VELLANKI BALA BHASKAR RAO,ELURU vs. INCOME TAX OFFICER, WARD-2, ELURU

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in ITBA/NFAC/S/250/2023- 24/1056682713(1) dated 30.09.2023, arising out of order passed u/s 144 of the Income Tax Act, 1961 (in short ‘Act’) dated 20.11.2019 for the Assessment Year (A.Y.) 2017-18. Vellanki Bala Bhaskar Rao, Eluru

Brief facts of the case are that the assessee is an individual, failed to file return of income for the A.Y.2017-18. Various notices were issued by the AO as per the provisions of the Act, but the assessee failed to furnish any reply before the AO during the assessment proceedings. Hence, the AO completed the assessment based on the material available on record and passed order u/s 144 of the Act dated 20.11.2019, assessing the income of the assessee at Rs.1,53,20,600/-, taxable u/s 115BBE of the Act at the rate of 60%.

On being aggrieved, the assessee preferred an appeal before the CIT(A) and dismissed the appeal filed by the assessee ex-parte due to non prosecution.

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal : i. The order under Sec.250 dt.30.09.2023 passed by the Ld.CIT(A), NFAC, Delhi may be erroneous both in law and also on facts of the case. ii. Taking cognizance of the fact that there was non-compliance to the notices issued by the authorities from time to time, due to the circumstances beyond the control, arising out “communication gap” as recorded in the annexed statement of facts and such non compliance was not intentional, deliberate, a lenient view may kindly be extended and adverse inferences may not be drawn w.r.t. such technical flaw; Vellanki Bala Bhaskar Rao, Eluru iii. Also taking cognizance of the fact that the assessee maintained REGULAR CASH BOOK for holding control over the multiples financial transactions effected from time to time, it may kindly be noticed that the provisions of Sec.69A of the Act may not be applicable to the instant case; iv. Also considering the fact that all those financial transactions, comprising of “cash deposits” vis-a-vis other CREDITS (other than cash deposits) were effected through “KNOWN Sources only” as per the detailed analysis reflected in the annexed statement of Facts, it may kindly be noticed that the impugned addition of Rs.1,53,20,600/- may be DEVOID OF ANY MERIT and may not be sustainable in law. v. Also giving due weight to the fact that there is no independent business activity undertaken by the appellant and considering the overall factual and legal position recorded in the annexed statement of facts it may kindly be noticed that there is NO UNEXPLAINED income derived by the appellant warranting enforcement of Sec.69A of the Act and thereby the aforesaid addition may be VOID IN LAW. vi. In the context of non holding of any unexplained money within the meaning of Sec.69A of the Act, quantification of demand as laid down by Sec.115BBE of the Act and also charging of huge interest under Sec.234A and 234B may be VOID IN LAW. vii. For these reasons and other reasons which may be advanced during the course of hearing of the appeal, it is humbly prayed that the reliefs sought for may be allowed in the interests of equity and justice and also to be in consonance with the provisions of law.

We have heard both the parties and perused the material available on record. It is apparent from the records that the Ld.AO as well as the Ld.CIT(A) dismissed the appeal of the assessee due to non compliance to various statutory notices issued by the revenue authorities from time to time. The only contention of the assessee is, the reason for non- compliance was only due to the communication gap, which is neither intentional nor deliberate and the assessee has adequate cash resources Vellanki Bala Bhaskar Rao, Eluru to meet the impugned cash deposits made. Keeping in view the aforesaid facts and circumstances of the case, the principles of natural justice and considering the plea of the assessee to provide an opportunity of being heard before the Ld.CIT(A), we are inclined to remit the matter back to the file of the Ld.CIT(A) with a direction to afford an opportunity of being heard to the assessee in the interest of justice. The assessee is also directed to adhere to the notices issued by the revenue authorities and cooperate during the proceedings. Accordingly, the grounds raised by the assessee are allowed for statistical purpose.

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