DUVVURU RL REDDY

1. The captioned appeals filed by two assessees against the orders of the Ld. CIT(A)-12, dated in appeal Nos. 10461, 10468, 10470, 10459 & 10463/2019-20, dated 24/01/2012 in the case of Jaswanth Siva Dutt Kilaru and Padmaja Rani Kilaru respectively passed U/s. 143(3) r.w.s. 153A of the Act.

2. In the case of Jaswanth Siva Dutt the assessee has raised identical grounds in his three appeals under consideration and therefore for the sake of convenience, reference and adjudication purpose, the grounds raised by the assessee for the AY 2016-17 are extracted herein below:

"1. That under the facts and circumstances of the case, the orders passed by the CIT(A) U/s. 250 of the Act dated 24/01/2022 is not in accordance with the provisions of law.

2. The action of the Ld. CIT(A) in dismissing the appeal filed by the appellant for non-appearance is not sustainable in view of the provisions of section 250(6) where it is obligatory for the CIT(A) to pass a speaking order.

Without prejudice to Ground No. 2.

3. The Ld. CIT(A) by virtue of order passed U/s. 250 of the Act erred in indirectly confirming the additions made by the AO since these additions are outside the scope of assessment made U/s. 153A of the IT Act.

4. The Ld. CIT(A) by virtue of order passed U/s. 250 of the IT Act erred in indirectly confirming the estimation of income at 20% on the credits appearing in bank account, as against the profit percentage adopted by the assessee i.e. 8% this resulted in addition of Rs. 15,67,961/-.

5. The Ld. CIT(A) by virtue of order passed U/s. 250 of the IT Act erred in indirectly confirming the estimation of income at 50% on the receipts from Telugu Desam Party, as against the profit percentage adopted by the assessee i.e. at 8%, this resulted in addition Rs. 8,35,800/-.

6. The Ld. CIT(A) by virtue of order passed U/s. 250 of the Act erred in indirectly confirming the addition made of Rs. 18,45,345/- towards alleged cash receipts, recorded in the seized document vide Annexure No. -A-KVS/RES/01, as alleged unexplained income of assessee, without considering the submissions made by the assessee.

7. For these and such other grounds that may be urged at the time of hearing subject appeal the appellant prays that the orders of the Ld. CIT(A) passed U/s. 250 of the Act are to be set aside."

3. Brief facts of the case pertaining to the AY 2016-17 are that the assessee is an individual engaged in the business under the name and style of 'M/s. Ambica's Catering and events organization'. A search and seizure operation U/s. 132 of the Act was conducted on 25/10/2017 in the case of the assessee. Subsequently, notice U/s. 153A was issued and served on the assessee calling for return of income. Originally, the assessee filed his return of income U/s. 139(4) of the Act on 27/10/2016 declaring total income of Rs. 7,52,150. Again in response to the notice U/s. 153A of the Act the assessee has filed the revised return of income on 10/11/2018 declaring total income of Rs. 13,61,070/- and thus the assessee has declared an additional income to the extent of Rs. 6,08,920/- in response to the notice U/s. 153A of the Act. Statutory notices U/s. 143(2) and 142(1) were served on the assessee calling for certain information. In response the assessee's representative furnished the information. On perusal of the assessee's submissions, the Ld. AO was of opinion that the assessee has not disclosed income aggregating to Rs. 24,03,761/- and has also not offered any explanation with regard to gross receipts of Rs. 18,45,345/-. Accordingly, the Ld. AO computed the total income of the assessee and determined the assessed income at Rs. 56,10,176/- which includes addition of Rs. 24,03,761/- as undisclosed income and Rs. 18,45,345/- as unexplained U/s. 68 of the Act. Aggrieved by the order of the Ld. AO, the assessee went on appeal before the Ld. CIT(A). Before the Ld. CIT(A) none appeared on behalf the assessee as well as for the Department and therefore, the Ld. CIT(A), dismissed the appeal of the assessee in-limine. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.

4. At the outset, the Ld. AR submitted that the Ld. CIT(A) had passed the order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld. CIT(A) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, none appeared on behalf of the assessee nor made any submissions in support of its claim. Therefore the Ld. CIT(A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.

5. We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that the Ld. CIT(A) had posted the case on several occasions. However, there was no representation on behalf of the assessee before the Ld. CIT(A). Therefore, the Ld. CIT(A) was left with no other option except to adjudicate the appeal based on the material available on record. In this situation, we are of the considered view that the when there is no representation on behalf of the assessee, the First Appellate Authority ought to have decided the issues on merits and in accordance with law instead of simply dismissing the appeal in limine. Therefore, following the principles of natural justice as well as considering the prayer of the Ld. AR and also the issues involved in the appeal, in the interest of justice, we hereby remit the matter back to the file of Ld. CIT(A) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT(A) in the proceedings failing which the Ld. CIT(A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on record. It is ordered accordingly.

6. In the result, appeal (ITA No. 43/Viz/2022) filed by the assessee for the AY 2016-17 is allowed for statistical purposes as indicated hereinabove.

