VIJAYALAKSHMI, LEGAL HEIR OF LATE SHRI K.S. VENUGOPAL,TELANGANA vs. ITO, NCW-3(1), CHENNAI

The appeal has been filed by the daughter of the deceased assessee, Late Shri K.S. Venugopal, with a delay of 549 days. The appellant has filed a petition/affidavit seeking condonation of delay stating that her father was under the care of her brother in Mumbai after the demise of her mother, Smt. Chandra Venugopal, on 01.01.2018 due to ill health. The assessee’s father was residing in Aastha Old Age Home, Belapur, North Mumbai, and therefore could not receive any communication from the Assessing Officer (A.O) nor respond to the notices and reminder letters issued. The appellant further submitted that only after the demise of her father, and upon receiving the income-tax demand notice, she was able to gather certain details from the income-tax portal, though complete details could not be collected due to ongoing family disputes.

We have considered the petition/affidavit for condonation of delay in filing the appeal and are satisfied that there was sufficient cause for not filing the appeal within the prescribed time. Accordingly, the delay is condoned.

The A.O in the assessment order has observed that the assessee had deposited cash of Rs.18,00,000/- during the demonetization period but has not filed any return of income.

Accordingly, notice u/s. 142(1) of the Act was issued, which remained non complied, as the notice was returned by the postal authority with the remark “Left.” Thereafter, the notice was also served through the Inspector, who reiterated that the assessee was not available at the said address. The A.O, therefore, completed the assessment ex-parte u/s. 144 of the Act, making addition of credits in bank accounts of Rs.19,49,994/-. Aggrieved, the legal heir, Ms. Vijaya Lakshmi, daughter of the assessee, filed an appeal in Form-35 before the Ld. CIT(A). However, the Ld. CIT(A) dismissed the appeal on the ground that the assessee had not made payment of the advance tax as required under section 249(4) of the Act.

Before us, the Ld. Authorized Representative (A.R) submitted that the deceased assessee, along with his family members, had sold their joint property on 05.11.2016 for Rs. 34,00,000/-, and the entire sale consideration was received in cash for meeting medical expenses, which was later deposited in the bank account. It was explained that the assessee, being old and ailing, was residing in an old age home and was not aware of the notices issued in the assessment proceedings. In support of the contention, a copy of the sale deed was filed to substantiate the source of cash deposits. The Ld. A.R further contended that the Ld. CIT(A) dismissed the appeal on a technical ground without affording proper opportunity of hearing, and therefore, one more opportunity may be granted to explain the source of the deposits.

On the other hand, the Ld. Departmental Representative (D.R) relied on the orders of the lower authorities.

We have heard the rival submissions and perused the material on record. The A.O, in the ex parte order passed u/s 144 , has made addition of credit in bank accounts of Rs 19,49,994/- . The legal heir has explained the reasons for non-compliance of the notices. It is also noted that the notices issued could not be effectively served on the assessee. The Ld CIT(A) has also dismissed the appeal on technical ground without going into merit of the case. Considering the facts and in the interest of principles of natural justice, we are of the view that the assessee deserves one more opportunity to substantiate her case before the A.O. Accordingly, the matter is restored to the file of the A.O for denovo assessment in accordance with law after providing reasonable opportunity of hearing to the assessee. The assessee is also directed to cooperate and furnish all requisite details before the A.O on the date of hearing.

In the result, the appeal filed by the assessee is allowed for statistical purposes.