VIDYAVATHI PALURU,HYDERABAD vs. INCOME TAX OFFICE, WARD-11(1), HYDERABAD

Succinctly stated, the assessee had filed her return of income for the AY 2010-11, dated 25/03/2011, declaring an income of Rs. 62,750/-. The return of income filed by the assessee was processed as such U/s. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment and notices U/s. 143(2) & 142(1) of the Act,

Ostensibly, as the assessee had failed to comply to the aforesaid notices, therefore, the Ld. AO, in the absence of the requisite details as were called for by him was constrained to proceed with and frame the assessment to the best of his judgment U/s. 144 of the Act, dated 25/03/2013, wherein he held the cash deposits of Rs. 19,40,315/- made by the assessee in his bank account during the subject year as having been sourced out of his unexplained money U/s. 69A of the Act. Also, the unaccounted interest income on the aforesaid bank account of Rs.20,000/- was also added to the assessee’s returned income. Accordingly, the AO vide his order passed U/s. 144 of the Act dated 25/03/2013 determined the income of the assessee at Rs. 20,03,065/-.

Aggrieved, the assessee carried the matter in appeal before the CIT(A), but without success. For the sake of clarity, the observations of the CIT(A) are culled out as under:

Apart from that, the Ld. AR submitted that the CIT(A) had grossly erred in law and facts of the case in summarily dismissing the appeal filed by the assessee. Elaborating on his contention, the Ld. AR submitted that the hearing of the appeal was fixed by the CIT(A) on three occasions i.e., on 19/01/2024; 19/02/2024 and 23/01/2024. The Ld. AR submitted that on the first date i.e., on 19/01/2024, the assessee had filed an application seeking adjournment. Thereafter, the assessee had on 19/02/2024 further filed/uploaded his written submissions, affidavit,

Alternatively, the Ld. AR submitted that as the AO in the present case had failed to serve upon the assessee a notice U/s. 143(2) of the Act, which was the very foundation for valid assumption of juri iction for framing the assessment, therefore, the assessment on the said count itself was liable to be struck down.

The Ld. D.R, on being queried, that now when the assessee on the various dates on which the hearing of the appeal was fixed before the CIT(A) had filed his written submissions along with supporting documentary evidence, then on what basis he had dismissed the assessee’s appeal for the reason that the assessee had neither responded to the notices nor filed any written submissions, the Ld. Sr. DR failed to come forth with any reply.

We have thoughtfully considered the facts involved in the present case in the backdrop of the contentions advanced by the Learned Authorized Representatives of both the parties.

Admittedly, as it is a matter of fact borne from the record, that the assessee had in compliance with the notices intimating the fixation of the appeal before the CIT(A) i.e., on 19/02/2024 and 23/01/2025, filed his written submissions, supporting documentary evidence, affidavit etc., on 19/02/2024, 20/02/2024 and 21/01/2025, Pages 2 to 4 of the APB, therefore, we find it incomprehensible that on what basis the CIT(A) had 10 Vidyavathi Paluru vs. ITO observed that the assessee, despite having been afforded multiple opportunities, neither responded to the notices nor filed any written submissions. We are of the firm conviction that in the backdrop of the facts discernible from the record, the observation of the CIT(A), which had formed the foundation for the dismissal of the present appeal, suffers from a grave infirmity. As the assessee had furnished the written submissions, affidavit, supporting documentary evidence etc. in the course of the proceedings before the CIT(A), therefore, there was no justification for him to have discarded the said documents and dismissed the appeal based on his wrong observations. As the order passed by the CIT(A) suffers from a grave infirmity, which by no means but falls within the meaning of blatant violation of the basic principles of natural justice, i.e., condemning the assessee appellant unheard, i.e., without considering his submissions and supporting documentary evidence, therefore, we are unable to persuade ourselves to subscribe to the same. Accordingly, we herein set-aside the order passed by the CIT(A) and restore the matter to his file with a direction to re-decide the appeal based on a speaking and reasoned order after taking due cognizance of the material available on record. Needless to say, the CIT(A) shall, in the course of the set-aside proceedings, afford a reasonable opportunity of being heard to the assessee, who shall remain at liberty to substantiate

िनधाŊįरती/The Assessee : Vidyavathi Paluru, Flat No. 104, Tulip Tower, L & T Serene County, Near Urdu University, Gachibowli, Serilingampalli Mandal, Telangana-500032. 2. राजˢ/ The Revenue : Income Tax Office, Ward-11(1), Range-11, Signature Towers, Kondapur, Hyderabad, Telangana-500084. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. िवभागीयŮितिनिध, आयकरअपीलीयअिधकरण /DR,ITAT, Hyderabad. 5. The Commissioner of Income Tax 6. गाडŊफ़ाईल / Guard file