7. Since the facts and circumstances in the rest of the two appeals are akin to the assessee's appeal for the AY 2016-17, which is decided by us in the above paras of this order, our decision given therein squarely applies to the other two appeals ie., ITA No. 44 & 45/Viz/2022 for the AY 2017-18 and 2018-19. Accordingly, these two appeals of the assessee for the AY 2017-18 and 2018-19 are also allowed for statistical purposes in same lines as indicated above.

8. Resultantly, three appeals filed by the assessee in the case of Jaswanth Siva Dutt Kilaru are allowed for statistical purposes.

I.T.A. No. 46, 47 & 48/Viz/2022

9. In the case of Padmaja Rani Kilaru the assessee has raised identical grounds in her three appeals under consideration and therefore for the sake of convenience, reference and adjudication purpose, the grounds raised by the assessee for the AY 2013-14 are extracted herein below:

"1. That under the facts and circumstances of the case, the orders passed by the CIT(A) U/s. 250 of the Act dated 24/01/2022 is not in accordance with the provisions of law.

2. The action of the Ld. CIT(A) in dismissing the appeal filed by the appellant for non-appearance is not sustainable in view of the provisions of section 250(6) where it is obligatory for the CIT(A) to pass a speaking order.

Without prejudice to Ground No. 2.

3. The Ld. CIT(A) by virtue of order passed U/s. 250 of the IT Act erred in indirectly confirming the assessment made U/s. 153C of the Act and addition made thereto as valid, without there being any incriminating material found/seized during the course of search operations in the case of searched persons pertaining to this assessee.

4. The Ld. CIT(A) by virtue of order passed U/s. 250 of the Act erred in indirectly confirming the addition made by the AO amounting to Rs. 4,95,000/- towards the deposits made in bank account of the assessee, without considering the submissions made in this regard.

5. For these and other grounds, that may be urged at the time of hearing of subject appeal, the appellant prays that the orders of the Ld. CIT(A) U/s. 250 of the Act are to be set aside."

10. Brief facts in the case of Padmaja Rani Kilaru pertaining to AY 2013-14 are that the assessee is engaged in the business of trading in Aqua Supplement in the name and style of "M/s. Jaswanth Acquaceutics". Mrs. Padmaja Rani Kilaru is the wife of Kilaru Venkata Sivaji, who is engaged in the business under the name and style of 'M/s. Ambica's Catering and Events Organization'. When a search and seizure operation U/s. 132 of the Act was conducted on 25/10/2017 in the case of Kilaru Venkata Sivaji & others certain incriminating material pertaining to the assessee was found and subsequently a notice U/s.153C was issued to the assessee called for the return of income. In response to the notice U/s. 153C, the assessee filed return of income declaring total income of Rs. 52,770/-. Prior to this, the assessee has not filed any return. Accordingly, statutory notices U/s. 143(2) and 142(1) were issued and served on the assessee calling for certain information. In response the assessee's representative appeared and furnished certain information. On perusal of the submissions made by the assessee's representative and also based on the material found during the search, the Ld. AO found certain cash deposits in the bank account of the assessee to the extent of Rs. 4,95,000/- and since the assessee could not offer any explanation and supporting documents to substantiate the said cash deposits, the Ld. AO added the same amount of Rs. 4,95,000/- to the total income of the assessee as unexplained cash credits U/s. 68 of the Act and determined the total income at Rs. 5,47,270/-. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A) none appeared on behalf the assessee as well as for the Department and therefore, the Ld. CIT(A), dismissed the appeal of the assessee in-limine. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us.

11. At the outset, the Ld. AR submitted that the Ld. CIT(A) had passed the order without providing proper opportunity to the assessee of being heard. It was therefore pleaded that the matter may be remitted back to the file of the Ld. CIT(A) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the assessee however, on the given dates of hearing, none appeared on behalf of the assessee nor made any submissions in support of her claim. Therefore the Ld. CIT(A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(A) does not call for any interference.

12. We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we find that the Ld. CIT(A) had posted the case on several occasions. However, there was no representation on behalf of the assessee before the Ld. CIT(A). Therefore, the Ld. CIT(A) was left with no other option except to adjudicate the appeal based on the material available on record. In this situation, we are of the considered view that when there is no representation on behalf of the assessee, the First Appellate Authority ought to have decided the issues on merits and in accordance with law instead of simply dismissing the appeal in limine. Therefore, following the principles of natural justice as well as considering the prayer of the Ld. AR and also the issues involved in the appeal, in the interest of justice, we hereby remit the matter back to the file of Ld. CIT(A) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT(A) in the proceedings failing which the Ld. CIT(A) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on record. It is ordered accordingly.

13. In the result, appeal (ITA No. 46/Viz/2022) filed by the assessee for the AY 2013-14 is allowed for statistical purposes as indicated hereinabove.

14. Since the facts and circumstances in the rest of the two appeals are akin to the assessee's appeal for the AY 2013-14, which is decided by us in the above paras of this order, our decision given therein squarely applies to the other two appeals ie., ITA No. 47 & 48/Viz/2022 for the AY 2015-16 and 2016-17. Accordingly, these two appeals of the assessee for the AY 2015-16 and 2016-17 are also allowed for statistical purposes in same lines as indicated above.

15. Resultantly, three appeals filed by the assessee in the case of Padmaja Rani Kilaru are allowed for statistical purposes.

16. Ex-consequenti, all the six appeals filed by the two assessees are allowed for statistical purposes.