MR. MALAGARANAHALLI CHIKKONU PRASANNA,BANGALORE vs. INCOME TAX OFFICER, WARD-3(2)(3), BANGALORE

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ITA 999/BANG/2022Status: DisposedITAT Bangalore15 November 2022AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessment order was ex-parte and that the assessee had not been given a proper opportunity to be heard. Therefore, the entire issue was set aside to the AO for fresh consideration.

What were the facts?

The assessee's ex-parte assessment order under section 144 included additions for unexplained bank deposits and estimated business income. The assessee's petition to recall the order under section 154 was dismissed by the AO and subsequently by the CIT(A).

What were the issues?

Whether the AO has the power to recall an order under section 154, and whether the assessee was afforded a proper opportunity of hearing in the ex-parte assessment.

Which sections of the Income-tax Act were involved?

Section 144,Section 154,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE

Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI

For Appellant: Shri Thippeswamy, A.R
For Respondent: Shri Gudimella V.P. Pavan Kumar, D.R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER:

1.

This appeal by assessee is directed against order of the CIT(A) dated 17.8.2022 for the assessment year 2017-18. The assessee has raised various grounds with regard to sustaining addition of Rs.94,32,524/- towards deposit in assessee’s bank account with the Axis Bank No.94020056631515 and estimation of income from business. Originally, the assessment order was framed u/s 144 of the Income-tax Act,1961 ['the Act' for short] by the AO as follows:-

Mr. Malagaranahalli Chikkonu Prasanna, Bangalore

Page 2 of 3 Returned income Nil Addition u/s 69A of the Act 1,29,86,825/- (Taxed at 60% u/s 150BBE of the Act) (8% Income on turnover of Rs.1,43,43,936/-) 11,47,514/- ______________ Total:- 1,41,34,339/- ______________

2.

Against this assessee filed petition u/s 154 of the Act before the AO stating that assessee has deposited total amount of Rs.1,04,60,327/-, out of which an amount of Rs.93,43,150/- was deposited before demonetization and only an amount of Rs.12,75,450/- was deposited after demonetization and the entire amount has been from assessee’s business receipts as the assessee is engaged in the selling of Milky Mist products like Panneer, Cream, Ghee, Curd, Khova, etc. According to the assessee, the assessment has been framed wrongly in this case and requested the AO to recall the order and pass fresh order. However, the said petition filed by the assessee u/s 154 of the Act has been dismissed. Against this, assessee went in appeal before Ld. CIT(A). The Ld. CIT(A) has also observed that assessee has not explained the source of deposit into bank account and also the AO have no power to recall the order passed u/s 144 of the Act by exercising power u/s 154 of the Act. Against this assessee is in appeal before us.

3.

We have heard the rival submissions and perused the materials available on record. In this case, originally assessment order has been passed u/s 144 of the Act dated 21.10.2019. The assessee has not participated in the assessment proceedings. The order is ex-parte. The assessee has filed petition u/s 154 of the Act seeking the recall of the said order, which the AO failed to do so.

Mr. Malagaranahalli Chikkonu Prasanna, Bangalore

Page 3 of 3 Against this, assessee has also filed appeal before Ld. CIT(A) requesting the Ld. CIT(A) to set aside the order passed by the AO u/s 144 r.w.s. 154 of the Act, which has not been considered by the Ld. CIT(A). In our opinion, in the interest of justice, it is fair to set aside the entire issue to the file of the AO as the assessment order is ex- parte with direction to the AO to give an opportunity of hearing to the assessee before deciding the same. Accordingly, the entire issue is remitted to the file of AO for fresh consideration and to decide in accordance with law after giving an opportunity of hearing to the assessee.

4.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 15th Nov, 2022

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