KESA PRASAD RAO,KRISHNA DIST vs. INCOME TAX OFFICER, WARD-1(3), VIJAYAWADA

PER DUVVURU RL REDDY, Judicial Member :

This appeal filed by the assessee against the order of the Ld. CIT (A)-National Faceless Appeal Centre, Delhi [CIT(A)-NFAC] vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1054718422(1), dated 29/07/2023 arising out of the order passed U/s. 144 of the

2 Income Tax Act, 1961 [the Act], dated 3/12/2019 for the AY

2017-18.

and did not file his return of income U/s. 139(1) of the Act. As

per the information available with the Department, the assessee

had deposited cash of Rs. 11,46,500/- in his bank account

maintaining with Krishna District Cooperative Bank, Vastsavai

during the demonetization period. As the assessee did not file his

return of income, a notice U/s. 142(1) was issued on 9/3/2018

and served on the assessee on 14/3/2018 whereby the assessee

was asked to file the return of income. Subsequently, the Ld. AO

issued notices U/s. 142(1) of the Act dated 17/7/2019 and

5/8/2019 and the assessee was intimated about the completion

of assessment U/s. 144 of the Act as the assessee has not filed

his return of income. Since there was no response from the

assessee, the Ld. AO issued a show cause notice dated 9/9/2019

and the assessee was asked to explain as to why the entire cash

deposits in the bank accounts cannot be added as unexplained

money U/s. 69A of the Act. In response, the assessee filed his

explanation stating that the assessee has received Rs.

23,99,012/- from the sale Subabulu Crop from ITC Ltd.,

3 Badrachalam and the sale proceeds were credited to his Axis

Bank Account and the amounts were withdrawn on various dates

aggregating to Rs.24,09,000/- out of which the assessee has

spent a sum of Rs. 13,34,000/- towards agricultural activities

and the remaining amount of Rs. 10,45,500/- was deposited in

his bank account during the demonetization period. However, the

Ld. AO did not accept the explanation given by the assessee and

came to a conclusion that the assessee has no sources to deposit

an amount of Rs. 10,00,000/- on 12/11/2016 and therefore, the

Ld. AO treated the same as unexplained money U/s. 69A of the

Act and brought to tax U/s. 115BBE of the Act. Thus, the Ld. AO

completed the assessment U/s. 144 of the Act and passed the

assessment order on 3/12/2019 wherein an addition of Rs. 10

lakhs was made by the Ld. AO as explained above. Aggrieved by

the order of the Ld. AO, the assessee filed an appeal before the

Ld. CIT(A)-NFAC.

assessee and passed order ex-parte as the assessee did not

respond to the notices issued and served on the assessee to make

submissions or file the evidences in support of the claim made by

the assessee. Aggrieved by the order of the Ld. CIT(A)-NFAC, the

assessee is in further appeal before us by raising the following

grounds of appeal:

“1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) ought to have given one more opportunity to the appellant. 3. Without prejudice to the above, the Ld. CIT(A) is not justified in sustaining the addition of Rs. 10,00,000/- made by the Assessing Officer U/s. 69A of the Act towards alleged unexplained cash deposits in the bank account. 4. Any other grounds may be urged at the time of hearing.”

NFAC has passed ex-parte order without providing proper opportunity to

the assessee of being heard. The Ld. AR further submitted that the Ld.

AO has also passed the ex-parte order without considering the

submissions of the assessee and ignoring the principles of natural justice

whereby the assessee has not been provided property opportunity to

substantiate the claim of the assessee. It was therefore pleaded that the

matter may be remitted back to the file of the Ld CIT (A)-NFAC in order to

provide one more opportunity to the assessee of being heard.

Ld. DR, on the other hand, vehemently opposed to the submissions

of the Ld. AR and argued that several opportunities had been provided to

the assessee however, on the given dates of hearing however, neither the

assessee nor his Representative appeared / made submissions before the

5 Ld. CIT (A)-NFAC. It was further submitted that the Ld. CIT (A)-NFAC

had no other option but to pass ex-parte order based on the materials

available on record. Hence, it was pleaded that the order passed by the

Ld. CIT(A)-NFAC does not call for any interference.

materials on record. On examining the facts of the case, we find that Ld.

CIT (A)-NFAC had posted the case on more than two occasions. However,

none appeared on behalf of the assessee before the CIT(A)-NFAC on the

dates of hearing nor made any submissions to substantiate the claim of

the assessee. Therefore, the Ld. CIT (A)-NFAC was left with no other

option except to adjudicate the appeal ex-parte based on the material

available on record. In this situation, we do not find much strength in

the arguments advanced by the ld. AR. However, considering the nature

of issues involved in the appeal and also considering the prayer of the Ld.

AR, in the interest of justice and also 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 on merits by providing one

more opportunity to the assessee of being heard. 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

6 be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.

Pronounced in the open Court on 01st December, 2023.

Sd/- Sd/- (एस बालाकृ�णन) (दु�वू� आर.एल रे�डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सद�य/ACCOUNTANT MEMBER �या�यकसद�य/JUDICIAL MEMBER Dated :01/12/2023 OKK - SPS आदेश क� ��त�ल�प अ�े�षत/Copy of the order forwarded to:- 1. �नधा�रती/ The Assessee– Kesa Prasada Rao, D.No. 2-9, Vemulasarva Post, Vastai, Krishna District, Andhra Pradesh – 521402. 2. राज�व/The Revenue – Income Tax Officer, Ward-1(3), O/o. ITO, CR Building, 1st Floor, Annex, MG Road, Vijayawada, Andhra Pradesh- 520002. 3. The Principal Commissioner of Income Tax, 4.आयकर आयु�त (अपील)/ The Commissioner of Income Tax (Appeals), 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, �वशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड� फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam