Adepu Rajendra Prasad,, Hyderabad vs Assessee

2. Brief facts of the case are that the assessee is an individual deriving income from business. Information from CIB section was received to the effect that the assessee had made cash deposits in excess of Rs.10.00 lakhs during financial year 2004-05 relevant to A.Y 2005-06. A notice u/s 142(1) was issued on 16.08.2007 calling for the return of income. As there has been no response from the assessee, the assessment was completed u/s 144 of the Act on 31.12.2007 treating the entire amount of Rs.10,84,711/- as unexplained investment made by the assessee during the A.Y 2005-06. Return of income was belatedly filed by the assessee on 7.1.2008 after completion of the assessment.

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Aggrieved by the assessment, the assessee filed appeal before the ld CIT (A)III Hyderabad. The ld CIT (A) noticed that the notice u/s 142(1) was not issued within one year from the end of the relevant A.Y, he observed that the proceedings are not valid and hence cancelled the assessment. However, the CIT (A) has advised the AO to initiate proceedings u/s 147 of the I.T. Act to assess the escaped income, if any. Thereafter, the AO had issued a notice u/s 148 on 2.12.2009 after obtaining approval as required u/s 151(1) of the I.T. Act. In response to the notice issued, the assessee filed a letter on 9.2.2010 requesting for treating the return filed on 7.1.2008 as a return filed in response to the notice issued u/s 148.

3. The case was taken for scrutiny and notice u/s 143(2) was issued. The assessment was completed and the total income was assessed at Rs.3,90,990/-. Aggrieved, the assessee filed appeal before the ld CIT (A). The CIT (A) held as follows:

"4. In this case the 1st notice of hearing was issued on 21.04.2014 fixing the case for hearing on 6.5.2014. The appellant filed an adjournment letter on 6.5.2014 stating that the appellant is reportedly out of station till 13.05.2014. The case was adjourned to 3.6.2014. On 3.6.2014 the AR filed an adjournment letter stating that the assessee is stationed at Korutla, Karimnagar District could not come over to Hyderabad. Again the case was adjourned to 23.6.2014. On 23.6.2014 the AR nor the appellant appeared. Despite this yet another opportunity was given and the case was fixed on 15.7.2014. It is clear that the appellant is not keen to pursue his own appeal. I have therefore, no option but to adjudicate on the case based on information on record".

4. The CIT (A) directed the AO to pursue the recovery of tax considering the total non cooperation by the assessee in the tax

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proceedings and dismissed the appeal of the assessee. The CIT (A) also directed the AO to charge the consequential interest u/s 234A and 234C. Aggrieved the assessee is in appeal before us and has raised the following grounds:

"1. The order of the ld CIT (A) is erroneous both on facts and in law.

2. The ld CIT (A) erred in disposing of the appeal ex parte

3. The ld CIT (A) erred in not deciding the appeal on merit as per the grounds of appeal.

4. The ld CIT (A) erred in not considering the written submissions and the petition for admission of additional evidence filed before the ld CIT (A).

5. The ld CIT (A) erred in confirming the action of the AO in levying interest u/s 234A and 234B of the I.T. Act".

5. The ld Counsel for the assessee Shri S. Rama Rao stated at the time of hearing that he had filed written submissions and had attended the hearing on 15.7.2014 and hence cooperated with the Department. The ld Counsel relied on the decision in the case of AGA Publications Ltd vs. DCIT in ITA No.1297/Hyd/2014. He filed an affidavit affirming that he was present and had filed the written submissions and hence pointed out that the CIT (A) has wrongly mentioned that he was not present and had not appeared before him. According to the ld Counsel, the ld CIT (A) had wrongly stated that the assessee is not interested in pursuing the appeal. The Counsel pointed out that the assessee had sought adjournment many times due to non availability of the guidance from the C.A.

6. We have heard both the parties. In ITA No.1297/Hyd/2014, dated 28th November, 2014 in the case of AGA Publications Ltd vs. DCIT relied on by the assessee, it has been held as follows:

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"4. Without going into the merits of various contentions, we are of the opinion that the order of Ld. CIT(A) cannot be sustained. First of all, Ld. CIT(A) has no power to dismiss the appeal on the reason that assessee is not interested in pursuing the appeal. Ld. CIT(A) has to decide the issues on merits considering the facts on record and pass orders, if any based on earlier years, as similar additions were also made in earlier years. Since, Ld. CIT(A) rejected the adjournment sought and dismissed the appeal, principles of natural justice require that assessee should be given an opportunity to justify the claims. Since assessee is also filing additional evidence in support of various payments made, we are of the opinion that the issue requires re- examination by A.O. Therefore, giving opportunity to assessee to justify various claims made, the order of A.O. and Ld. CIT(A) are set aside and issue of assessment is restored to the file of A.O. to do according to law and facts of the case".

7. Respectfully following the above Coordinate Bench decision, we deem it fit to set aside the order of the CIT (A) and restore the matter to the file of the AO who shall decide the case in accordance with the law and facts of the case. Needless to say, that assessee should be given adequate opportunity for presenting its case.

8. In the result assessee's appeal is allowed for statistical purposes.

Order pronounced in the Open Court on 9th January, 2015.

Sd/- Sd/- (P.M. Jagtap) (Asha Vijayaraghavan) Accountant Member Judicial Member

Hyderabad, dated 9th January, 2015.

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ITA No.1415 of 2014 Adepu Rajendra Prasad Karimnagar.

Vnodan/sps

Copy to:

1. Sri S. Rama Rao, Advocate, Flat No.102, Shriyas Elegance, 3-6-643 Street No.9 Himayatnagar, Hyderabad 500029

2. Income Tax Officer Ward 3 Karimnagar

3. The CIT(A)-III Hyderabad

4. The CIT Hyderabad

5. The DR, ITAT, Hyderabad

6. Guard File

By Order

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