AVVA SITARAMA RAO,HYDERABAD vs. DCIT., CENTRAL CIRCLE- 2(4), HYDERABAD

Facts

A search and seizure operation under Section 132 was conducted, followed by the centralization of the case and issuance of notices under Section 142(1). The assessee failed to file a return or furnish details, leading the AO to complete an ex-parte assessment under Section 144, making additions for estimated income and undisclosed amounts from insurance and property sales.

Held

The CIT(A) set aside the ex-parte assessment made under Section 144 and remanded the case to the AO for de novo adjudication, providing the assessee proper opportunity, citing the amendment to Section 251. The ITAT upheld the remand principle, setting aside the CIT(A)'s order and restoring the matter to the AO with directions for reconsideration after providing a reasonable opportunity of hearing to the assessee.

Key Issues

The key issues were the validity of the ex-parte assessment under Section 144 due to non-filing of returns and the subsequent additions made by the AO, and whether the matter should be remanded for fresh adjudication with proper opportunity to the assessee.