Kondragunta Seshu Babu Vs ITO (ITAT Bangalore)
The Bangalore SMC Bench of the ITAT set aside the reassessment framed u/s 147 r.w.s. 144 & 144B and restored the entire matter to the file of the Assessing Officer, holding that the Assessee was not afforded a fair and effective opportunity of hearing either at the assessment stage or in appeal.
The Assessee, a small agriculturist with no prior history of filing returns, was subjected to reassessment based on information that he had purchased an immovable property for ₹12.48 lakh during FY 2018-19. As the Assessee did not file a return nor respond to notices issued u/s 148, 142(1) and show-cause u/s 144, the AO completed the assessment ex-parte and made an addition u/s 69 treating the investment as unexplained.
The NFAC (CIT(A)) also dismissed the appeal ex-parte, noting non-appearance and confirming the addition.
Before the Tribunal, the Assessee contended that:
- He was illiterate, unaware of tax proceedings and had never been assessed earlier,
- He did not receive or understand the notices, and
- The notice u/s 148 was issued by the jurisdictional AO instead of faceless AO, rendering the reopening invalid in view of Karnataka HC decision in Ramachandra Reddy Ravikumar.
The Tribunal noted that although the legal issue regarding invalid issuance of notice was specifically raised and supported by jurisdictional High Court precedent, the Assessee had admittedly not appeared at any stage earlier.
In the interest of justice, and with consent of both sides, the ITAT restored the entire matter to the AO, keeping all issues open, including:
