EERANOLLA LOKESWARA,ANDHRA PRADESH vs. ACIT CENTAL CIRCLE 1(2), CHENNAI

Since the identical facts and common issues are involved in all the above captioned five appeals of the Assessee, we proceed to dispose of the same by this common order.

For the sake of convenience and clarity, the facts relevant to the appeal of the Revenue in ITA No.285/CHNY/2026 for the assessment year 2015-16 are stated herein.

The Assessee raised the following grounds of appeal :

Briefly, the facts of the case are that the appellant is an Individual. No regular Return of Income under the provisions of section 139 of the Income Tax Act, 1961 was filed for the Assessment Year 2015-16. However, based on the incriminating material unearthed during the course of search and seizure operations conducted in the case of Golden Shelter Private Limited and N.V.Krishna Group on 16.10.2019 indicating receipt of share capital or advance / unsecured loans which are unaccounted, the Assessing Officer initiated proceedings u/s.153C of the Income Tax Act, 1961 on 27.09.2021. According to the Assessing Officer, the appellant had not filed the Return of Income in response to notice u/s.153C of the Act, therefore proceeded to make the best judgment assessment vide order dated 27.09.2021 passed u/s.153C r.w.s 144 of the Income Tax Act, 1961 at a total income of Rs.1,50,000/-. While doing so, the Assessing Officer made addition of Rs.1,50,000/- being the amount received towards share application money from N.K.V. Krishna Group. The factual background leading to the above addition is as under :

1 According to the Assessing Officer, the appellant is an Administrator and PRO in Golden Shelter Private Limited looking after land transactions of Mr.NKV Krishna. It is stated that during the course of search and seizure operations in the residential premises of one Mr.Badri Narayan Chaudhary Kota who is a friend and also the Director in the Group Companies belonging to Mr.NKV Krishna, a pen drive was found and seized vide ANN/KP/BNC/ED/S1-(3) on 17.10.2019, the information retrieved from pen drive revealed that unaccounted cash payments were made to the appellant on various occasions. When this information was confronted with Mr.Badri Narayan Kota and Mr.NKV Krishna, this information was confirmed by them during the source the sworn statement recorded from them. On 16.10.2019 statement was also recorded from Mr.NKV Krishna on 24.10.2019, they confirmed having made the payments to the appellant as under :

Based on the above information, the appellant was called- upon to explain the source of the money received. However, the appellant neither complied with the show cause notice, nor notice u/s.142(1) of the Income Tax Act, 1961. In the circumstances, the Assessing Officer had proceeded with making the best judgment assessment by bringing tax the amount received during the previous year of Rs.1,50,000/-.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A) contending that no addition can be made in the assessment made pursuant to notice issued u/s.153C in the absence of any incriminating material available with the Assessing Officer. In this connection, the appellant also relied upon numerous judicial precedents :  Pr.CIT Vs. Meeta Gutgutia [2018] 96 taxmann.com 468/257 Taxmann 441  CIT Vs. Shetty Pharmaceuticals & Biological Ltd. 232 Taxman 0268(Andhra Pradesh HC)  Hon’ble High Court of Madhya Pradesh High Court decision in the case of CIT Vs. Mechmen in ITA No.44/2011, ITA No.45/2011 & Others.  Hon’ble Bombay High Court decision in the case of Director of Income Tax Vs. M/s.Ingram Micro (India) Exports Pte Ltd. In ITA No.1337 of 2013 & Others.

It was further contended that the Assessing Officer failed to record satisfaction as envisaged u/s.153C of the Act it was also contended that Assessing Officer completed the assessment without issuing notice u/s.143(2) of the Income Tax Act. The ld.CIT(A) had called for the remand report from the Assessing Officer and also further directed the Assessing Officer to furnish copes of statement recorded from Mr.Badri Narayan Kota and Mr.NKV Krishna to the appellant. On going through the copes of statement recorded from Mr.NKV Krishna and Mr. Badri Narayan Kota, the Assessee had denied having received any money and also submitted that loose sheets does not form the basis for making addition. However, the ld.CIT(A) on due consideration of submissions made by the appellant came to conclusion that in the absence of any dispute with regard to service of notice u/s.153C of the Act since no Return of Income was filed in response to notice u/s.153C of the Act, there was no occasion for the Assessing Officer to issue notice u/s.143(2) of the Income Tax Act. As regards the merits of addition, the ld.CIT(A) confirmed the addition by holding that the appellant had failed to discharge the onus of proving the identity, genuineness of towards creditworthiness of the persons who gave the money, accordingly, confirmed the action.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. The Learned AR contended that the proceedings u/s.153C of the Act are vitiated in law as the Assessing Officer recorded a consolidated satisfaction note for the Assessment Year 2015-16 to 2020-21 i.e.27.09.2021, it is contended that recording of the consolidated satisfaction note for multiple assessment years is legally invalid and bad in law rendering the proceedings initiated u/s.153C of the Act as void ab initio. Reliance in this regard is placed on the following decisions :  Hon’ble ITAT Chennai in the case of Rangamani Krishna Vs. DCIT [2025] 1769 taxmann.com 912 (Chennai Tribunal).  Hon’ble ITAT Pune in the case of DCIT Vs. Abhayraj Fattehraj Chordiya.  Hon’ble ITAT Pune in the case of Rajendra Rameshlal Gugale, Pune vs. Pr.CIT issued 30.12.2024. 10. It is further submitted that in the absence of any incriminating evidence found, no addition can be made in the assessment made u/s.153C of the Act placing reliance on the following decisions.  DCIT Vs. Sunil Kumar Sharma [2024] 159 taxmann.com 179  Hon’ble Supreme Court in the case of DCIT Vs. Sunil Kumar Sharma [2024] 168 taxmann.com 77 (SC) 469 ITR 271 (SC)

