SREE SATYA PRAKASH NALAMATI,HYDERABAD vs. INCOME TAX OFFICER, WARD - 6(1), HYDERABAD

Facts

The assessee made cash deposits of Rs. 18,03,730/- during the demonetization period but failed to file an income tax return. The Assessing Officer added this amount as unexplained money under Section 69A and passed an order under Section 144. The CIT(A) dismissed the assessee's appeal, affirming the addition, as the assessee failed to produce evidence for the source of funds being agricultural income despite being given opportunities.

Held

The ITAT found that the CIT(A) committed a gross failure by not sending three out of four notices for hearing to the correct email address provided by the assessee in Form-35. This denial of proper opportunity to be heard infringed natural justice. Therefore, the ITAT set aside the matter to the CIT(A) for re-adjudication, directing them to provide a reasonable opportunity of being heard to the assessee.

Key Issues

Whether the CIT(A) failed to provide the assessee a sufficient opportunity of being heard by incorrectly delivering appeal notices, and if the addition under Section 69A was just.