ARCOT AFSAR BEGUM,TADIPATRI vs. INCOME TAX OFFICER, WARD-1, ANANTAPUR

Per contra, the Learned Departmental Representative (“Ld. DR”) did not raise any serious objection to the prayer of the assessee.

We have carefully considered the submissions of both sides and perused the condonation petition along with the affidavit placed on record. On perusal of the same, we are satisfied that the assessee has shown a reasonable and bona fide cause for the delay in filing the appeal. It is well settled that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In view of the above facts and circumstances, and there being no serious objection from the Revenue, we condone the delay of 95 days in filing of the appeal. Accordingly, the appeal is admitted for adjudication on merits.

The assessee has raised the following grounds of appeal :

The brief facts of the case are that, the assessee is an individual who did not file the return of income for the A.Y. 2013-14. On the basis of information available, the Ld. Assessing Officer (“Ld. AO”) noticed that the assessee had deposited cash of Rs.29,92,000/- in his bank account during the year under consideration. Accordingly, the case of the assessee was reopened under section 147 of the Income Tax Act, 1961 (“the Act”) and notice under section 148 of the Act was issued to the assessee on 29.03.2021. During the reassessment proceedings, the assessee neither filed any return of income nor responded to the various statutory notices issued by the Ld. AO. Consequently, the Ld. AO proceeded to complete the assessment on best judgment basis and passed the order under section 147 read with section 144 read with section 144B of the Act on 28.03.2022, treating the cash deposits of Rs.29,92,000/- as unexplained money under section 69A of the Act.

Aggrieved with the order of Ld. AO, the assessee preferred appeal before the Ld. CIT(A). However, even before the appellate authority, the assessee failed to comply with the notices issued. As a result, the Ld. CIT(A) dismissed the appeal ex-parte.

Aggrieved with the order of Ld. CIT(A), the assessee has now come in appeal before the Tribunal. The Ld. AR submitted that the order of the Ld. CIT(A) suffers from violation of the principles of natural justice. He invited our attention to para no. 5 of the order of the Ld. CIT(A) to point out that only one notice dated 03.10.2024 was issued before dismissing the appeal. It was contended that sufficient opportunity of being heard was not provided to the assessee. The Ld. AR further submitted that since the assessee’s case had already remained non-prosecuted before the Ld. AO also, in the interest of justice, the matter may be restored to the file of the Ld. AO with one more opportunity to the assessee to substantiate his case.

Per contra, the Ld. DR supported the orders of the lower authorities. He submitted that, the assessee has been already provided adequate opportunity by the lower authorities. Hence, no further opportunity shall be provided to the assessee.

We have heard the rival submissions and perused the material available on record. It is undisputed that both before the Ld. AO as well as before the Ld. CIT(A), the assessee failed to properly prosecute the case. However, from para no.5 of the order of the Ld. CIT(A), it is evident that only one notice dated 03.10.2024 was issued before dismissing the appeal, which in our considered view does not satisfy the requirement of affording adequate and effective opportunity of being heard. It is a settled position that adherence to the principles of natural justice is a fundamental requirement of adjudication. Since the assessee did not get effective opportunity either before the Ld. CIT(A) and the Ld. AO has no opportunity to decide the issue on merits, we are inclined to restore the matter to the file of the Ld. AO. Accordingly, the impugned orders are set aside and the issue is remanded to the file of the Ld. AO with a direction to afford one more effective opportunity of being heard to the assessee. The assessee shall also be at liberty to file necessary evidence and explanation in support of his claim. At the same time, the assessee is directed to extend full cooperation in the assessment proceedings and not to seek unnecessary adjournments.

In the result, the appeal filed by the assessee is allowed for statistical purposes.