VELU,VILLUPURAM vs. ITO, WARD-1,, VILLUPURAM

Brief facts of the case are that the assessee is an individual, proprietor of M/s. Bala Murugan Modern Rice Mill and did not file his return of income for AY 2013-14. As per the information available with the department, the AO found that the assessee has made cash deposits to the tune of Rs.13,61,29,430/- and received an amount of Rs.94,960/- from Tamil Nadu Generation and Distribution Corporation Ltd., and whereas the TDS of Rs.9,496/- was made during the assessment year. Hence, the case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act issued to the assessee. In response, the assessee has failed to file his return of income for the A.Y 2013-14. Further, the AO issued statutory notices to the assessee and by calling for details. The assessee chose to be silent and did not respond to any of the notices. Hence, the AO completed the reassessment by passing an exparte order u/s.147 r.w.s 144 of the Act dated 22.03.2022 by making an addition of Rs.13,61,29,430/- as unexplained cash deposits u/s.69A of the Act and amount of Rs.94,960/- as income from other sources and by arriving a total income of Rs.13,62,24,390/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 04.11.2022.

At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 5 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices. Hence, the ld.CIT(A), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an order dated 10.02.2026. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

The ld.AR submitted that the assessee is an aged individual and was not aware of the hearing notices issued by the AO as well as the ld.CIT(A) and impugned order passed by the ld.CIT(A) due to health issues of the assessee.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an ex-parte order by considering the information available with the department and the same has been confirmed by the ld.CIT(A), NFAC due to non-participation. Since, the assessee has failed to participate before the AO as well as the first appellate authority, we levy the cost of Rs.25,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.