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Facts
The assessee's assessment was reopened under Section 147, and an addition of Rs.42,50,985/- was made under Section 68 for an unexplained loan given to Smt. Kiran Kumari Tadakamala. The CIT(A) dismissed the assessee's appeal in-limine due to non-appearance and failure to submit details.
Held
The Tribunal noted that the CIT(A) dismissed the appeal in-limine without discussing merits and the assessee claimed improper service of notices. Consequently, the Tribunal remanded the matter back to the CIT(A) to provide the assessee with another opportunity of hearing on merits, subject to a nominal cost of Rs.5,000/- to be paid to the Prime Minister National Relief Fund or PM Cares Fund.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in-limine without addressing the merits of the Section 68 addition, given the assessee's claim of improper notice service.
Sections Cited
147, 148, 144, 68, 131
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri Ravish Sood
(निर्धारण वर्ा/Assessment Year: 2014-15) Thota Raghu Buchanna Vs. Income Tax Officer Hyderabad Ward-15(2) [PAN :AFTPT6248K] Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri P.Vinod, AR रधजस् व द्वधरध/Revenue by: Shri Gurpreet Singh, DR सुिवधई की तधरीख/Date of Hearing: 24/06/2025 घोर्णध की तधरीख/Date of 25/06/2025 Pronouncement: आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 31.01.2025 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], National Faceless Appeal Centre, Delhi, pertaining to A.Y.2014-15.
The brief facts of the case are that the assessee had filed his original return of income for the A.Y.2014-15 on 22.12.2014, declaring total income of Rs.9,93,210/-. The assessment has been subsequently reopened u/s 147 of the Income Tax Act, 1961 (“the Act”) on the ground that as per information available on record, it is seen that the assessee had given a loan of Rs.42,50,985/- to Smt. Kiran Kumari Tadakamala, Proprietor, RV Bharat Gas Agencies, Hyderabad. The receipt of loan was confirmed by Smt.Kiran Kumari Tadakamala in a sworn statement recorded u/s 131 of the Act. The assessee stated that the source of funds for giving loan were out of his personal savings, hand loans taken and earnings of his wife. Notice u/s 148 dated 18.09.2018 was issued and served on the assessee. The assessee did not file return of income in response to 148 notice. Since the assessee neither filed his return of income nor explained the source for the loan given to Smt.Kiran Kumari Tadakamala, the AO had completed the assessment u/s 144 r.w.s. 147 of the Act and determined the total income at Rs.52,44,195/- by making additions of Rs.42,50,985/- u/s 68 of the Act as unexplained cash credits.
Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee neither appeared nor filed any details, which is evident from the ex-parte appellate order passed by the Ld.CIT(A), where the case was posted for hearing on number of occasions, but no response from the assessee. Therefore, the Ld.CIT(A) dismissed the appeal filed by the assessee in-limine and upheld the additions made by the AO towards loan u/s 68 of the Act.
Aggrieved by the Ld.CIT(A) order, the assessee is now in appeal before the Tribunal.
The Ld.Counsel for the assessee, Shri P.Vinod, Advocate, referring to the notices issued by the Ld.CIT(A) submitted that the first notice issued by the Ld.CIT(A) on 06.08.2020 was served on the assessee and the authorized representative to the e-mail address provided in Form No.35. Further, subsequent notices issued by the Ld.CIT(A) on 27.01.2021 and 24.09.2024, were issued only to the assessee to the e-mail ID, akreddyfca@gmail.com, however, copy was not marked to e- mail ID provided in Form No.35 and because of this, the assessee did not notice the notices issued by the Ld.CIT(A). Since the assessee did not get proper opportunity of hearing before the Ld.CIT(A), the matter may be remanded back to the Ld.CIT(A) to give another opportunity of hearing to the assessee.
The Ld.Sr.AR, Shri Gurpreet Singh, on the other hand, supporting the order of the Ld.CIT(A) submitted that the assessee was non cooperative at all stages of proceedings, which is evident from the ex-parte assessment order and ex- parte appellate order passed by the authorities. Therefore, he submitted that there is no error in the order passed by the Ld.CIT(A) and thus, the order of the Ld.CIT(A) should be upheld.
We have heard both the parties, perused the material on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the assessment proceedings before the AO was ex-parte. The assessee neither appeared nor explained the transaction with Smt.Kiran Kumari Tadakamala. Before the Ld.CIT(A), the assessee did not respond to any of the notices issued by the Ld.CIT(A) to explain his case. Therefore, the Ld.CIT(A) dismissed the appeal filed by the assessee in-limine for non-prosecution. However, fact remains that even in case of ex-parte proceedings for non-prosecution, the appellate authority should decide the issue on merits on the basis of material available on record. In the present case, the Ld.CIT(A) did not discuss the issue on merits with regard to the additions made by the AO towards loan u/s 68 of the Act. Since the assessee has explained the reasons for not appearing before the Ld.CIT(A), because of non-service of notice to the correct e- mail address provided in Form No.35 and further the Ld.CIT(A) did not discuss the issues on merits, in our considered view, the matter needs to go back to the file of the Ld.CIT(A) for reconsideration. Thus, we set aside the order of the Ld.CIT(A) and restore the issue back to the file of the Ld.CIT(A) with a direction to reconsider the issue after providing another opportunity of hearing to the assessee to explain his case. Needless to say, the assessee shall furnish relevant details in support of his claim as and when the case is posted for hearing. Further, the assessee is also directed to pay a nominal cost of Rs.5000/- for showing lethargic approach before lower authorities and the cost as directed shall be paid to Prime Minister National Relief Fund or PM Cares Fund and produce necessary evidence to the Registry within 15 days from the date of receipt of this order.
In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 25th June, 2025.