ANNADURAI KATHIRESAN,NAMAKKAL vs. ITO, WARD-1, NAMAKKAL

Brief facts of the case are that the assessee is an individual and has filed the return of income but failed to explain sources for the cash credits. Therefore, on the basis of AIR information the case of the assessee has been reopened u/s 147 of the Act. The AO has passed order under section 144 r.w. section 147 of the Act dated 10.12.2018 making an addition of Rs.31,63,754/- towards unexplained/unproven deposits in bank account.

Aggrieved by the action of the ld. Assessing Officer, the appellant filed appeal against the order under section 144 r.w. section 147 of the Act dated 10.12.2018 before the Ld. CIT(A) wherein the assessee did not appear before the first appeal authority. Accordingly, the assessment was confirmed on merits against which assessee is in further appeal before us.

Before us, the ld. Counsel for the appellant submitted that Ld. CIT(A) had not followed the principles of natural justice. Ld. Counsel for the appellant further prayed that if an adequate opportunity of hearing is given to appellant, appellant would prosecute its case properly before the Ld. CIT(A).

On the other hand, 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.

We heard the rival contention and perused the material on record. Though we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. CIT(A) for adjudication on merits after affording proper opportunity of hearing to the assessee subject to cost of Rs.5000/- which shall be deposited by the assessee within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld. CIT(A). The assessee is directed to substantiate its case forthwith without any fail, failing which Ld. CIT(A) shall be at liberty to proceed with the disposal of the appeal on merits.

In the result, appeal filed by the assessee in for assessment year 2011-2012 is allowed for statistical purpose.