S. ARULPRAGASAM,VRIDHACHALAM vs. ITO WARD 5, CUDDALORE

Assessee is an individual and has made substantial cash deposit into his savings bank account but did not file the return of income. Therefore, on the basis of the same, the case of the assessee has been reopened u/s 147 of the Income Tax Act, 1961 (In short ‘Act’). The assessee, thereafter filed his return of income on 09.09.2019 for AY 2012-13 admitting a total income of Rs.2,58,000/-. The assessee has also filed a letter dated 09.09.2019 explaining the cash deposits made in bank. However, the AO has passed order under section 144 r.w. section 147 of the Act dated 24.12.2019 an addition of Rs.43,57,595/- under section 69A of the Act rejecting the explanation of the assessee.

Further, the appellant filed the appeal against the order under section 144 r.w. section 147 of the Act dated 24.12.2019 before the Ld.CIT(A) wherein the assessee neither appeared nor submitted any submissions before the first appeal authority. Accordingly, the assessment was confirmed on merits against which assessee is in further appeal before us.

None appeared before us for the assessee. We have rejected the adjournment application filed by the assessee. The Ld. Sr. DR pleaded for dismissal of the appeal on the ground that the assessee failed to appear before the ld. first appellate authority also.

Though we concur with the submissions of Ld.DR, Ms. Gauthami Manivasagam, JCIT however, keeping in mind the principle of natural justice and grant proper opportunity of hearing to the assessee the appeal requires fresh adjudication. We have also seen that before AO assessee was ex-parte and before ld.CIT(A) most of notices dated 15.01.2021, 02.09.2021 and 27.10.2021 u/s 250 of the Act were issued during Covid-19 Pandemic. Accordingly, for complete adjudication at grass root itself, the impugned order is set aside and the appeal is restored back to the file of Ld.AO for denovo adjudication after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the assessment.

In the result, appeal filed by the assessee is allowed for statistical purpose.