PALAKA SATYANARAYANA,KAKINADA vs. INCOME TAX OFFICE, WARD-1, KAKINADA

Facts

The assessee's assessment for A.Y. 2014-15 was reopened under Section 147/148, leading to an addition of Rs. 34.50 lacs under Section 69A for unexplained cash deposits. The CIT(A) upheld the assessment. The assessee appealed, claiming he was not afforded a proper opportunity of being heard by the CIT(A) as hearing notices were sent to an email address from his ITR instead of the one specified in his Memorandum of Appeal (Form 35).

Held

The Tribunal found that the assessee was not validly notified about the hearing dates because the CIT(A) office incorrectly used the email address from the ITR. This deprived the assessee of a reasonable opportunity to present his case. The Tribunal set aside the CIT(A) order and remanded the matter back to the CIT(A) for re-adjudication after providing a proper opportunity of hearing.

Key Issues

Whether the CIT(A) erred in dismissing the appeal without affording a proper opportunity of being heard by sending hearing notices to an incorrect email address, thereby affecting the validity of assessment reopening and addition of unexplained cash deposits.