CHANDRA SEKHAR RAVULA,HYDERABAD vs. ITO., WARD-5(1), HYDERABAD

We shall first take up the appeal for the AY 2013-14, wherein the assessee has assailed the impugned order on the following grounds of appeal:

“On the facts and in the circumstances of the case, the order of the Ld. CIT(A) is erroneous and unsustainable in law apart from being passed in violation of principles of natural justice. The Ld. CIT(A) failed to appreciate that in response to notice dated 19/05/2023, request was made for time and other notices issued on 12/07/2023 and 26/04/2024 were not served on the appellant and therefore could not put forth his case. 2. Without prejudice to the above, the Ld. CIT(A) erred in sustaining the addition made by AO of Rs. 1,07,00,000 as unexplained investment under section 69 of the Act. 3. The authorities below failed to appreciate the reply filed by the appellant before the Investigation Wing, wherein the appellant has explained the sources for the deposits in the bank.” 3. Succinctly stated, the assessee who is a proprietor of M/s. Sri Ven Consultancy Services had filed invalid return of income for the AY 2013-14, disclosing a net profit of Rs. 4,56,000/-.

Thereafter, the AO based on information that the assessee had during the subject year made cash deposits of Rs. 1.07 crores, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act, dated 30/03/2021 was issued to the assessee.

Ostensibly, the AO observing that the assessee had neither complied with the notice issued under section 148 of the Act, dated 30/03/2021 nor was coming forth with the requisite details as were called for vide notice issued under section 142(1) of the Act, therefore, issued a show cause notice (SCN) under section 144 of the Act wherein the assessee was called upon to explain that as to why the assessment in his case may not be framed to the best of judgment.

Thereafter, the AO in absence of any explanation forthcoming regarding the source of the cash deposits of Rs. 1.07 r.w.s 144B of the Act, dated 23/03/2022 made an addition of the same under section 69 of the Act.

Aggrieved, the assessee carried the matter in appeal before the CIT(A).

As it is discernible from the record, as the assessee except for seeking adjournment on one occasion had failed to participate in the proceedings before the CIT(A), therefore, the latter was constrained to dispose of the appeal after considering the material available on record.

The CIT(A) observing that the assessee had failed to provide any explanation regarding the source of the cash deposits of Rs. 1.07 Crores (supra) made by the assessee in his bank account, found not infirmity in the view taken by the AO and upheld the addition.

The assessee aggrieved with the order of the CIT(A) has carried the matter in appeal before us. Representative (for short “Ld. AR”) for the assessee, at the threshold of hearing of the appeal submitted that the present appeal involves a delay of 348 days which had occasioned for bona fide reasons. Elaborating on his contention, the Ld. AR submitted that the assessee had in his Memorandum of Appeal in “Form-35” provided his email address viz., ravulashekar@yahoo.com for communication of the notices through email. However, it was stated by him that no such notice on either of the dates on which the hearing of the appeal is stated to have been fixed was dropped in the aforesaid email account. Accordingly, it was submitted by him that as the assessee had remained unaware of the notice sent by the CIT(A), therefore, for the said reason he had failed to respond to the same. The Ld. AR submitted that all the aforementioned notices were dropped in the email account of the assessee’s erstwhile tax practitioner whose services he was no more availing. The Ld. AR to buttress his aforesaid claim had taken us through the “affidavit” filed by the assessee dated 02/09/2025 and copies of the scanned screen shots of the e-Filing portal account of the assessee which reveal that the notices intimating the fixation of the hearing of the Chandra Sekhar Ravula vs. ITO appeal were forwarded/dropped in the email account ie., snsomani108@gmail.com. The Ld. AR submitted that as the assessee despite providing the email address at which he had requested that the notices/communication from the CIT(A) office be dropped was however never put to notice about the same, and instead the records revealed that all the said notices were forwarded to the email account of his erstwhile tax consultant whose services he had discontinued, therefore, he was not validly put to notice about the fixation of the appeal and had remained divested of a sufficient opportunity to participate in the proceedings before the First Appellate Authority.

The Ld. AR based on his aforesaid contentions submitted that as the assessee for the aforesaid reasons had not only suffered the dismissal of his appeal vide an ex-parte order, but also had failed to file the appeal within the prescribed time period, therefore, the delay involved in filing of the present appeal in all fairness be condoned.

Carrying his contention further, the Ld. AR submitted that the assessee had learnt about the disposal of his appeal by the CIT(A) only on 25/06/2025 when an SMS message was received Chandra Sekhar Ravula vs. ITO by him regarding the penalty proceedings that were initiated in his case for the subject year. Elaborating further, the Ld. AR submitted that the assessee had on receipt of the said message immediately contacted his tax consultant who on loging into the income tax portal account had gathered that the appeals of the assessee for the AY 2013-14 and AY 2014-15 were dismissed by the CIT(A) vide orders dated 14/05/2024 and 16/05/2024, respectively. Also, the assessee was informed by his counsel that penalty order U/s. 271(1)(c) of the Act for AY 2013-14 had also been passed by the AO on 24/06/2025. The Ld. AR submitted that as no copy of the penalty order was uploaded on the income tax portal, therefore, the assessee had filed a grievance before the department on 26/06/2025 for making available a copy of the said order. The Ld. AR submitted that thereafter the assessee had as per the advice of his counsel filed an appeal against the order passed by the CIT(A) dismissing his quantum appeal, which by the time involved a delay of 332 days (wrongly mentioned in the condonation petition as 348 days).

