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Income Tax Appellate Tribunal, Hyderabad ‘SMC’ Bench, Hyderabad
Before: Shri Rama Kanta Panda
Per Shri Rama Kanta Panda, A.M. This appeal filed by the assessee is directed against the ex-parte order dated 22.08.2022 of Learned Commissioner of Income Tax (Appeals)-11, Hyderabad relating to AY 2019-20.
The grounds of appeal by the assessee read as under:-
1. On the facts and in the circumstances of the case, the order of ld. CIT(A) is erroneous and unsustainable in law apart from being passed in violation of principles of natural justice. The ld. CIT(A) failed to appreciate that in response to notice dated 27.02.2022 and 09.03.2022 request for additional time was filed, and other notices issued on 19.04.2022, 31.05.2022, 29.06.2022 and 19.07.2022 were not served on the Appel1ant and therefore could not put forth his case.
2. The ld. CIT (A) erred in sustaining the addition of Rs.10 lakhs as unexplained money under section 69A of the Act. 3. Without prejudice to the above ground, the ld. CIT (A) erred in not granting the benefit of telescoping of the income earned declared by him during the previous year relevant to Asst. year under consideration.
2 ITA 415/Hyd/2022
Facts of the case, in brief, are that the assessee is an individual and engaged in the business of construction and civil contracts. He is also the partner of M/s. Siddhi Ganesha Developers. He filed his return of income belatedly on 30.11.2020 declaring total income of Rs.5,36,000/-, which consisted of income from salary at Rs.2 lakh and profit u/s.44AD from construction activity at Rs.3,36,000/-. During the course of assessment proceedings, the AO noted that during the course of vehicle checking at check post established at Thorrur and Kesmudram X Road on 09.10.2018 vehicle bearing No.TS 03 EL 1116 was intercepted and cash of Rs.10 lakhs was found being carried by the assessee. The assessee revealed that he is the managing partner of M/s. SiddhivGanesha Developers, Hanmakonda, Warangal and the amount was being carried out to make payments to labourers and for purchase of construction material. However, the assessee could neither produce the documentary evidence nor any satisfactory explanation in support of the source of cash of Rs.10 lakhs. The assessee was summoned u/s. 131 of the I.T.Act on 16.10.2018 and his statement was recorded. The assessee in his statement submitted that he could not produce any books of accounts. In absence of any documentary evidence to explain the source of cash of Rs.10 lakhs, warrant of authorization u/s. 132A of the I.T.Act, 1961, dated 26.10.2018 was issued and the amount of Rs.10 lacks was seized.
3.1 During the course of assessment proceedings, despite notice u/s. 143(2) of the I.T.Act served on the assessee on 30.12.2020, there was no response form the assessee for which again notice u/s. 142(1) of the Act calling for information was served on the assessee on 15.02.2021. The assessee was also specifically asked in the notice to produce documentary evidence to prove the 3 ITA 415/Hyd/2022 source of cash of Rs. 10 lakhs. Since there was no response form the side of the assessee, the AO made addition of the same to the total income of the assessee u/s. 69Aof the I.T.Act.
Since the assessee did not appear before the ld.CIT(A) despite number of opportunities granted, he sustained the addition made by the AO in the ex-parte order passed by him.
Aggrieved with such order of the ld.CIT(A), the assessee is in appeal before the Tribunal.
The ld. Counsel for the assessee, at the outset, submitted that the last four notices of the ld.CIT(A) were never received by the assessee. He submitted that the ld.CIT(A) has passed the ex-parte order and requested the Bench to restore the matter to the file of the ld.CIT(A) to give one last opportunity to the assessee to substantiate his case in the interest of justice.
The ld. DR on the other hand strongly objected to the request of the assessee for restoring the matter to the file of the ld. CIT(A). Referring to the conduct of the assessee during the assessment proceedings and before the ld.CIT(A) he submitted despite opportunities granted by both the lower authorities, the assessee never bothered to appear and explain his case. He submitted that since the ld.CIT(A) has passed a speaking order on merit, therefore, the same should be upheld in absence of any contrary material brought before the Tribunal. He, accordingly submitted that the grounds raised by the assessee should be dismissed.
I have heard the rival arguments made by both the sides, perused the orders of the AO and ld.CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find the AO in the instant case made
4 ITA 415/Hyd/2022 addition of Rs.10 lakhs u/s.69A on the ground that assessee could not explain the source of cash of Rs.10 lakhs which was found in possession of the assessee during the vehicle check at Thorrur Check post, Telangana and which was subsequently seized by the investigation wing for want of source for the same. Despite number of opportunities granted by the ld.CIT(A), the assessee did not appear before the ld.CIT(A) for which he passed an ex-parte order sustaining the addition made by the AO. It is the submission of the ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate the cash so found amounting to Rs. 10 lakhs during the police check. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the ld.CIT(A) with a direction to grant one last opportunity to the assessee to substantiate his case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the ld.CIT(A) without seeking any adjournment under any pretext failing which, the ld.CIT(A) is at liberty to pass appropriate order as per law. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purpose.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the Open Court at the time of hearing itself on 29th September, 2022.