KOLLI VENKATA RAJA GOPAL,TIRUPATI vs. THE INCOME TAX OFFICER, WARD-2(1), GUNTUR

In this case, the Ld.AO made addition of Rs.33.64 lakhs u/s 69A of the Income Tax Act, 1961 (“the Act) as the assessee could not explain the nature and source of cash deposits made into his SB account. From the assessment order, it is seen that eight opportunities were given by the Ld.AO to explain the source of cash deposits. As there was no response, a final show cause notice u/s 144 of the Act was also sent to the assessee. Still the assessee did not respond and give any reply with regard to nature and source of cash deposits made into his bank account. In view of the same, addition was made and the assessment was completed u/s 147 r.w.s.144 of the Act.

Aggrieved by the addition, the assessee filed an appeal before the CIT(A), stating that the notice issued u/s 148 of the Act is not in accordance with law and is liable to be quashed as illegal and consequently the entire reassessment proceedings are liable to be quashed as void-ab-initio. Even though these grounds were taken while filing the appeal before the Ld.CIT(A), the appellant did not furnish any reason for coming to the conclusion that the reopening of assessment as invalid. The Ld.CIT(A) required the appellant to give the nature and source of cash deposits and also file his objections against the assessment made by the Ld.AO. From the order of the Ld.CIT(A), it is noticed that the Ld.CIT(A) has given four opportunities to the appellant to substantiate his case. But, there was no submission nor any material available on record relating to merits of the case and in support of the grounds of appeal as well as statement of facts. In view of the same, the Ld.CIT(A) dismissed the appeal of the assessee and confirmed the additions made by the Ld.AO.

Before the ITAT, the appellant has filed grounds of appeal stating that the notice issued u/s 148 by the Ld.AO is barred by limitation and not in accordance with law. Hence, the additions should be deleted. Before going into the merits of the case, it is found that the appellant has filed appeal with a delay of 233 days. The Ld.AR of the appellant has filed a petition for condonation of delay, in which, it was stated that the appellant came to know about the order of the Ld.CIT(A) when he received a call from the Income Tax Officer in the third week of February, 2016 regarding the payment of outstanding demand. As soon as the appellant came to know about the Ld.CIT(A) order, he took necessary steps and filed appeal in ITAT. It was also mentioned that the appellant has not responded to the notices sent by the Ld.CIT(A), because the appellant gave e-mail account uniqrajagopal@gmail.com for sending the notices of hearing. But the Ld.CIT(A) has sent all the notices to the email account of srmcolt@gmail.com and hence, the appellant was not aware of the hearing notices and as there was no response from the appellant, the Ld.CIT(A) dismissed the appeal ex-parte.

During the appeal proceedings before the ITAT, the Ld.AR of the appellant has stated that the Ld.CIT(A) has sent notices to a different e-mail ID and not to the designated e-mail of the appellant and this is the reason for not knowing about passing of the order by the Ld.CIT(A) and filing of appeal with the delay. Hence, the Ld.AR of the appellant requested the Bench to condone the delay and give an opportunity to file all the submissions before the AO.

The Ld.DR has strongly opposed the reasons mentioned in the condonation petition and argued that the contents of the condonation petition are devoid of any evidences and hence no credence should be given to the same. From the orders of the Ld.AO and the Ld.CIT(A), it could be observed that sufficient opportunities were given to the appellant and there is absolutely no response and hence, the additions made should be confirmed.

After hearing both the sides, the Bench decides to give one more opportunity to the appellant as the notices sent by the Ld.CIT(A) went to a different email account and not to the designated e-mail ID given by the appellant. Following the ratio laid down in the case of Vidya Shankar Jaiswal, 343 CTR 39, the delay in filing the appeal before the ITAT is condoned. It is observed from the orders of the lower authorities that the issues were not discussed on merits, because the appellant has not furnished any information before them. As the assessment order and the appellate order have not discussed the merits of the case, it is not possible to adjudicate the issues on merits. In view of the same, the assessee is given one more opportunity to argue his case before the AO and the Ld.AO is directed to take all the arguments of the appellant afresh and pass an order. But from the facts and circumstances, it is observed that the appellant has not complied with the notices of the Ld.AO/Ld.CIT(A). In view of the same, a cost of Rs.10,000/- is imposed, which should be paid to Visakhapatnam District Legal Services Authority, within a month of date of receipt of this order.

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