NAGARAJU KALIDAS,KARIMNAGAR vs. ITO., WARD-2, KARIMNAGAR

The A.O., observed that during the subject year there were cash deposits/credit entries in the bank account of the assessee aggregating to Rs. 33,41,820/-. As the assessee had failed to come forth with any explanation qua the source of the aforesaid cash deposits, therefore, the A.O was constrained to treat the entire amount as his unexplained money under Section 69A of the Act. Apart from that, the Assessing Officer made an addition of certain incomes that had surfaced in the course of the assessment proceedings, viz. (i). pension income: Rs. 3,32,709/-; and (ii). interest income: Rs. 31,210/-.

Accordingly, the Assessing Officer vide his order under Section 144 of the Act, dated 07/11/2019, determined the income of the assessee at Rs. 37,05,739/-.

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

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

Smt. S. Sandhya, the Learned Authorized Representative (in short, “AR”) for the assessee, at the threshold of hearing of the appeal, submitted that as the assessee was not validly put to notice about the hearing of the appeal by the CIT(A), therefore, he had remained divested of an opportunity to assail the additions made by the A.O. Elaborating further on her contention, the ld. AR submitted that though, the assessee had in the Memorandum of Appeal, filed before the CIT(A) i.e., “Form-35” specifically opted out of receipt of notices/communications through e-mail but despite that on neither of the 4 occasions any hard/physical copy of notice intimating the fixation of the appeal was ever served upon him. The ld. AR to substantiate her contention had taken us through “Form-35” which substantiated her aforesaid claim. The ld. AR on specifically being queried as to whether or not on either of the occasions any of the notices intimating the fixation of the appeal was ever physically served upon the assessee, answered in the negative. The ld. AR stated at Bar that no hard/physical notice intimating the fixation of the hearing of the appeal was ever served upon the assessee by the office of the CIT(A). The ld. AR submitted that as the CIT(A) had disposed of the appeal without affording any opportunity of being heard to the assessee, therefore, the matter in all fairness be restored to his file with a direction to him to re-adjudicate the same.

Per contra, the Learned Departmental Representative (in short “Ld. DR”) relied on the orders of the lower authorities. The Ld. DR submitted, that as the service of notices intimating the fixation of the appeal through physical mode had been dispensed with way back, therefore, the grievance of the assessee of not having been validly put to notice about the fixation of the appeal vide a hard/physical copy of the intimation was irrelevant.

We have thoughtfully considered the contentions advanced by the Learned Authorized Representatives of both the parties. Admittedly, it is a matter of fact borne from the record that the assessee had in his memorandum of appeal i.e., “Form-35” specifically opted out of receipt of notices/communications from the office of the CIT(A) through email. For the sake of clarity, the “Form-35” is culled out as under (relevant extract):

As the assessee had specifically opted out of service of notices/ communications from the office of the CIT(A) through email, therefore, we find substance in the ld. AR’s claim that in the absence of service of a hard/physical copy of the notice intimating the fixation of the hearing of the appeal before the CIT(A) on either of the 4 occasions, it could safely be concluded that the assessee was not validly put to notice. Although, it is the Ld. DR’s claim that the Department had way back done away with the service of hard/physical copies of notices, but, we are of the firm conviction that as the assessee-appellants in “Form-35” are still provided with an option as to whether or not the notices/ communications be sent to them on email, therefore, the aforesaid contention of the Department is bereft of any substance and does not merit acceptance.

Be that as it may, we are of the firm conviction that as the assessee appellant had not been validly put to notice about the fixation of the hearing of the appeal before the CIT(A) on either of the 04 occasions, i.e., on 21/05/2024, 05/07/2024, 18/10/2024 and 16/12/2024, therefore, he for no fault on his part had remained divested of a sufficient opportunity to assail the additions made by the A.O before the first appellate authority.

Considering the aforesaid facts, we are of a firm conviction that the matter in all fairness be restored to the file of the CIT(A) with a direction to re-adjudicate the same. 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 claim based on fresh documentary evidence, if any. The Ground of appeal No.2 is allowed for statistical purposes.

As we have set-aside the matter to the file of the CIT(A) for fresh adjudication, therefore, we refrain from adverting to and adjudicating the Grounds of appeal No(s). 3 and 4, which, thus, are left open.

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