It is further submitted that the appellant had filed Return of Income in response to notice u/s.153C of the Act on 29.09.2021. It is further submitted that there was no evidence on record to show that the appellant had received unaccounted cash of Rs.1,50,000/-.

On the other hand, Learned CIT-DR vehemently opposed the above submissions and submitted that despite the opportunity given to the appellant, the appellant had not responded to the notice u/s.153C of the Act. The Assessing Officer completed the assessment after duly following the procedure laid down u/s.153C of the Act. The appellant was also given opportunity to confront the statement of Mr.Badri Narayan Chaudhary Kota and Mr.NKV Krishna despite giving several opportunities, the assessee had failed to respond to the notices. Thus, the Assessing Officer brought on record on clinching money of Rs.1,50,000/- and accordingly made addition. The ld.CIT(A) on proper appreciation with evidence on record had sustained the addition and therefore, no interference by this Tribunal is warranted.

We heard rival submissions and perused the material available on record.

Ground No.1 and 7 are general in nature do not require any adjudication.

Ground No.2 challenges the validity of the assessment proceedings initiated u/s.153C of the Act on the ground that the Assessing Officer had proceeded to frame the assessment without recording a satisfaction note. This contention of the appellant cannot be accepted for the reason that the appellant himself in the paper book enclosed the satisfaction recorded by the Assessing Officer as envisaged u/s.153C of the Act. Therefore, we do not find any merit in the Ground No.

Accordingly, Ground No.2 raised by the assessee is dismissed.

Ground No.3 the appellant had challenged the addition made in the assessment made u/s.153C r.w.s 143 of the Act on the ground that in the absence of incriminating material, no addition can be made. On mere reading of the assessment order, it would be crystal clear that the Assessing Officer had made addition based on the incriminating material found in the case of Mr.Badri Narayan Chaudhary Kota during the course of search and seizure operations in the premises NKV Krishna on 16.10.2019 found. The information retrieved from pen drive clearly revealed that the appellant had received money the source of which was not explained by the appellant. Thus, we do not find any merit in this Ground No.3, accordingly, Ground No.3 raised by the assessee is dismissed.

Ground No.4 challenges the validity of the assessment order without issuing a notice u/s.143(2) of the Act. A noted by us(supra), the appellant had not filed Return of Income within the due date in response to notice u/s.153C of the Act. Therefore, there is no occasion for the Assessing Officer to issue notice u/s.143(2) of the Act before framing the assessment order. Thus, we do not find any merit in the ground no.4 raised by the assessee, accordingly dismissed.

Ground No.5 and 6 challenges the action of the Assessing Officer in making addition of Rs.1,50,000/-. The assessment order came to be passed u/s.144 of the Act, no pleadings were placed before us as to how assessee was prevented from causing appearance before the Assessing Officer. During the course of proceedings before the ld.CIT(A), the ld.CIT(A)had directed the Assessing Officer to furnish the copies of the statement recorded from Mr.Badri Narayan Chaudhary Kota and Mr.NKV Krishna. On going through the statement, the appellant hd not asked for any cross-examinations of those two persons, nor controverted the statements of these two persons who have stated that the appellant had received unaccounted money. Thus, we do not find any merit in this ground of appeal no.5 and 6, accordingly, Ground No.5 and 6 are dismissed.

In the result, appeal filed by the assessee is dismissed. ITA Nos.286 to 289/CHNY/2026, A.Ys. 2016-17 to 2019-20 (by Assessee) :

Since the facts and issues involved in remaining four appeals of the Assessee are identical, therefore, our decision in ITA No.285/CHNY/2026 for A.Y. 2015-16 shall apply mutatis mutandis to the remaining four appeals of the Assessee in ITA Nos.286 to 289/CHNY/2026 for A.Ys. 2016-17 to 2019-20 respectively. Accordingly, the remaining four appeals of the Assessee in ITA Nos.286 to 289/CHY/2026 for A.Ys. 2016-17 to 2019-20 stands dismissed.

To sum up, all the above captioned five appeals of the Assessee stands dismissed. Order pronounced in the open Court on 12th August, 2026. (SS VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 12th Aug, 2026 SGR, Sr.PS आदेश क" "ितिलिप अ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.