ADARSH MEDICAL HALL,HYDERABAD V. ITO., WARD-7(1), HYDERABAD

ITA 287/HYD/2025

AI Insights

The case involves Adarsh Medical Hall, which appealed against the order of the CIT(A) at the National Faceless Appeal Centre, Delhi, concerning the assessment year 2017-18. The primary issue arose from the assessee's failure to file income tax returns despite substantial cash deposits during the demonetization period. The Income Tax Department, using data analytics, identified these deposits and issued a notice under section 142(1) of the Act. The assessee did not respond, leading to an ex-parte assessment order under section 144, determining the income at Rs.28,55,477. The CIT(A) dismissed the appeal due to non-compliance with section 249(4)(b), which requires payment of admitted tax or an equivalent advance tax amount. The Tribunal found that the assessee was not given a reasonable opportunity of hearing and thus remanded the case back to the CIT(A) for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668925 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH PRADHAN
• Assessee Lawyers: R. MOHAN KUMAR
• Keywords: Condonation of delay; Set aside; Reasonable cause
• Section: 144; 142(1)

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Manjunatha G., Accountant Member and Shri Ravish Sood, Judicial Member आ.अपी.सं /ITA No.287/Hyd/2025 (निर्धारण वर्ा/Assessment Year: 2017-18) Adarsh Medical Hall Hyderabad [PAN :AAGFA5186R] Vs. Income Tax Officer Ward-7(1) Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri R.Mohan Kumar, AR रधजस् व द्वधरध/Revenue by: Shri Ashutosh Pradhan, DR सुिवधई की तधरीख/Date of Hearing: 23/06/2025 घोर्णध की तधरीख/Date of Pronouncement: 25/06/2025 आदेश / ORDER PER. MANJUNATHA G., A.M: This appeal filed by the assessee is directed against the order dated 03.01.2024 of the learned Commissioner of Income Tax (Appeals) [Ld.CIT(A)], National Faceless Appeal Centre, Delhi, pertaining to A.Y.2017-18. 2. At the outset it is observed that the appeal is time barred by 326 days. The assessee filed an affidavit, submitting that tax compliances of the appellant firm were being attended by a tax 2 ITA No.287/Hyd/2025 Adarsh Medical Hall firm namely, M/s D.Venugopal & Company and the email id of the firm [e-mail] was mentioned in the e- filing portal profile of the clients of the tax consultant, which was subsequently changed to [e-mail], but inadvertently missed out to change the mail id in some of the portals of the clients including that of the appellant firm. Consequently, the deficiency letter issued to the appellant and also the order passed by the Ld.CIT(A) was not known to the appellant as the alerts sent to the rediffmail were not verified by the staff of the tax consultant after the change over to Gmail. The appellant came to know of the order of the Ld.CIT(A) when the appellant contacted the tax consultant to ascertain the status of pending cases. Thus, he submitted that the delay in filing of the appeal was due to the genuine reasons narrated above and pleaded to condone the delay and admit the appeal for hearing. 3. The Ld.DR opposed petition filed for condonation of delay and submitted that reasons do not come under reasonable cause and thus, delay should not be condoned. 4. After hearing both the sides, we condone delay in filing the appeal and admit appeal for disposal in the interest of justice. 3 ITA No.287/Hyd/2025 Adarsh Medical Hall 5. The brief facts of the case are that on the basis of data analytics and information gathered during the phase of online verification under ‘Operation Clean Money’, the Income Tax Department gathered a list of assessees, who had deposited substantial cash in bank accounts during the demonetization period, but have not filed income tax return for the A.Y.2017- 18. The data revealed that the assessee had deposited cash in its bank accounts during the demonetization period, but not filed the return of income for the A.Y.2017-18. Therefore, notice u/s 142(1) of the Income Tax Act, 1961 (“the Act”) dated 13.03.2018 was served on the assessee. The assessee neither furnished any return of income nor explained the sources for the cash deposit. Therefore, the AO passed an order u/s 144 of the Act and determined the total income of the assessee at Rs.28,55,477/- by making additions towards the cash deposits u/s 69A of the Act. 6. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). During the appellate proceedings, the Ld.CIT(A) observed that the assessee failed to satisfy the provisions of section 249(4)(b) of the Act, therefore, notices were issued on 20.12.2023 and 26.12.2023 to comply with relevant provisions of the Act. However, the assessee did not comply with the above notices and failed to furnish any reply to the deficiency letters issued by the Ld.CIT(A). Therefore, the Ld.CIT(A) dismissed the appeal filed by the assessee in- 4 ITA No.287/Hyd/2025 Adarsh Medical Hall limine in terms of section 249(4)(b) of the Act for non-payment of admitted tax or an amount equal to the amount of advance tax which was payable by him. 7. Aggrieved by the order of the Ld.CIT(A), the assessee is now in appeal before the Tribunal. 