MOHD AZGAR ALI,NALGONDA V. ITO., WARD-1, NALGONDA

ITA 1283/HYD/2025

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The case involves Mohd. Azgar Ali, who did not file a return of income for the assessment year 2017-18. The Income Tax Officer (ITO) reopened the assessment under Section 147 of the Income Tax Act, 1961, due to unreported cash deposits of Rs.60,04,600 in the assessee's bank account. The assessee failed to respond to notices under Sections 142(1) and 148, leading to an ex parte assessment order under Section 144, adding the entire amount as unexplained money under Section 69A. The assessee appealed to the CIT(A), who set aside the assessment for a fresh evaluation, citing the lack of a reasonable opportunity for the assessee to present his case. The Tribunal dismissed the assessee's appeal, agreeing with the CIT(A)'s decision to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780103 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2017-2018
• Appeal Filed On: 11-08-2025
• Other Referred Cases: ITO Vs. Prakash Pandurang Patil, Prakash Pandurang Patil Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings
• Section: 147; 148; 142(1)

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘ए’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.1283/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2017-18) Mohd. Azgar Ali, R/o.Nalgonda. PAN : BGVPM1263M Vs. The Income Tax Officer, Ward –1, Nalgonda. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri SNSR Chinmai, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Shri Gurupreet Singh, Sr.A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 06.10.2025 घोर्णध की तधरीख/ Date of Pronouncement : 08.10.2025 O R D E R PER MANJUNATHA G., A.M : This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Printed from counselvise.com 2 ITA No.1283/Hyd/2025 Mohd. Azgar Ali Appeal Centre, Delhi, dated 22.07.2025 and pertains to the assessment year 2017-18. 2. The brief facts of the case are that the appellant is an individual and has not filed return of income for the assessment year under consideration under Section 139(1) of the Income Tax Act, 1961. The assessment has been reopened under Section 147 of the Income Tax Act, 1961, for the reasons recorded. As per which specific information available with the department shows that the assessee has made cash deposits of Rs.60,04,600/- in his bank account maintained with Andhra Bank. Since the assessee has not filed the return of income, the A.O. was of the opinion that the income chargeable to tax has been escaped assessment within the meaning of Section 147 of the Income Tax Act, and accordingly notice under Section 148 of the Act, dated 21-03-2022 was issued and served on the assessee. The assessee did not comply with the notice issued under Section 148 by filing the return of income. Therefore, the A.O. issued various notices under Section 142(1) of the Act and also show cause notice under Section 144(1) and called upon the assessee to explain as to why the assessment Printed from counselvise.com 3 ITA No.1283/Hyd/2025 Mohd. Azgar Ali should not be completed to the best of his knowledge as per the information available on record. Once again, the assessee neither complied with the notice issued by the A.O. nor furnished the details. Therefore, the A.O. passed the order under Section 147 r.w.s. 144 of the Act on 08.01.2025 and determined the total income at Rs.60,04,600/- by making addition of Rs.60,04,600/- under Section 69A of the Act, as unexplained money towards cash deposited in the bank account. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee challenged the notice issued under Section 148A(b), and the order passed under Section 148A(d) of the Act, and subsequent notice issued u/s 148 of the Act, by the jurisdictional A.O. in light of the provisions of Section 144B of the Act. The assessee had also challenged the addition made towards cash deposits on the ground that the source for the cash deposits was out of cash withdrawals from the very same bank account on earlier occasions. Printed from counselvise.com 4 ITA No.1283/Hyd/2025 Mohd. Azgar Ali 4. The Ld. CIT(A) after considering the relevant submissions of the assessee and also taken note of the fact that the assessment proceedings before the A.O. was ex parte and the assessee did not get a reasonable opportunity of hearing to explain the case, passed the order setting aside the issue to the file of the A.O. with a direction to redo the assessment afresh in accordance with law after providing a reasonable opportunity of being heard to the assessee. