RASIDULLA GAZI,HYDERABAD vs. ITO, WARD-8(1), HYDERABAD

ITA 2004/HYD/2025Status: DisposedITAT Hyderabad23 September 2026AY 2017-1810 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, citing the assessee's illiteracy, lack of proper communication, and the liberal approach advocated by the Supreme Court in *Vidya Shankar Jaiswal vs. ITO (2025) 305 Taxman 83 (SC)*. The Tribunal noted that the assessee had opted out of email communication and no physical notice was served. On the merits, the Tribunal found the CIT(A)'s order to be cryptic and a verbatim reproduction of the AO's observations, without independent findings or affording an opportunity of being heard. The Tribunal observed that the CIT(A) failed to address the grounds of appeal and did not provide a speaking order. Consequently, the Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for re-decision with a direction to pass a speaking and reasoned order, afford an opportunity of hearing to the assessee, and consider the assessee's challenge to the AO's jurisdiction under section 144. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Rasidulla Gazi, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] dated 18/07/2024, which upheld the Assessing Officer's (AO) order under section 144 of the Income Tax Act, 1961, dated 27/12/2019 for Assessment Year 2017-18. The AO had made an addition of Rs. 17,43,400/- under section 69A of the Act, representing cash deposits in bank accounts during the demonetization period. The assessee claimed to be running a business under the name 'Gazi Travels' and had filed a return of income admitting Rs. 3,91,190/-. The CIT(A) confirmed the addition for failure to substantiate the source of cash deposits. The appeal before the ITAT was filed with a significant delay, which the assessee sought to condone.

What were the issues?

1. Whether the delay in filing the appeal before the Tribunal should be condoned, considering the reasons provided by the assessee, including his lack of education, reliance on an incompetent tax practitioner, and lack of proper notice. - Assessee's Contention: The delay was due to the assessee's illiteracy, the failure of his tax practitioner, non-receipt of physical notices, and the COVID-19 pandemic. The assessee only became aware of the tax arrears when his bank account was debited for recovery. - Revenue's Contention: The delay was inordinate and not supported by justifiable reasons, and therefore, should not be condoned. 2. Whether the assessment order passed by the AO under section 144 of the Act is valid, considering that the assessee had filed a return of income in response to a notice under section 142(1) of the Act before the assessment order was passed. - Assessee's Contention: The return of income filed in response to the section 142(1) notice should be accepted and acted upon, as proceedings were pending. The assessment framed without issuing a notice under section 143(2) is invalid, relying on *ACIT v. Hotel Blue Moon (2010) 321 ITR 362 (SC)* and *Canara Bank Ltd. v. CIT (2016) 384 ITR 490 (Kerala)*. - Revenue's Contention: The return was filed beyond the specified time and at the fag end of assessment proceedings, thus not requiring a notice under section 143(2). The ex-parte order under section 144 was passed due to the assessee's non-cooperation.

Which sections of the Income-tax Act were involved?

Section 69A,Section 144,Section 142(1),Section 143(2),Section 139(1),Section 139(4),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SHRI RAVISH SOOD, HON’BLE & SHRI MADHUSUDAN SAWDIA, HON’BLE

For Respondent: Shri B Laxmi Kanth, Sr-AR

PER RAVISH SOOD, JM:

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 18/07/2024, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 144 of the Income Tax Act, 1961 (for short, “the Act”), dated 27/12/2019 for Assessmen

The order continues below.

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