SYED ZUBAIR PASHA,TANDUR vs. ITO., WARD-1 , VIKARABAD

Facts of the case, in brief, are that, the appellant is an individual and engaged in the business of stone trading activity. Re-assessment proceedings u/s 147 of the Income Tax Act, 1961 were initiated in the case of the appellant by issuing notice u/s Page 1 of 6 148 of the Act dated 30.03.2021 for verification of the details with respect to the source of cash deposits of Rs. 24,20,224/- in the bank accounts held by the appellant and also with respect to the source for purchase of immovable property. However, the return of income could not be filed by the assessee for AY 2017-18, due to lack of awareness of the proceedings u/s 148 of the IT Act, which are held on faceless mode for the first time. Even though the return of income could not be filed due to the lack of awareness of the proceedings u/s 148 of the Act, the appellant had furnished a computation total income at Rs. 4,29,040/- by treating the cash deposits of Rs. 24,20,224/- as gross receipts from the business and an amount of Rs. 4,84,045/- being 20 percentage of the gross receipts was declared as presumptive income in accordance with the provisions of section 44AD of the Income Tax Act, 1961. The appellant had voluntarily paid the taxes accordingly amounting to Rs. 23,789/- arrived based on the computation in accordance with the provisions of section 44AD of the Act. The Assessing Officer rejected the computation furnished by the appellant. However, the AO without considering the above facts has passed an erroneous Assessment Order by making an additions on account of cash deposits of Rs. 24,20,224/- as unexplained cash credit u/s 68 of the Act and also the purchase of immovable properties of Rs. 11,58,000/- as unexplained investment u/s 69 of the Income-tax Act,1961. Even though the Assessing Officer had rejected the computation furnished by the appellant, while assessing the total income u/s 147 rws 144B of Page 2 of 6 the Act considered the income as per the computation furnished by the assessee and made the addition of the Cash Deposits of Rs. 24,20,224/- and also the addition of Rs. 11,58,000/- to the total income arrived as per the computation furnished by the appellant.

Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT (A). The learned CIT (A) issued notices u/s 250 of the Act to the appellant electronically in E-proceeding/ITBA facility. The learned CIT (A) noted from the appeal record that the appellant was given ample opportunities to present the case by way of submission of details along with supporting documents and evidences. The learned CIT (A) also issued notices as many as 5 times, but the assessee did not comply with the notices. Thus, the learned CIT (A) dismissed the appeal of the assessee.

Aggrieved by the order of the learned CIT (A), the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee submitted that due to lack of awareness of the proceedings u/s 148 of the IT Act, which are held on faceless mode for the first time, the assessee could not appear before the learned CIT (A) nor filed any written submission/details. It is the prayer of the learned Counsel for the assessee that the assessee may be given another opportunity to Page 3 of 6 submit all the requisite details before the learned CIT (A) to substantiate his case.

The learned DR, on the other hand, supporting the orders of the authorities below submitted that the assessee failed to appear before the authorities and did not comply with the statutory notices issued by both the Assessing Officer and the learned CIT (A). Thus, he 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 return of income could not be filed by the assessee for AY 2017-18, due to lack of awareness of the proceedings u/s 148 of the IT Act, which are held on faceless mode for the first time. It is a fact that even though the return of income could not be filed due to the lack of awareness of the proceedings u/s 148 of the Act, the appellant had furnished a computation total income at Rs. 4,29,040/- by treating the cash deposits of Rs. 24,20,224/- as gross receipts from the business and an amount of Rs. 4,84,045/- being 20 percentage of the gross receipts was declared as presumptive income in accordance with the provisions of section 44AD of the Income Tax Act, 1961. We find the orders of the Assessing Officer and the learned CIT (A) were ex-parte due to non-appearance of the assessee. Considering the facts and circumstances of the case and in the interest of Page 4 of 6 justice, we set aside the issue to the file of the learned CIT (A) with a direction to give one more opportunity to the assessee so as to enable the assessee to file all the requisite details/evidences before the learned CIT (A) to substantiate his case. Since the assessee failed to comply with the statutory notices issued by the authorities below, we levy a charge of Rs.2000/- on the assessee and the assessee is hereby directed to pay Rs.2000/- at the Telangana State Legal Aid Authorities at the Hon'ble Telangana High Court within one month from the date of this order and submit the payment slip with the Registry. Needless to say, that the assessee shall submit all the requisite details before the learned CIT (A) as and when called for without seeking any adjournment. we order accordingly.