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal. 6. The learned counsel for the assessee Ms. SNSR Chinmai, referring to the grounds of appeal filed by the assessee, submitted that although the assessee has challenged the validity of the reassessment order passed by the A.O. under Section 147 r.w.s. 144 of the Act, dated 08.01.2025 in light of the notice issued under Section 148 of the Act, by the jurisdictional A.O., i.e., ITO, Ward-1, Nalgonda, but the Ld. CIT(A) does not adjudicate the grounds taken by the assessee. The learned counsel for the assessee further referring to the decision of the Hon’ble Supreme Printed from counselvise.com 5 ITA No.1283/Hyd/2025 Mohd. Azgar Ali Court in the case of ITO Vs. Prakash Pandurang Patil reported in [2025] 178 Taxmann.com 8 submitted that, the Hon’ble Supreme Court dismissed the SLP filed by the Revenue against the order passed by the Hon’ble High Court of Bombay in the case of Prakash Pandurang Patil Vs. ITO [2025] 177 Taxmann.com 552, and held that where reopening notice issued under Section 148 of the Act by the jurisdictional A.O. without mandatory faceless mechanism as per the provisions of Section 151A is not sustainable and the consequent assessment order passed by the A.O. is invalid. Therefore, he submitted that the order passed by the A.O. should be quashed. 7. The learned Senior A.R. for the Revenue Shri Gurpreet Singh, on the other hand, submitted that since the assessment proceedings before the A.O. is ex parte, the Ld. CIT(A) has rightly given one more opportunity to the assessee to explain his case before the A.O., and once the case has been set aside to the A.O., there is no proceedings pending as of now, and the assessee can challenge the validity of the notice issued by the A.O. at appropriate stage. Therefore, he submitted that there is no error in Printed from counselvise.com 6 ITA No.1283/Hyd/2025 Mohd. Azgar Ali the order passed by the Ld. CIT(A), and thus, the same should be upheld. 8. We have heard both parties, perused the material on record, and had gone through the orders of the authorities below. There is no dispute with regard to the fact that the reassessment proceedings before the A.O. are ex parte because, the assessee neither filed the return of income in response to the notice issued under Section 148 of the Act nor filed any details in response to various notices issued under Section 142(1) of the Act to explain the source for cash deposits in the bank account. Since the assessment proceedings before the A.O. are ex parte, the Ld. CIT(A) has rightly set aside the assessment proceedings to the file of the A.O. with a direction to redo the assessment afresh in accordance with law after providing a reasonable opportunity of being heard to the assessee. 9. Insofar as the arguments of the learned counsel for the assessee in light of the decision of the Hon’ble Supreme Court in the case of ITO Vs. Prakash Pandurang Patil (supra) is concerned, in our considered view, once the proceedings before the A.O. are Printed from counselvise.com 7 ITA No.1283/Hyd/2025 Mohd. Azgar Ali ex parte and the assessee has not availed the opportunity of hearing, the order passed by the Ld. CIT(A) setting aside the issue to the file of the A.O. to give another opportunity of hearing to the assessee is in accordance with law. 10. Further, the assessee can very well challenge the proceedings initiated under Section 147 of the Act by issuing notice under Section 148A(b), order passed under Section 148A(d), and the subsequent notice issued under Section 148 of the Act, in the consequent proceedings before the A.O. Therefore, in our considered view, at this stage, there is no grievance for the assessee to agitate the order passed by the Ld. CIT(A) setting aside the issue to the file of the A.O. Therefore, we are inclined to uphold the order of the Ld. CIT(A) and reject the grounds taken by the assessee. 11. We further make it clear that, the assessee is at liberty to challenge the legality of the reassessment proceedings initiated by the A.O. consequent to the notice issued under Section 148 of the Act, by the jurisdictional A.O. in the consequent assessment proceedings and subsequent proceedings arising on account of the Printed from counselvise.com 8 ITA No.1283/Hyd/2025 Mohd. Azgar Ali pending proceedings before the learned A.O. In other words, we keep open all issues to be adjudicated at the appropriate level and at the appropriate stage. 12. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the Open Court on 8th October, 2025. Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- (मंजूिधथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 08.10.2025. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Shri Mohd Azgar Ali, R/o.H.No.17-561, BNR Colony, Devarakonda, Nalgonda – 508248, Telangana. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward – 1, Nalgonda. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "