INCOME TAX OFFICER, WARD-3(1), HYDERABAD vs. DASHRATHA RAMARAO SURYANENI, HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� एवं �ी मधुसूदन साविड़या लेखा सद� सम� | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No. 1564/Hyd/2025 (िनधा�रण वष�/Assessment Year: 2017-18) Income Tax Officer Vs. Shri Dashratha Rama Ward 3 (1) Rao Suryaneni, Hyderabad Hyderabad PAN: BZJPS1693A (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: Adv. A.V. Raghuram राज� व �ारा/Revenue by: Shri Mohan Babu, Sr. AR सुनवाई की तारीख/Date of hearing: 28/07/2026 घोषणा की तारीख/Pronouncement: 23/09/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by the Revenue, feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) (“Ld. CIT(A)”) dated 01.07.2025 for the A.Y. 2017-18. 2. The Revenue has raised the following grounds of appeal:

Rs.1,85,450/-. The case of the assessee was selected for scrutiny. However, in the absence of satisfactory compliance on the part of the assessee, the Assessing Officer completed the assessment under section 144 of the Income Tax Act, 1961 (“the Act”) vide order dated 26.12.2019, making separate additions of Rs.10,00,000/-, Rs.24,39,200/-, Rs.63,48,530/- and Rs.39,00,000/-, all under section 69A of the Act. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). During the course of appellate proceedings, the assessee filed certain additional evidence in support of his contentions. The Ld. CIT(A) forwarded the additional evidence to the Assessing Officer and called for a remand report. After considering the remand report furnished by the Assessing Officer, the Ld. CIT(A) deleted all the additions made by the Assessing Officer and accordingly allowed the appeal of the assessee. 5. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us. At the outset, the Learned Departmental Representative (“Ld. DR”) submitted that the Ld. CIT(A) has deleted the entire additions made by the Assessing Officer under a misconception that the Assessing Officer had accepted the submissions and explanations furnished by the assessee during the remand proceedings. Inviting our attention to para nos. 6 to 6.4 of the impugned order, wherein the Ld. CIT(A) has also reproduced the relevant portion of the remand report of the Assessing Officer, the Ld. DR submitted that the Assessing Officer had merely concluded that the additional evidence filed by the assessee “may be accepted”. According to the Ld. DR, the said observation only related to the

acceptance/admission of the additional evidence and could not be construed as acceptance of the assessee’s explanation on merits. The Ld. DR further submitted that the Ld. CIT(A), proceeding on the misconception that the Assessing Officer was satisfied with the explanation furnished by the assessee in the remand proceedings, deleted the entire additions without independently examining the documentary evidence, including the additional evidence filed by the assessee, and without recording any specific finding on the merits of the additions. Accordingly, the Ld. DR submitted that the impugned order of the Ld. CIT(A) is liable to be set aside and the matter requires fresh adjudication. 6. Per contra, the Learned Authorized Representative (“Ld. AR”) relied upon the order of the Ld. CIT(A). Inviting our attention to the relevant portion of the remand report reproduced in the impugned order, the Ld. AR submitted that the Assessing Officer, after examining the material furnished by the assessee during the remand proceedings, had categorically recorded his satisfaction and had concluded that the additional evidence may be accepted. Therefore, according to the Ld. AR, the Ld. CIT(A) was justified in deleting the additions made by the Assessing Officer and there is no infirmity in the impugned order warranting interference by the Tribunal. 7. We have heard the rival submissions and perused the material available on record. We have also gone through para nos. 6 to 6.4 of the order of the Ld. CIT(A), wherein the Ld. CIT(A), while recording his findings, has reproduced the

relevant portion of the remand report furnished by the Assessing Officer, the same is reproduced as under:

substantial additions under section 69A of the Act were made by the Assessing Officer and the assessee sought to rebut the same by filing additional documentary evidence before the Ld. CIT(A), it was incumbent upon the Ld. CIT(A) to examine such evidence and record specific findings as to whether the assessee had satisfactorily explained the nature and source of the amounts in question. The remand report of the Assessing Officer was undoubtedly a relevant material for consideration, but the same could not substitute the independent adjudication required to be undertaken by the Ld. CIT(A). 9. In view of the above facts and circumstances, we are of the considered opinion that the issues require fresh examination at the level of the Ld. CIT(A). Accordingly, without expressing any opinion on the merits of the additions, we set aside the impugned order of the Ld. CIT(A) and restore the entire matter to his file with a direction to re-adjudicate the issues on merits after examining all the documentary evidence available on record, including the additional evidence filed by the assessee during the first appellate proceedings. The Ld. CIT(A) shall also take into consideration the remand report furnished by the Assessing Officer and thereafter record independent and reasoned findings with respect to each of the additions made by the Assessing Officer. Needless to say, the assessee shall be afforded reasonable opportunity of being heard and shall be at liberty to furnish such further explanation or supporting material as may be permissible in accordance with law.