MAHESHWAR REDDY KURA,HYDERABAD vs. INCOME TAX OFFICER, WARD-2, KARIMNAGAR

Facts

The assessee filed a return declaring Rs. 3,73,860/- for AY 2017-18, but information regarding Rs. 12,00,000/- cash deposit during demonetization led to reassessment proceedings. The Assessing Officer completed an ex-parte assessment due to the assessee's non-response to notices, making additions for unexplained investments, estimated business income, and unexplained cash deposits, and raising the total income to Rs. 49,51,868/-. The CIT(A) also dismissed the assessee's appeal ex-parte for non-prosecution, confirming the additions.

Held

The ITAT found the assessee's explanation of personal difficulties and inability to monitor proceedings as sufficient cause for non-appearance before the lower authorities. The Tribunal set aside the CIT(A)'s order and restored the matter to the file of the CIT(A) for fresh consideration, with directions to provide adequate opportunity to the assessee, subject to payment of costs of Rs. 5,000/- to the Prime Minister National Relief Fund.

Key Issues

Whether the ex-parte assessment and appeal dismissal by the lower authorities were justified given the assessee's reasons for non-compliance, and if the case should be remanded for fresh consideration and opportunity of hearing.