The Ld. AR submitted that as the genesis of the delay involved in filing of the present appeal by the assessee as well as Chandra Sekhar Ravula vs. ITO the failure on his part to participate in the proceedings before the CIT(A) was primarily attributable to the reason that the notices intimating the fixation of the appeal and also the order passed by the CIT(A) dismissing the respective appeals for the AY 2013-14 and AY 2014-15, vide orders dated 14/05/2024 and 16/05/2024, respectively were not dropped in the email account that was specifically mentioned by the assessee in his Memorandum of Appeal ie., “Form-35” but were forwarded to the email account of his erstwhile Chartered Accountant viz., snsomani108@gmail.com, therefore, the same not only explained the delay in filing of the present appeal but also the bona fide reasons for the failure on his part to participate in the proceedings before the first appellate authority.

Per contra, the Learned Departmental Representative (for short “Ld. DR”) at the threshold objected to the seeking of the condonation of the delay involved in the present appeal by the assessee. Elaborating on his contention, the Ld. AR submitted that the lackadaisical conduct of the assessee regarding the income tax proceedings can safely be gathered from the fact that due to his failure to participate in the proceedings he was visited Chandra Sekhar Ravula vs. ITO with an ex-parte order under section 147 r.w.s 144 of the Act, dated 26/03/2022, which thereafter was followed by an ex-parte order by the CIT(A) who was constrained to dispose of the appeal in absence of any cooperation by the assessee who despite being put to notice on multiple occasions had failed to participate in the said proceedings. Also, the Ld. DR submitted that the callous and irresponsible conduct of the assessee had continued even at the stage of filing of the present appeal which involves a delay of 322 “Form-35” filed before the CIT(A) specifically opted for service of the notices/communication through email at his email ie., ravulashekar@yahoo.com, but as can be gathered from a perusal of the screen shots of the income tax portal account of the assessee, the notices i.e, dated 19/05/2023, 12/07/2023 and 26/04/2024 were only forwarded/dropped in the email account of snsomani108@gmail.com ie., the email account of the erstwhile Counsel of the assessee whose services at the relevant point of time were no more availed by him. Although, we cannot remain oblivion of the fact that the notice, dated 19/05/2023 (intimating the fixation of hearing of the appeal on 05/06/2023) was acted upon by the assessee and an adjournment for a period of four weeks was sought, but it is also a fact discernible from the record that neither of the subsequent notices i.e., dated 12/07/2023 and 26/04/2024 which thereafter had culminated Chandra Sekhar Ravula vs. ITO into the passing of the CIT(A) order on 16/05/2024 was ever dropped in the email account of the assessee.

Be that as it may, we are of the view that as the CIT(A) despite providing of a specific email Id of the assessee ie., ravulashekar@yahoo.com had failed to forward/drop the notices intimating the fixation of the appeal ie., notices dated 12/07/2023 and 26/04/2024 in the email account as was provided by the assessee, therefore, the latter had remained divested of a sufficient opportunity from participating in the proceedings before the First Appellate Authority and defend his case before him.

Also, as deposed by the assessee in his affidavit, dated 02/09/2025, as no order of the CIT(A) was forwarded/dropped in his email Id ie., ravulashekar@yahoo.com, and he had gathered about the dismissal of his appeal only based on SMS message that was subsequently received by him on 25/06/2025 regarding the imposition of penalty in his case for AY 2013-14, therefore, the same in itself explains the bona fide reasons which had resulted in filing of the present appeal before us. 21. Also, as observed by us herein above as the assessee for no fault on his part had been divested of an opportunity to participate in the proceedings before the CIT(A), therefore, we are unable to persuade ourselves to subscribe to the dismissal of his appeal by the first appellate authority vide an ex-parte order. Accordingly, in all fairness and in the interest of justice, we herein set aside the matter to the file of the CIT(A) with a direction to re- decide the appeal. Needless to say, the CIT(A) shall during the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes. 23. As the facts and issue remain the same, therefore, our order passed in the assessee’s appeal for AY 2013-14 in ITA No. 1099/Hyd/2025, shall apply mutatis mutandis for the purpose of disposing the present appeal.

Accordingly, the delay of 332 days involved in the assessee’s appeal for AY 2014-15 in ITA No. 1100/Hyd/2025 is condoned. Also, with same directions the matter is restored to the file of the CIT(A) for fresh adjudication after affording a reasonable opportunity of being heard to the assessee.

Resultantly, both the appeals of the assessee are allowed for statistical purposes