. AO or Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

On the other hand, Shri Ch. Rajeswara Reddy, Ld. Sr. DR, drawing our attention to various paras of the assessment order, penalty order and impugned appellate orders, submitted that the Authorities below had provided reasonable opportunities of being heard to the appellant assessee; however, he tactfully ensured noncompliance to avoid investigations. Hence, he prayed for dismissing both appeals. On our specific query, the Ld. Sr. DR reluctantly admitted for remanding both cases back to the Ld. CIT(A) for denovo adjudication.

We have heard Ld. AR and Ld. Sr. DR and have perused the material available on records. We have taken note of the fact that the assessee has not made any compliance on merit of cases. At initial stage in quantum appeal, the assessee filed certain submissions with respect to reopening of the case. However, Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

Since quantum appeal has been set aside and has been remanded back to the file of the Ld. CIT(A) for deciding the case afresh/denovo; we therefore, also set aside the impugned order dated 22.05.2024 and remand the matter back to the file of the Ld. CIT(A) for deciding this case afresh/denovo accordingly. Boppanna Prasad Rao vs. ITO, Ward-1(4), Bhilai

In the result, both appeals of assessee are allowed for statistical purposes as above.

""थ"/ The Respondent

The Pr. CIT, Raipur (C.G.) 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाड" फाईल / Guard file.