RANGEGOWDA NAKOPPALU MURTHY SIDDAPPA ,KOPPALU V. INCOME TAX OFFICER, WARD-1, CHICKMAGALUR

ITA 223/BANG/2025

AI Insights

This case involves an appeal by Shri Rangegowda Nakoppalu Murthy Siddappa, a PWD contractor, against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2017-18. The assessee had not filed his return of income, and the Assessing Officer (AO) treated substantial cash deposits made during the demonetisation period as unexplained investments under section 69 of the Income Tax Act, 1961. The AO also estimated the business income and made the assessment under section 144 of the Act due to non-response from the assessee. The assessee's subsequent appeal to the Ld.CIT(A) was dismissed for non-response to notices. The Tribunal found that the notices were sent to an outdated email ID and not to the assessee directly, leading to a lack of proper opportunity to respond. The Tribunal also noted that the AO did not follow the CBDT circular regarding cash deposits during demonetisation. Consequently, the Tribunal set aside the Ld.CIT(A)'s order and remanded the case for a decision on merits after the assessee pays a cost of Rs. 10,000.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711320 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: REVENUE; GANESH R GHALE
• Assessee Lawyers: GOKUL
• Keywords: Set aside; Business income; Unexplained investment
• Section: 144; 142(1); 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 223/Bang/2025 Assessment Year : 2017-18 Shri Rangegowda Nakoppalu Murthy Siddappa, Pwd Contractor R.G. Koppalu, Kadurhalli Post, Kadur Taluk, Chikkamagalur Dist R.G. Koppalu – 577 548. PAN: CKRPS6702E Vs. The Income Tax Officer, Ward – 1, Chikmagalur. APPELLANT RESPONDENT Assessee by : Shri Gokul, Advocate Revenue by : Shri Ganesh R Ghale, Advocate, Standing Counsel for Revenue Date of Hearing : 14-07-2025 Date of Pronouncement : 25-07-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of NFAC, Delhi dated 09/12/2024 in respect of A.Y. 2017-18. 2. The assessee is a PWD contractor and had not filed his return of income. The AO based on the information that the assessee had made substantial cash deposits during demonetisation period had issued notices Printed from counselvise.com Page 2 of 4 ITA No. 223/Bang/2025 u/s. 142(1) of the Act. The assessee had not responded to the notices and therefore the AO had treated the cash deposits made during the demonetisation period as unexplained investment u/s. 69 of the Act. The AO also estimated the business income and made the assessment u/s. 144 of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A) with a delay of 113 days. The Ld.CIT(A) condoned the said delay in filing the appeal but dismissed the appeal because the assessee had not responded to any of the notices issued by him. 3. As against the said ex-parte order, the assessee is in appeal before this Tribunal. 4. At the time of hearing, the Ld.AR submitted that the notices issued by the AO were not viewed by the assessee since he is not well versed in operating the computer systems. The Ld.AR further submitted by way of synopsis that the various hearing notices were sent to the email ID of the erstwhile employee of the Chartered Accountant office and therefore the assessee has no knowledge about the hearing notices sent by the Ld.CIT(A). The Ld.AR also submitted that the email ID of the assessee was now updated in the income tax portal and also filed the copies of the print out from the portals. The Ld.AR further submitted that the assessee is having all the records in support of his case that there are sources available for the cash deposits made during the demonetisation period. The Ld.AR further submitted that the AO had not followed the circular issued by the CBDT about the cash deposits made during the demonetisation period and prayed that one more opportunity may be granted to appear before the AO. 5. The Ld.DR relied on the orders of the lower authorities and submitted that no lenience could be shown on the assessee. 6. We have heard the arguments of both sides and perused the materials available on record. Printed from counselvise.com Page 3 of 4 ITA No. 223/Bang/2025 7. We have perused the synopsis filed by the assessee and the copy of the notice sent through the portal to the email ID of the erstwhile employee of the Chartered Accountant’s office. We have also perused the print out taken from the portal updating the email ID of the assessee. From the above said facts, we came to know that the notices were issued by the Ld.CIT(A) to the email ID of the erstwhile employee of the Chartered Accountant’s office, who is not in service. The print out taken from the portal of the assessee shows the updated email ID of the assessee and therefore the assessee was not having proper opportunity to appear before the Ld.CIT(A). We have also considered the submission made by the assessee that the AO had also not followed the circular issued by the CBDT in respect of the cash deposited during the demonetisation period. 8. The assessee not only appeared before the Ld.CIT(A) but also before the AO and therefore the AO made a best judgment assessment u/s. 144 of the Act. In such circumstances, to give another opportunity to the assessee, we are inclined to set aside the order of the Ld.CIT(A) on condition that the assessee should pay a sum of Rs. 10,000/- by way of cost to be paid to the Income Tax Department. On such payment and the proof being filed before the Ld.CIT(A), we direct the Ld.CIT(A) to decide the appeal on merits and in accordance with law after hearing the assessee. 9. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on 25th July, 2025. Sd/- Sd/- (LAXMI PRASAD SAHU) (SOUNDARARAJAN K.) Accountant Member Judicial Member Bangalore, Dated, the 25th July, 2025. /MS / Printed from counselvise.com Page 4 of 4 ITA No. 223/Bang/2025 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "