PERLA TEJA VENKATA AMBICA RAMA SUDARSAN,ELURU vs. DCIT, CIRCLE-1, RAJAHMUNDRY

In the above cited appeal, the appellant has taken legal ground, stating that notice issued by the Department u/s 148 of the Act is invalid and consequently, the Ld.CIT(A) ought to have quashed the entire assessment proceedings as void-ab-initio, because, the notice even though dated 31.03.2021 was issued on 01.04.2021. Once the notice was issued on 01.04.2021, the Revenue should follow the procedure stipulated by the Finance Act, 2021 and the Revenue has not followed the procedure. Hence, the notice issued without approval of specified authority is invalid and illegal. Apart from this, the Ld.CIT(A) ought to have not confirmed the addition made by the Ld.AO with regard to unexplained cash deposits and unexplained payment of credit card bills. This ground relating to questioning of validity of notice u/s 148 was raised before the Ld.CIT(A) along with merits of the case by the appellant. Now the main argument of the Ld.AR of the appellant before ITAT is that the Ld.CIT(A) did not adjudicate this ground relating to validity of notice issued, which is the foundation for making any assessment. The Ld.AR has further stated that the ground raised relating to section 148 was mentioned in the order of Ld.CIT(A) also. But from the order of Ld.CIT(A), it is observed that there is no adjudication on the validity of the reopening notice issued u/s 148. The Ld.AR has stated that if the notice itself is invalid, then the additions made by the Ld.AO will not have legs to stand and the entire order will collapse. The Ld.CIT(A) has not adjudicated this important legal issue, but confirmed the addition made by the Ld.AO based on the contents of assessment order. It is a fact that the appellant did not participate before the Ld.CIT(A) despite several notices were issued, but the argument of the Ld.AR is that since the ground was raised before the Ld.CIT(A) with regard to reopening of the case itself, the Ld.CIT(A) is duty bound to adjudicate the validity of notice. But, since there was no adjudication on the issue of this reopening of the case, the Ld.AR of the appellant has requested the Bench to see the facts which are available on file and quash the assessment proceedings.

The Ld.DR vehemently argued that the notice was issued within due date i.e. on 31.03.2021 itself, which is within the time limit specified u/s 148 of the Act for the A.Y.2013-14.

After hearing both the sides, it is observed from the order of the Ld.CIT(A) that the main ground of appeal relating to validity of assessment itself was not adjudicated by the Ld.CIT(A). If this ground is adjudicated against the Revenue, all the additions made in the assessment order would automatically be deleted, because the foundation of the case itself was not existing. It is a fact that the appellant did not appear before the Ld.CIT(A), despite several opportunities given to him as mentioned in the order of the Ld.CIT(A), but at the same time, the Ld.CIT(A) is duty bound to adjudicate all the grounds of appeal raised before him, including the validity of notice u/s 148 of the Act. Since the First Appellate Authority has not adjudicated this ground, the same is remitted back to the file of the Ld.CIT(A) and he is directed to adjudicate the issue after giving an opportunity to both the parties. Both the parties are at liberty to file their documents to make out their case. The Bench is not expressing any opinion on this issue and the Ld.CIT(A) is directed to pass an order afresh on the issue of validity of notice and other grounds after giving opportunity to both the parties. As the issue is remitted back to the file of the Ld.CIT(A), the appeal of the assessee is allowed for statistical purpose.

In the result, appeal of the assessee is allowed for statistical purpose.