MANDALA SRIRAMACHANDRA MURTHY,VIJAYAWADA vs. INCOME TAX OFFICER, WARD-2(1), VIJAYAWADA

Facts

The assessee did not file an Income Tax Return for AY 2015-16, despite having significant cash deposits (Rs. 56,10,400/-) flagged by the CBDT. The AO framed an ex-parte assessment under Section 144, adding the entire amount under Section 69A. The assessee's subsequent appeal to the CIT(A) was dismissed due to a delay of 120 days, which the CIT(A) refused to condone.

Held

The Tribunal noted that notices were not properly delivered to the assessee due to a blank recipient ID in emails and that the assessee was not aware of the proceedings. Concluding that the assessee deserved an opportunity, the Tribunal allowed the appeal for statistical purposes, remanding the case to the CIT(A) to allow the assessee to substantiate the cash deposits.

Key Issues

Whether the CIT(A) was justified in not condoning the delay in filing the appeal when assessment notices were not properly delivered to the assessee, and whether the assessee should be given an opportunity to substantiate cash deposits.