DEVARASETTY RAJA SEKHAR,GUNTUR vs. INCOME TAX OFFICER, WARD-1(1), GUNTUR

PER DUVVURU RL REDDY, Judicial Member :

2 2. Briefly stated the facts of the case are that the assessee is an individual and has not filed his return of income U/s. 139(1) of the Act for the AY 2015-16. In the case of the assessee, the order U/s. 148A(d) of the Act was passed on 07/04/2022 by the Ld. AO, Ward-1, Narasaraopet wherein the Ld. AO observed that the assessee has carried out certain transactions during the AY 2015-16 aggregating to Rs. 73,32,741/-. Accordingly, notice U/s. 148 of the Act dated 07/04/2022 was issued to the assessee with the prior approval of the competent authority. In response to the notice U/s. 148 of the Act, the Ld. AO observed that the assessee filed an invalid return of income. Accordingly, notices U/s. 142(1) of the Act were issued to the assessee on 03/07/2023, 04/08/2023 and 04/09/2023. In response to the noitces, the assessee filed his reply dated 14/08/2023 and 10/09/2023. However, on perusal of the submissions made by the assessee, the Ld. AO observed that the assessee has not filed any supporting documentary evidence along with his reply. Therefore, a show-cause notice dated 05/10/2023 was issued to the assessee however the assessee did not response to the said show cause notice. Accordingly, the Ld. AO observed that since the assessee has failed to explain the source of cash of Rs. 66,47,900/- deposited in his account maintained with HDFC 3 Bank along with documentary evidence, the Ld. AO treated the amount of Rs. 66,47,900/- as unexplained cash U/s. 69A r.w.s 115BBE of the Act and made the addition. Further, the Ld. AO also made addition of Rs. 6,84,841/- U/s. 69C r.w.s 115BBE of the Act towards payment of credit card bill payments in the absence of any details / documents related to the source of such payments. The Ld. AO also initiated the penalty proceedings U/s. 271(1)(c) of the Act for concealment of income. Thus, the Ld. AO completed the assessment and determined the total income of the assessee at Rs. 75,71,391/- and passed the assessment order U/s. 147 r.w.s 144 r.w.s 144B of the Act, dated 30/01/2024. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC.

4 “1. The order of Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case.

3. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 66,47,900/- made by the AO towards unexplained cash deposits in bank account U/s. 69A of the Act.

4. The Ld. CIT(A) is not justified in sustaining the addition of Rs. 6,84,841/- made by the AO towards unexplained credit card payments U/s. 69C of the Act. Any other grounds may be urged at the time of hearing.” 5.

5 6. We have heard the both the sides and carefully perused the materials available on record. On examining the facts of the case, we find that the Ld. CIT (A)-NFAC had posted the case on several occasions. However, there was no response on behalf of the assessee before the CIT(A)-NFAC on the dates of hearing with regard to the details / submissions as called for by the Ld. CIT(A)-NFAC. Therefore, the Ld. CIT (A)-NAFC was left with no other option except to adjudicate the appeal ex-parte. In this situation, considering the issues involved in the appeal, we are of the considered view that the Ld. CIT(A)-NFAC ought to have decided the case on merits while dismissing the assessee’s appeal. However, considering the prayer of the Ld. AR, and in the interest of justice as well as strictly following the principles of natural justice, we hereby remit the matter back to the file of Ld. CIT (A)-NFAC in order to consider the appeal afresh and decide the case on merits by providing one more opportunity to the assessee of being heard in accordance with the principles of natural justice. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (A)-NFAC in the proceedings failing which the Ld. CIT (A)-NFAC shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. It is ordered accordingly.

6 7. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.

Pronounced in the open Court on 30th September, 2024.

Sd/- Sd/- (एस बालाकृ�णन) (दु�वू� आर.एल रे�ी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सद�य/ACCOUNTANT MEMBER �याियकसद�य/JUDICIAL MEMBER Dated :30/09/2024 OKK - SPS आदेश की �ितिलिप अ�ेिषत /Copy of the order forwarded to:- 1. िनधा�रती/ The Assessee – Devarasetty Raja Sekhar, D.No. 4-4-4, SBI Main Branch Back Side, Sattenapalle, Guntur, Andhra Pradesh -0 533403. 2. राज�व/The Revenue – The Income tax Officer, Ward-1(1), O/o. ITO, Lakshmipuram Main Road, Guntur, Andhra Pradesh – 522006.