Loading judgment…
Facts
The assessee, a firm, filed its income tax return for AY 2017-18, declaring Rs. 4,74,830/-. The Assessing Officer selected the case for scrutiny and, due to non-response from the assessee, completed an ex-parte best judgment assessment under Section 144, making additions totaling Rs. 1,41,73,790/- related to cash deposits and other credits, which were taxed under Section 115BBE. The CIT(A) also passed an ex-parte order, sustaining the additions, as the assessee failed to appear or file details.
Held
The Tribunal found that the assessee did not receive a proper opportunity of hearing before the CIT(A) because notices were sent to an incorrect email address. Given that the additions included various bank credits requiring verification, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer for a de novo assessment, directing that a fresh opportunity be given to the assessee.
Key Issues
Whether the ex-parte assessment and appellate orders were valid given the assessee's claim of non-receipt of hearing notices, and if the various bank credits and cash deposits required further verification by the Assessing Officer.
Sections Cited
143(2), 142(1), 144(1)(b), 144, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.566/Hyd./2025 Assessment Year 2017-2018 Malkari Maheswari Bai The Income Tax Officer, KURNOOL – 518 002 vs. Ward-2, PAN AOBPB5251K KURNOOL – 518 001. (Appellant) (Respondent) For Assessee : CA, KA Sai Prasad And CA, P V Raghavendra Kumar For Revenue : Sri Gurpreet Singh, Sr. AR Date of Hearing : 23.07.2025 Date of Pronouncement : 25.07.2025 ORDER PER MANJUNATHA G. :
The above appeal has been filed by the Assessee against the Order dated 09.01.2025 of the learned CIT(A)- National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2017-2018.
Brief facts of the case are that, the assessee, is a Firm, filed return of income for the assessment year 2017- 2018 on 19.09.2017, declaring total income at 2 ITA.No.566/Hyd./2025 Rs.4,74,830/-. The case was selected for scrutiny under CASS and notice u/sec.143(2) and 142(1) of the of the Income Tax Act, 1961, even dated has been issued along with relevant questionnaire and called-upon the assessee to file evidences. In response, the assessee has not filed any details. Therefore, the Assessing Officer issued a show cause notice as per the provisions of sec.144(1)(b) of the Act and called-upon the assessee to explain as to why the assessment shall not be completed in terms of section 144 to his best Judgment. Once again, there is no response from the assessee. Therefore, the Assessing Officer on the basis of material available on record, completed the assessment to his best Judgment in terms of sec.144 of the Act and determined the total income of Rs.1,41,73,790/- by making addition towards cash deposit during the demonetization period for Rs.42,98,500/- and addition towards cash and other credits before demonetization period for Rs.94,00,461/- and brought to tax u/sec.115BBE of the Income Tax Act, 1961.
3 ITA.No.566/Hyd./2025 3. Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee neither appeared nor filed any details which is evident from para-4 of learned CIT(A)’s order where the case has been listed for hearing on 6 occasions right from 29.01.2021 to 12.12.2024, but, no response from the assessee. Therefore, the learned CIT(A) passed ex-pate appellate order and sustained the additions made by the Assessing Officer towards cash deposit during the demonetization period and other credits and dismissed the appeal filed by the assessee.
Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
CA, K A Sai Prasad along with CA, P V Raghavendra Kumar, referring to Form-35 filed by the assessee before the learned CIT(A) submitted that, the assessee has communicated in Form-35 at column no.17 that notice of hearing may be sent to the email ID umakanth_knl@rediffmail.com. However, the learned CIT(A) has issued notices to various other emails. The said notices
4 ITA.No.566/Hyd./2025 issued through emails were not received by the assessee. Therefore, the assessee could not appear before the learned CIT(A) to explain it’s case. Further, the Assessing Officer has made additions towards cash deposit during the demonetization period and also other bank credits, even though, there are various other credits and refund of advances from customers and same needs to be explained to the Assessing Officer. Therefore, he submitted that, the matter may be remitted to the file of Assessing Officer to give another opportunity of hearing to the assessee to explain it’s case.
Sri Gurpreet Singh, learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the Assessing Officer has given ample opportunities to the assessee to file relevant evidences. The learned CIT(A) had also given number of opportunities, but, the assessee failed to file any evidences. Now the assessee claims that notice issued by the learned CIT(A) to a different email address were not received by the assessee and because of this reason, the assessee could not 5 ITA.No.566/Hyd./2025 file any evidences, but, the fact remains that, the learned CIT(A) issued notices to the email ID given by the appellant in Form-35 column-17, which is evident in the list submitted by the assessee. Therefore, there is no merit in the arguments of the assessee and thus, the appeal filed by the assessee should be dismissed.
We have heard both the parties, perused the material on record and the orders of the authorities below. Admittedly, the assessment proceedings before the Assessing Officer is ex-parte, because, the assessee neither appeared nor filed any details. Therefore, the Assessing Officer passed best judgment assessment in terms of sec.144(1) of the Income Tax Act, 1961. Although, the assessee has filed appeal before the learned CIT(A), but, did not get an opportunity of hearing because, the assessee claims that, the notice issued by the learned CIT(A) were sent to a different email-ID, even though, the assessee has furnished email-ID umakanth_knl@rediffmail.com in column-17 of Form-35. Since the assessee did not get an opportunity to explain it’s case before the lower authorities
6 ITA.No.566/Hyd./2025 and further, the assessee claims that, the Assessing Officer has made additions towards credits in the bank account which are not only cash deposit, but, also various other credits including refund of advances and this fact needs to be verified by the Assessing Officer. Therefore, we are of the considered view that, the issue needs to go back to the file of Assessing Officer for further verification. Thus, we set- aside the order of the learned CIT(A) and restore the issue back to the file of Assessing Officer and direct the Assessing Officer to reconsider the issue ‘de novo’ in accordance with law, after providing an opportunity of hearing to the assessee. Needless to say, the assessee shall furnish relevant details as and when the case is called for hearing.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 25.07.2025.