SIRAJ SUHAIL AHMEED,CHENNAI vs. ITO, WARD-1,, KRISHNAGIRI

Brief facts are as under: The assessee is an individual filed his return of income for assessment year 2017-18, admitting income of Rs.3,11,440/-. The AO noted that an information (ITS DATA) has been received from Ward-1. Krishnagiri that assessee had made cash deposit amounting to Rs.54,92,500/- in his bank account maintained with KVB, Krishnagiri relevant to the AY 2017-18. However, the assessee failed to declare the same in return of income and difference in income of the assessee of Rs.54,92,500/- escaped assessment. Therefore the AO issued notice u/s.148 of the Act dated 31.03.2021 for which assessee had filed return of income. Subsequently, the AO issued notice u/s.142(1) of the Act on 28.02.2022 requiring the assessee to furnish certain details, but the assessee failed to furnish any reply. Therefore, the AO concluded that the assessee failed to prove the source of cash deposit amounting to Rs.54,92,500/- and hence, made addition of said amount treating the same as unexplained cash deposit u/s.68 of the Income Tax Act, 1961. Further, the AO while completing assessment has not taken into account tax special rate of 60% u/s.115BBE and surcharge 25%. In order to rectify the mistake apparent on record, notice u/s.154 of the Act dated 18.11.2022 was issued to assessee proposing rectification. The assessee has failed to give any reply. Thus, the AO has passed rectification order dated 22.12.2022 computing tax at special rate @ 60% u/s.115BBE and surcharge of 25% on the addition made against the assessee. Assessee challenged the order of rectification passed u/s 154 of the Act before the ld.CIT(A) who proceeded ex-parte and confirmed the order of the AO. 4. Aggrieved by the CIT(A) order, assessee is in appeal before us. 5. Before us, the ld. Counsel for assessee submitted that the CIT(A) has sent the notices which were inadvertently not received by the assessee, hence the assessee was prevented from appearance on the purported dates. Therefore, he prayed that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his explanation regarding addition. The ld.DR stated that the assessee has defaulted in appearing before the appellate authority hence, no lenient view is to be taken in this case and prayed for dismissal of appeal. 6. We have heard rival submissions and perused material on record. Though we concur with the submissions of Ld. DR, however, keeping in mind the principle of natural justice, we deem it appropriate to grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) despite notices for the reasons stated above. Even, assessment has been done on the basis of no explanation by the assessee. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for de novo assessment hearing, after affording proper opportunity of hearing to the assessee subject to cost of Rs.5,000/- which shall be deposited by the assessee within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld.AO whose shall proceed for fresh assessment hearing after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents etc. if any, forthwith without any fail, failing which Ld.AO shall be at liberty to proceed with the assessment proceedings as per law. The ld. AR, who appeared also assured the bench that he will ensure that the assessee will prosecute his case diligently before the ld.AO. 7. In the result, appeal filed by the assessee is allowed for statistical purposes.