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Facts
The assessee, an individual, did not file an Income Tax Return for AY 2016-17. The assessment was reopened by the AO under Section 147 based on information about significant cash deposits and credit card payments. Due to the assessee's non-response to notices, the AO proceeded with an ex-parte assessment under Section 144, making additions under Section 69A and 69C, which was subsequently confirmed ex-parte by the CIT(A).
Held
The Tribunal observed that both the AO and CIT(A) passed ex-parte orders due to the assessee's non-compliance. In the interest of natural justice, the Tribunal remitted the matter back to the CIT(A) to provide the assessee one more opportunity to be heard and decide the case on merits, while cautioning the assessee to cooperate.
Key Issues
Ex-parte assessment and confirmation by appellate authorities due to assessee's non-compliance; denial of proper opportunity of being heard; and the need for a decision on the merits of the additions.
Sections Cited
147, 148, 142(1), 144, 144B, 69A, 69C
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आयकर अपील"यअ"धकरण, "वशाखापटणम पीठ, "वशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM "ी दु"वू" आर एल रे"डी, उपा"य" एवं "ी एस बालाकृ"णन, लेखा सद"य के सम" BEFORE SHRI DUVVURU RL REDDY, HON’BLE VICE PRESIDENT & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ ("नधा"रण वष" / Assessment Year: 2016-17) Jayanth Gaddipati, Vs. Income Tax Officer, Guntur. Ward-2(1), PAN: BBMPG1369Q Guntur. (अपीलाथ"/ Appellant) (""यथ"/ Respondent) अपीलाथ" क" ओर से/ Appellant by : Sri I. Kama Sastry, CA ""याथ" क" ओर से / Respondent by : Dr. Aparna Villuri, Sr. AR सुनवाई क" तार"ख / Date of Hearing : 12/08/2025 घोषणा क" तार"ख/Date of : 04/09/2025 Pronouncement O R D E R PER DUVVURU RL REDDY, Vice President:
This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)-NFAC”] in DIN & Order No. ITBA/NFAC/S/250/2024-25/1074176585(1), dated 07/3/2025 arising out of the order passed U/s. 147 of the Income Tax Act, 1961 [“the Act”] for the AY 2016-17. 2 Jayanth Gaddipati vs. ITO 2. Brief facts of the case are that the assessee is an individual. The assessee has not filed his return of income for the AY 2016- 17. As per the information available with the Department, it is noticed that the assessee has made cash deposits of Rs. 1,23,19,699/- in his savings bank account and paid credit card bills Rs. 42,74,805/-. Based on the above information, the case of the assessee was reopened U/s. 147 of the Act and notice U/s. 148 of the Act was issued on 29/03/2021 after obtaining the necessary approval from the competent authority. Thereafter, notice U/s. 142(1) of the Act was issued on 15/11/2021. However, there was no response from the assessee. The Ld.AO also issued statutory notices and show cause notice which were served to the email Id of the assessee on various dates. However, there was no response from the assessee and therefore, the Ld.AO proceeded to pass the ex-parte assessment U/s. 144 of the Act and the same was informed to the assessee by issuance of show cause notice dated 08/03/2022 along with the draft assessment order. In the absence of any response from the assessee to the show cause notice issued, the Ld. AO completed the assessment and made addition of Rs. 1,23,19,699/- U/s. 69A of the Act and Rs. 42,74,805/- U/s. 69C of the Act and 3 Jayanth Gaddipati vs. ITO determined the total income of the assessee at Rs. 1,65,94,504/-. Thus, the Ld. AO passed the assessment order U/s. 147 r.w.s 144 r.w.s 144B of the Act, dated 23/03/2022. Aggrieved by the order of the Ld.AO, the assessee carried the matter in appeal before the Ld. CIT(A).
On appeal, the Ld. CIT(A) passed ex-parte order and observed that the assessee neither filed written submissions nor complied with the notices issued. Thus, the Ld. CIT(A) dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The Ld. CIT(A) is not justified in confirming the addition made by the AO for non-prosecution by the assessee without deciding the issue on merits.
2. The Ld. CIT(A) is not justified in confirming the addition of Rs. 42,74,805/- made by the Assessment unit, NFaAC U/s. 69C of the Act.
3. All the above grounds of appeal are mutually exclusive and without prejudice to one another ground.
4. The appellant craves leave to add to, alter, delete, modify all or any of the above grounds of appeal.
5. The Ld. CIT(A) is not justified in confirming the addition of Rs. 1,23,19,699/- made by the Assessment Unit, NFaAc U/s. 69A of the Act.”
At the outset, the Ld. AR submitted before us that the Ld. CIT (A) has passed ex-parte order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be 4 Jayanth Gaddipati vs. ITO remitted back to the file of the Ld CIT (A) in order to provide one more opportunity to the assessee of being heard.
Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that several opportunities had been provided to the assessee however, on the given dates of hearing, neither the assessee has appeared before the Ld. CIT (A) nor responded to the hearing notices issued. It was further submitted that the Ld. CIT (A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.
We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that the Ld. CIT (A) had posted the case on four occasions. However, none appeared on behalf of the assessee before the CIT(A) on the dates of hearing nor filed any details / written submissions with regard to the grounds raised
before the Ld. CIT(A). Therefore, the Ld. CIT (A) was left with no other option except to adjudicate the appeal ex-parte. In this situation, considering the prayer of the Ld. AR for one more opportunity before the Ld. CIT(A), and in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (A) in order to consider the appeal
5. Jayanth Gaddipati vs. ITO afresh and decide the case on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A) in the proceedings failing which the Ld. CIT (A) shall be at liberty to pass appropriate order in accordance with law and on merits based on the materials on the record. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.