8. The Ld.Counsel for the assessee, Shri Mohan Kumar, Advocate submitted that the assessment proceedings before the AO was ex-parte. The assessee neither appeared nor furnished any details. The Ld.CIT(A) dismissed the appeal filed by the assessee in-limine on the ground of deficiency in the appeal filed by the assessee, without providing reasonable opportunity of hearing to the assessee. Therefore, the matter may be remanded to the file of the Ld.CIT(A) to give another opportunity of hearing to the assessee, to explain its case and file relevant details to satisfy the provisions of section 249(4)(b) of the Act. 9. The Ld.Sr.AR, Shri Ashutosh Pradhan, on the other hand, submitted that the assessee is not cooperative at all in the proceedings, which is evident from the ex-parte assessment order passed by the AO and the ex-parte appellate order passed by the Ld.CIT(A). The appeal filed by the assessee before the Ld.CIT(A) was defective and the same has been brought to the notice of the assessee by issuing deficiency letters, but the assessee did not file any response. Therefore, the Ld.CIT(A) has 5 ITA No.287/Hyd/2025 Adarsh Medical Hall rightly dismissed the appeal filed by the assessee in terms of section 249(4)(b) of the Act and thus, the order of the Ld.CIT(A) should be upheld. 10. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. Admittedly, the proceedings before the AO are ex-parte. The assessee neither furnished return of income nor appeared and explained the source for the cash deposited into the bank account during the demonetization period. Before the Ld.CIT(A), the assessee has filed defective appeal and the same has been communicated to the assessee by issuing deficiency letters on two occasions. The assessee neither appeared nor rectified mistakes notified in the notices issued by the Ld.CIT(A). Therefore, the Ld.CIT(A) dismissed the appeal filed by the assessee in terms of section 249(4)(b) of the Act on the ground that on or before filing the present appeal, the appellant has failed to make the requisite payment of the amount equal to the amount of advance tax which was payable by him. It is the case of the assessee that the AO has made additions towards total credit in the bank account and the income of the assessee for the year under consideration does not exceed the maximum amount which is liable to tax and thus the assessee is not required to make payment of advance tax. In our considered view, whether the assessee is liable to make an amount equal to the amount of advance tax payable by him needs to be 6 ITA No.287/Hyd/2025 Adarsh Medical Hall established in light of relevant evidences including books of accounts/financial statements. In the present case, the assessee neither furnished return of income nor financial statements to prove its explanation. At the same time, the Ld.CIT(A) also dismissed the appeals in light of provisions of section 249(4)(b) of the Act, even though there are no evidences with the Ld.CIT(A) to show that the income of the assessee for the year under consideration is above the maximum amount liable for tax. Since the assessment order is ex-parte and the Ld.CIT(A) has dismissed the appeal in terms of section 249(4)(b) of the Act, in our considered view, to give one more opportunity of hearing to the assessee, the issue needs to be set aside to the file of the Ld.CIT(A). Thus, we set aside the order of the Ld.CIT(A) and restore the issue to the file of the Ld.CIT(A) with a direction to reconsider the issue after providing one more opportunity to the assessee. Needless to say, the assessee shall appear before the Ld.CIT(A) and satisfy the provisions of section 249(4)(b) of the Act in light of proviso by filing an application to the Ld.CIT(A) for any good and sufficient reasons to be recorded in writing, seeking exemption from the operation of the provisions of section 249(4)(b) of the Act. 7 ITA No.287/Hyd/2025 Adarsh Medical Hall 11. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the Open Court on 25th June, 2025. Sd/- Sd/- (RAVISH SOOD) JUDICIAL MEMBER (MANJUNATHA G.) ACCOUNTANT MEMBER Hyderabad, Dated 25th June, 2025 L.Rama, SPS Copy to: S.No Addresses 1 M/s Adarsh Medical Hall, Afzal Gunj, Hyderabad 2 The Income Tax Officer, Ward-7(1), Signature Towers, Kondapur, Hyderabad 3 The Pr.CIT, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order "