SHAIK MAHABOOB BASHA,ANANTAPUR vs. ITO, WARD-1, HINDUPUR

During the course of assessment proceedings, the A.O. called for the bank statement of the assessee, i.e., SB Account No.91078619820 held with Andhra Bank, Branch: Pragathi Grameena Bank, Kadiri under Section 133(6) of the Act. On a perusal of the bank statement, it was observed by him that the assessee during the demonetization period had made cash deposits of Rs. 24,12,100/-. Further, the A.O. observed that the aggregate cash deposits made by the assessee in his aforementioned bank account during the subject year amounted to Rs. 25,02,100/-.

As the assessee had despite sufficient opportunity failed to respond to the notices that were issued by the A.O., therefore, the 4 Shaik Mahaboob Basha latter holding a conviction that the cash deposits made by him during the pre/post-demonetization period would have been sourced out of his trading activity, thus, did not draw any adverse inferences regarding the same. However, the A.O. held the balance amount of cash deposits made in the bank account during the demonetization period of Rs. 24,12,1000/- as having been sourced out of the assessee’s unexplained money u/s 69A of the Act.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). Ostensibly, as the assessee despite having been put to notice about the fixation of hearing of the appeal on five occasions i.e. on 25.07.2024, 13.08.2024, 29.08.2024, 25.09.2024 and 01.05.2024 had failed to respond to the same, therefore, the CIT(A) dismissed the appeal for want of prosecution and, therefore, finding no reason to interfere with the findings given by the A.O., upheld the addition of Rs. 24,12,100/- made by him u/s 69A of the Act.

The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

We have heard the learned Authorized Representatives of both parties, perused the orders of lower authorities and the material available on record.

Smt. S. Sandhya, Advocate, the learned Authorized Representative (for short “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the CIT(A) had grossly erred in law and on the facts of the case in summarily dismissing the appeal without adverting to the specific grounds based on which the impugned order was assailed by the assessee before him. Elaborating further on her contention, the Ld. AR submitted that as the assessee had remained oblivion about the ongoing proceedings before the CIT(A), therefore, he had for the said reason failed to participate in the proceedings before him. The Ld. AR submitted that though the assessee in his “Memorandum of Appeal” filed in “Form No.35” before the CIT(A) at Column No.17 specifically requested that the notices intimating the fixation of hearing of the appeal may also be sent at the address i.e. “8-320, Medara Street, Cherlopalli, Kadiri S.O., Ananthapur, Andhra Pradesh, India – 515591”, but on neither of the five occasions, any of the notice intimating the fixation of the appeal was served at the 6 Shaik Mahaboob Basha said address. The Ld. AR to fortify her contention has drawn our attention to the CIT(A)’s order wherein he has specifically stated that on all five occasions, the notice(s) intimating the fixation of hearing of the appeal were dropped in the email account that was provided in the ITBA portal account of the assessee. The Ld. AR submitted that though the assessee had remained under a bonafide impression that the notices intimating the fixation of the hearing of his appeal before the CIT(A) would be physically served upon him at the address provided in Column No. 17 of “Form 35”, but the same on all the five occasions is learnt to have been dropped in the e-mail account of his chartered accountant who had left the same unattended, resulting to the dismissal of the appeal vide an ex parte order. The Ld. AR submitted that as the assessee for bonafide reasons remaining unaware of the on-going proceedings before the CIT(A), had remained divested of an opportunity to participate in the proceedings and defend his case before him, therefore, the matter in all fairness be restored to his file with a direction to re-adjudicate the appeal after affording an opportunity of being heard to the assessee.

Per Contra, Shri Waseem UR Rehman, the learned senior Departmental Representative (for short “Ld. DR”) relied upon the orders of the lower authorities.

The Ld. D.R, submitted that as the notices intimating the fixation of hearing of the appeal were forwarded/dropped at the email account provided by the assessee in the ITBA portal account of the assessee, therefore, no infirmity qua the service of the notice did emanate from the record.

We have heard the learned Authorized Representatives of both parties on the aforesaid issue in the backdrop of the orders of the lower authorities. Admittedly, it is a matter of fact borne from the record that the assessee in his “Form No.35” had opted for service of notices/communications from the CIT(A) through email, and had provided the e-mail account of his chartered accountant, viz. cathabrez@gmail.com. However, we find that the assessee at “Column No.17” of the “Form 35” had specifically provided the aforementioned address, i.e. “8-320, Medara Street, Cherlopalli, Kadiri S.O., Ananthapur, Andhra Pradesh, India – 515591” to which the notices be sent by the office of CIT(A). We find that the 8 Shaik Mahaboob Basha CIT(A) had observed that on all five occasions, i.e. on 25.07.2024, 13.08.2024, 29.08.2024, 25.09.2024 and 01.05.2024, the notices were served at the email of the assessee that was provided in his ITBA Portal account.

We are of the firm conviction that, as the assessee had in the “Form 35” provided both the e-mail account i.e cathabrez@gmail.com, and also the address i.e. “8-320, Medara Street, Cherlopalli, Kadiri S.O., Ananthapur, Andhra Pradesh, India – 515591” for service of notices by the CIT(A)’s office, therefore, there was no justification for the latter to have bypassed the same and serve the notices intimating the fixation of the hearing of the appeal at the e-mail account provided in the assessee’s ITBA portal account.

Be that as it may, we are of the firm conviction that as the assesseee based on the address provided by him at Colum No. 17 of the “Form No. 35” i.e “8-320, Medara Street, Cherlopalli, Kadiri S.O., Ananthapur, Andhra Pradesh, India – 515591”, had though remained under a bonafide impression that the notices intimating the fixation of the hearing of the appeal before the CIT(A) would be 9 Shaik Mahaboob Basha physically served at the said address, but all the said notices were forwarded at the assessee’s e-mail account provided in the ITBA portal, which had gone unattended, therefore, there were justifiable reasons for his non-participation in the course of the proceedings before the CIT(A).

Apart from that, we find that the CIT(A), vide a non-speaking order, had dismissed the appeal and summarily approved the assessment order. There is no whisper in the CIT(A) order why the view taken by the A.O. was being approved by him. All that is stated by the CIT(A) is that as the assessee is a non-compliant and had failed to support his grounds based on any explanation or authentic documentary evidence, therefore, there was no reason for him to interfere with the findings given by the A.O. We are unable to approve such summary disposing of the appeal by the CIT(A) based on a non-speaking order. In our view, the CIT(A) ought to have adverted to the specific grounds based on which the impugned order of assessment was assailed by the assessee before him, and based on his independent reasoning after consulting the assessment record, ought to have adjudicated upon the same.

We thus, in terms of our aforesaid observations, in all fairness, and in the interest of justice, restore the matter to the file of CIT(A) with a direction to re-adjudicate the appeal afresh based on a speaking order. 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 his contentions based on fresh documentary evidence, if any.

Resultantly, the appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations.