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Facts
The assessee, an individual, failed to file a return of income for AY 2016-17 despite high-value financial transactions. The AO initiated assessment proceedings under Section 147, issuing notices which were not responded to by the assessee. The CIT(A) also dismissed the assessee's appeal for non-compliance.
Held
The Tribunal set aside the appeal to the file of the CIT(A) with a direction to grant one final opportunity to the assessee. A penalty of Rs. 2000/- was imposed on the assessee for non-compliance with statutory notices.
Key Issues
Whether the assessment proceedings and notices issued were valid, and whether the assessee's non-compliance warrants a dismissal or a further opportunity for hearing.
Sections Cited
147, 148, 148A, 69A, 143(3), 144B, 271(1)(c), 271F
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Income Tax Appellate Tribunal, Hyderabad ‘A‘ Bench, Hyderabad
Before: Shri Laliet Kumar
(िनधा�रण वष�/Assessment Year: 2016-17) Shri Sankarlal Naik Vs. Income Tax Officer Karamsi, Hyderabad Ward 8(1) PAN:ANCPK0584A Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri Mohd. Afzal, Advocate राज� व �ारा/Revenue by:: Shri Srinath Sadanala, DR सुनवाई की तारीख/Date of hearing: 03/02/2025 घोषणा की तारीख/Pronouncement: 03/02/2025 आदेश/ORDER Per Manjunatha, G. A.M This appeal filed by the assessee is directed against the order dated 03/10/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2016-17.
The assessee has raised the following grounds: “1. The order of the learned Commissioner of Income Tax (Appeals) is against the law, weight of evidence and probabilities of case.
2. The learned Commissioner ought to have appreciated that the notice u/s 148 was issued by jurisdictional Assessing Officer that is ITO Ward-17(1), Hyderabad, whereas, as per the CBDT Circular the same should have been issued by the AO of faceless centre. Therefore, the notice by the JAO is an invalid notice as held in the case of Kanakanala Ravinder Reddy Vs ITO in WP No.25903/2022, dt: 14.09.2023, therefore, an order is on the foundation of an invalid notice is to be held as null and void.
3. The learned Assessing Officer has not issued notice u/s 148A(b) as seen from the IT Portal, therefore, order u/s 148A(d) and notice u/s 148 are in violation of provisions u/s 148A of the IT Act, therefore, the notice u/s 148 is to be held invalid, therefore, an order is on the foundation of an invalid notice is to be held as null and void.
4. The learned Commissioner ought to have appreciated that the deposits aggregating to Rs.3,56,91,473/- are partly transactions of the assessee from the real estate business, in which assessee is only entitled for commission and partly from agricultural income etc., therefore, the learned Commissioner erred in confirming the order of the AO, wherein, income is determined at Rs.3,56,91,473/- u/s 69A of the IT Act. 5. The learned Assessing Officer ought to have estimated a reasonable profit from the business transactions of the assessee as the entire credits cannot be considered as income of the assessee without considering the debits, therefore, the learned Commissioner erred in confirming the order of the AO, wherein, income is determined at Rs.3,56,91,473/- u/s 69A of the IT Act. 6. The learned Assessing Officer applied the provisions of section 69A to determine total income of the assessee at Rs.3,56,91,470/-, whereas, in the facts and circumstances the provisions of section 69A are not attracted in the case of assessee, therefore, the learned Commissioner erred in confirming the order of the AO wherein, total income is determined at Rs.3,56,91,473/- u/s 69A of the IT Act. 7. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary.”
Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income for relevant year. As per the Risk Management Strategy, information in this case is flagged on Insight Portal under the category ‘Non-filer Monitoring System (NMS)’. As per information, the Assessing Officer noticed that the assessee had made total credits of Rs. 3,56,91,475/- in his bank account no. 3217309998 and made cash deposit of Rs. 9,90,000/- in his bank account maintained with Central Bank of India, Gachibowli Branch during the F.Y. 2015-16 relevant to A.Y 2016-17. Since, the assessee has undergone high value financial transactions under his PAN, but no return of income was filed originally, so the transactions has not been disclosed by the assessee. Therefore, the Assessing Officer initiated assessment proceedings u/s 147 of the I.T. Act, 1961 and notice u/s 148 was issued to the assessee on 21.03.2023 through ITBA portal after recording the reasons as prescribed u/s 147 and after taking prior approval of the Pr. Chief Commissioner of Income Tax, AP & Telangana. In response, the assessee has not filed his return of income. Since the assessee has not responded to the various notices issued to the assessee, the Assessing Officer completed the assessment and assessed the income of the assessee at a total income of Rs. 3,56,91,470/- u/s 147 r.w.s. 143(3) r.w.s. 144B of the Income Tax Act, 1961. Penalty proceedings u/s 271(1)(c) and 271F of the Income-tax Act 1961 was also initiated separately.
Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT (A) who also dismissed the appeal of the assessee for non-compliance of the notices issued on many occasions.
5., The learned Counsel for the assessee submitted that he could not gather the requisite information from the assessee and prayed for another opportunity of being heard before the learned CIT (A).
On the other hand, the learned DR submitted that the assessee neither appeared or submitted any written submissions either before the Assessing Officer or before the learned CIT (A) which is clear violation and non-compliance to the statutory notices issued by the Department. He thus, submitted that the appeal of the assessee be dismissed.
We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. We find that the assessee, neither appeared nor filed any written submission before the authorities below to substantiate his case. The assessee also did not comply with the statutory notices issued by the Assessing Officer and the learned CIT (A). The learned Counsel for the assessee submitted more time to gather the requisite details/evidences from the assessee. Considering the facts and circumstances of the case and in the Page 4 of 5 interest of natural justice, the appeal of the assessee is set aside to the file of the learned CIT (A) with a direction to give one final opportunity to the assessee to submit the requisite details/ evidences to substantiate his case. Since the assessee did not comply to the statutory notices issued by the Revenue authorities, we levy a charge of Rs.2000/- on the assessee and the assessee is directed to pay Rs.2000/- at the Telangana State Legal Aid Authorities at the Hon'ble Telangana High Court and submit the payment slip with the Registry within one month from the date of this order. We order accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes.