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Facts
The assessee, Ms. Parijatham Ravula, filed her ROI for AY 2017-18. During scrutiny, the AO found a cash deposit of Rs. 37,50,000/- during demonetisation, which was treated as unexplained money under Section 69A and added to her income. The CIT(A) dismissed the assessee's appeal ex-parte due to non-compliance with notices.
Held
The ITAT set aside the ex-parte order of the CIT(A) and remanded the matter back for fresh adjudication. The Tribunal ruled that the assessee should be granted another opportunity to present her case on merits, considering the explanation that her previous counsel had passed away, thereby upholding the principles of natural justice.
Key Issues
The key legal issues were whether the ex-parte dismissal by CIT(A) violated principles of natural justice and if the assessee deserved another opportunity to explain cash deposits due to the unfortunate demise of her counsel.
Sections Cited
69A, 143(2), 143(3), 250, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
Ms. Parijatham Ravula, Dy. Commissioner of Income Tax, Vs. Circle 5(1), Hyderabad. Hyderabad. PAN:AFYPR5544K (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri T. Chaitanya Kumar, Advocate रधजस् व द्वधरध/Revenue by:: Shri Gurpreet Singh, SR-DR सुिवधई की तधरीख/Date of hearing: 05/06/2025 घोर्णध की तधरीख/Pronouncement: 10/06/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.:
This appeal is filed by Ms. Parijatham Ravula (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 01.05.2024 for the A.Y. 2017-18.
The assessee has raised the following grounds of appeal :
The brief facts of the case are that the assessee is an individual filed her Return of Income (“ROI”) for the A.Y. 2017-18 on 31.10.2017 declaring total income of Rs.24,41,080/-. The case of the assessee was selected for complete scrutiny and notice u/s. 143(2) of the Income Tax Act, 1961 (“the Act”) was issued on 09.08.2018 by the Learned Assessing Officer (“Ld. AO”).
3.1 During the scrutiny proceedings, the Ld. AO observed that, the assessee had deposited cash of Rs.37,50,000/- in her bank account during the demonetisation period. The Ld. AO called explanation qua the cash deposit from the assessee. However, the Ld. AO was not satisfied with the explanation provided by the assessee and treated the same as unexplained money u/s. 69A of the Act. The Ld. AO accordingly added Rs.37,50,000/- in the hands of the assessee and completed the assessment u/s. 143(3) of the Act on 30.12.2019 determining the total income at Rs.61,91,080/-.
Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). However, during the appellate proceedings, the assessee did not respond to the notices issued by the Ld. CIT(A). Consequently, the appeal was decided ex-parte and dismissed, thereby affirming the assessment order passed by the Ld. AO.
Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us. The learned Authorised Representative (“Ld. AR”) submitted that the assessee could not respond to the notices issued by the Ld. CIT(A) due to the unfortunate demise of her earlier counsel, and that the default was neither deliberate nor intentional. The Ld. AR accordingly prayed that the matter may be remanded back to the file of the Ld. CIT(A) to provide one more opportunity to the assessee to present her case on merits and furnish the relevant documents and evidence in support of her explanation regarding cash deposits.
Per contra, the learned Departmental Representative (“Ld. DR”) opposed the plea for remand. It was submitted that adequate opportunity had already been provided by the Ld. CIT(A), and that the assessee failed to avail the same.
The Ld. DR accordingly argued that, the assessee does not deserve a fresh opportunity.
We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. It is a settled principle of law that no assessee should be condemned unheard and every litigant must be given a fair and reasonable opportunity to represent her case. In the present case, we find that the appeal before the Ld. CIT(A) was dismissed without adjudication on merits solely due to non-compliance with hearing notices. The explanation offered by the Ld. AR that the non-compliance occurred due to the death of the earlier counsel appears to be plausible and reasonable.
7.1 In view of the above and to uphold the principles of natural justice, we are of the considered opinion that one more opportunity should be granted to the assessee to present her case before the Ld. CIT(A). Accordingly, we set aside the order of the Ld. CIT(A) and restore the matter to the file of Ld. CIT(A) with a direction to adjudicate the appeal afresh after giving due opportunity to the assessee to file relevant documents and evidence and after affording a reasonable opportunity of being heard. 7.2 We make it clear that the assessee shall co-operate in the proceedings before the Ld. CIT(A) and shall not seek undue adjournments, failing which the Ld. CIT(A) shall be at liberty to proceed in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 10th June, 2025.