Case Law Details
Venugopal Reddy Yeravally Vs ITO (ITAT Hyderabad)
Introduction: In the case of Venugopal Reddy Yeravally vs. ITO (ITAT Hyderabad), a significant issue arose concerning the denial of opportunity to the assessee due to non-acquaintance with the new procedure of sending notices through email. This resulted in an ex-parte order against the assessee. The Income Tax Appellate Tribunal (ITAT) Hyderabad addressed this issue and set aside the ex-parte order in favor of the assessee.
Detailed Analysis: The case involved Venugopal Reddy Yeravally, an individual and a salaried employee, who faced scrutiny of his income tax return for the assessment year 2017-18. During the assessment, the Assessing Officer noted that the assessee had made a payment of Rs. 13,68,503/- towards discharging credit card payments. Given that the assessee’s income was primarily from salary, the Assessing Officer considered the credit card payments as undisclosed income, subject to taxation.
The assessee contested this addition before the Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi (“CIT(A)”). The assessee provided evidence, including HDFC credit card statements and Form-16, to support his claim that friends and relatives had used his credit cards, and he had subsequently paid the credit card bills from amounts remitted by them.
However, the CIT(A) noted that the assessee had failed to respond to multiple notices specifying hearing dates, and it was assumed that the assessee had no interest in defending the case. As a result, the CIT(A) proceeded ex-parte and upheld the addition to the assessee’s income.
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