ASHOK DUPALLY,NIZAMABAD V. INCOME TAX OFFICER, WARD-1, NIZAMABAD

ITA 70/HYD/2025

AI Insights

The case involves Ashok Dupally, who appealed against the orders of the Ld. CIT(A) and Ld. AO concerning the assessment year 2017-18. The primary contention was the ex-parte order passed by the Ld. CIT(A), which determined the assessee's income at Rs.1,61,98,556, labeling it as unexplained money under section 69A of the Income Tax Act, 1961. The assessee argued that both the revenue authorities had passed their orders without providing adequate opportunities for a hearing, thus violating principles of natural justice. The Tribunal, considering the factual nature of the issue and the need for a fair hearing, decided to set aside the previous orders and remand the case back to the Ld. AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46490 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• 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: SRINATH SADANALA
• Assessee Lawyers: P. VINOD
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 144; 142(1); 69A

Judgement Text

"आयकर अपीलीय अधिकरण, हैदराबाद पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”, HYDERABAD BEFORE SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, HON’BLE ACCOUNTANT MEMBER ITA No.70/Hyd/2025 Assessment Year: 2017-18 Ashok Dupally, Nizamabad. PAN : AIFPD6443D. Vs. Income Tax Officer, Ward – 1, Nizamabad. (Appellant) (Respondent) Assessee by: Shri P. Vinod, Advocate. Revenue by: Shri Srinath Sadanala, Sr.A.R. Date of hearing: 02/04/2025 Date of pronouncement: 04/04/2025 O R D E R PER MADHUSUDAN SAWDIA, A.M. This appeal is filed by Ashok Dupally (“the assessee\") feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 30.12.2024 for the A.Y. 2017-18. 2 ITA No.70/Hyd/2025 2. The assessee has raised the following grounds of appeal : “1. The ex-parte order passed by the Ld. CIT(A) determining the income at Rs.1,61,98,556 is not only erroneous both on facts and in law, but is contrary to principles of natural justice. 2. The Ld. CIT(A) erred in sustaining the addition of Rs. 1,6198,556 as unexplained money under section 69A of the Act. The Ld. CIT(A) ought to have provided one more opportunity to the Appellant to put forth his case. 3. The Ld.CIT(A) failed to appreciate that the AO violated the spirit of provisions of section 144 of the Act by adding up all the credits in the bank account. The CIT(A) ought to have r appreciated that the AO was bound to appreciate the entries in the bank account and reach a reasonable and correct income.” 3. The brief facts of the case are that the assessee is an individual, had not filed his return of income for the year under consideration. The learned Assessing Officer (“Ld. AO”) issued a notice u/s 142(1) of the Income Tax Act, 1961 (“the Act”) on 30.01.2018 requiring the assessee to furnish the return of income. However, the assessee failed to file the return of income within the time allowed under the said notice. The assessee eventually filed the return of income on 02.12.2019 which was beyond the time prescribed under the notice u/s 142(1) of the Act. The Ld. AO treated the return as invalid and proceeded to complete the assessment exparte u/s 144 of the Act. From the available records, the Ld. AO found that there was credit 3 ITA No.70/Hyd/2025 aggregating to Rs.1,61,98,556/- in bank account of the assessee during the relevant assessment year. Since no satisfactory explanation was furnished regarding the source of such credits, the Ld. AO treated the entire credit as unexplained income u/s 69A of the Act and computed the total income of the assessee at Rs.1,61,98,556/- vide his order dated 08.12.2019. 4. Aggrieved with order of Ld. AO, the assessee preferred appeal before Ld. CIT(A). However, before the Ld. CIT(A) also the assessee failed to respond to the notices issued by the Ld. CIT(A). Consequently, the Ld. CIT(A) dismissed the appeal of the assessee. 5. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. 6. The Ld. AR submitted that, both the revenue authorities had passed the orders without providing adequate opportunity of hearing to the assessee. The Ld. AR further submitted that the assessee would be prejudiced without being heard on merits. It was further submitted that the assessee is now in a position to 4 ITA No.70/Hyd/2025 furnish proper documentary evidence and explanation regarding the credit of Rs.1,61,98,556/- in its bank account. The Ld. AR further submitted that the case involved is purely factual issue and in the interests of justice, he prayed for one more opportunity to the assessee to substantiate its claim by providing necessary documents and explanation before the Ld. AO. 7. Per contra, the Ld. DR objected to the request of the assessee for setting aside the issue to the file of Ld. AO. The Ld.DR submitted that proper opportunity has already been given to the assessee, therefore, no further opportunity is required to be given. 8. We have considered the rival contentions and perused the material available on record in view of the submissions made by either side. The assessee has contended that adequate opportunity was not provided during the assessment proceedings to substantiate his claim. It is submitted that the assessee is now in a position to furnish proper documentary evidence and explanation regarding the credit of 5 ITA No.70/Hyd/2025 Rs.1,61,98,556/- in his bank account. On the other hand, the Ld. DR opposed the assessee's request, stating that sufficient opportunity had already been provided, and no further chance was warranted. Considering the factual nature of the issue and in the interests of justice, we are of the view that one more opportunity may be given to the assessee to present his case before the Ld. AO by submitting necessary documents and explanations. Accordingly, we set aside the orders of the Ld. AO and the Ld. CIT(A) and restore the matter to the file of the Ld. AO for fresh adjudication. The Ld. AO shall afford a reasonable opportunity of being heard to the assessee before deciding the issue on merits. 9. In the result, the appeal of the assessee is allowed for statistical purposes. 4th अप्रैल, 2025 को खुली अदालत में सुनाया गया आदेश। Order pronounced in the Open Court on 4th April, 2025. Sd/- Sd/- (VIJAY PAL RAO) VICE PRESIDENT Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER 6 ITA No.70/Hyd/2025 Hyderabad, dated 04.04.2025. **#TYNM/sps आदेशकी प्रतितिति अग्रेतिि/ Copy of the order forwarded to:- 1. तिर्धारििी/The Assessee : Ashok Dupally, #6-21, Opp. RTA Office, Chakradhar Nagar, Nizamabad. 2. िधजस्व/ The Revenue : The Income Tax Officer, Ward – 1, Nizamabad. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. तिभधगीयप्रतितितर्, आयकि अिीिीय अतर्किण, हैदिधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईि / Guard file आदेशधिुसधि / BY ORDER Sr. Private Secretary ITAT, Hyderabad "