SHASHIDHAR SHIVANNA SHETTY,MUMBAI vs. ITO WD 4(3), THANE

Briefly stated the facts are, assessee an individual filed his return of income for the assessment year under consideration on 30th July 2008, declaring income of ` 1,17,080. In the course of assessment proceedings, Assessing Officer on the basis of information available on record, found that during the relevant previous year, assessee has made cash deposits in different bank accounts as under:–

As alleged by the Assessing Officer, in spite of request made since the assessee did not furnish necessary details explaining the source of cash deposit. However, he found that as per the information obtained from Sadhan Sahakari Bank Ltd., no such account existed with them. The Assessing Officer, therefore, treated the cash deposits made in other two bank account aggregating to ` 22,94,950 as the unexplained cash deposits and added back to the income of the 3 Shri Shashidhar Shivanna Shetty assessee. Being aggrieved of such addition, assessee preferred appeal before the learned Commissioner (Appeals).

The first appellate authority also sustained addition in an ex– parte order passed by him since no one appeared on behalf of the assessee.

Learned A.R. explaining the reason for non–appearance before the Assessing Officer and learned Commissioner (Appeals) submitted, assessee had shifted from old address to new residence and this fact was intimated to the Assessing Officer vide letter dated 27th July 2006, however, the Assessing Officer instead of sending statutory notices in the new address, continued to issue notices in the old address which never reached the assessee. He submitted the Assessing Officer thereafter served the notices on the Chartered Accountant who did not obtain necessary details from assessee. He submitted, as assessee was not aware of these facts, he could not produce necessary evidence to explain the source of cash deposit in the bank account. As far as non–appearance before the first appellate authority is concerned, the learned A.R. submitted, inadvertently in form no.35, assessee’s coulsel again mentioned the old address as a result of which notices could not be served and the appeal was decided ex–parte. Learned A.R. submitted, otherwise also the assessee was under serious problem as 4 Shri Shashidhar Shivanna Shetty his father died and he himself was under medical condition which could be proved from the documentary evidence submitted. Learned A.R. submitted the assessment order itself is bad in law as before completion of assessment, Assessing Officer has not served any notice under section 143(2) of the Act. He, therefore, submitted in the interest of justice the matter may be restored back to the file of the learned Commissioner (Appeals) for adjudicating the issue on merit after reasonable opportunity of being heard to the assessee.

Though, the learned Departmental Representative justified the action of the learned Commissioner (Appeals) in disposing off the appeal ex–parte at the same time he did not have any serious objection if the matter is restored back to the file of the Assessing Officer for fresh adjudication. However, he submitted assessee should be directed to co–operate in finalizing the proceedings.

We have considered the submissions of the parties and perused the material available on record. As could be seen, the limited grievance of the assessee is he was not provided reasonable opportunity to represent his case either before the Assessing Officer or before the learned Commissioner (Appeals). Without entering into the controversy whether the assessee or the department is at fault for non–representation by the assessee, in the interest of fair play and 5 Shri Shashidhar Shivanna Shetty justice we deem it appropriate to restore the matter back to the file of the learned Commissioner (Appeals) for allowing assessee reasonable opportunity for effectively representing his case. It will be open for the assessee to raise any other ground including any legal ground challenging the validity of the assessment, before the first appellate authority and the first appellate authority should dispose of all the issues on merit with a reasoned order after considering the submissions of the assessee in the context of facts and material brought on record. Further, we direct the assessee to co–operate by appearing before the learned Commissioner (Appeals) on the date fixed for effective disposal of the appeal.

In the result, appeal is allowed for statistical purposes. Order pronounced in the open Court on 29.02.2016