MALLAPPA GONGALLA,HYDERABAD vs. INCOME TAX OFFICER, WARD-7(1), HYDERABAD, HYDERABAD

At the outset, there is a delay of 168 days in filing the present appeal before the Tribunal. The assessee has filed an affidavit explaining the reasons for the delay. The learned counsel for the assessee, Shri A.V. Raghuram, Advocate, referring to the affidavit filed by the assessee, submitted that the impugned order passed by the learned CIT(A), dated 21.02.2025 was assumed to have been received by the assessee on the same day and the appeal against the said order was required to be filed on or before 30.04.2025. However, the appeal came to be filed on 14.10.2025, resulting in a delay of 168 days.

It was further submitted that during the course of appellate proceedings, the assessee had filed submissions before the learned CIT(A) on 11.11.2022 and 04.09.2024 and, thereafter, no further communication was received from the learned CIT(A). The learned counsel for the assessee submitted that the assessee came to know about the dismissal of the appeal only upon receipt of an outstanding demand intimation from the A.O. on 19.09.2025. Thereafter, the assessee forwarded the said communication to the counsel for taking appropriate steps. When the counsel logged into the income-tax portal to verify the status of the appeal, it was 3 noticed that the learned CIT(A) had already dismissed the appeal vide order dated 21.02.2025. Immediately thereafter, the counsel advised the assessee to file an appeal before the Tribunal. It was further submitted that due to the advanced age of the assessee, who is a retired Government employee, he could not immediately meet the counsel and approached him only on 14.10.2025. Accordingly, the present appeal was prepared and filed on the same day, resulting in a delay of 168 days. It was also submitted that the delay had occurred due to bona fide reasons beyond the control of the assessee and not on account of any deliberate negligence or mala fide intention. Therefore, it was prayed that the delay of 168 days in filing the appeal may kindly be condoned in the interest of justice.

The learned Senior A.R. for the Revenue, Shri B. Laxmi Kanth, on the other hand, opposed the condonation petition filed by the assessee. He submitted that the assessee has failed to file the appeal within the prescribed period and, therefore, the delay may not be condoned. However, he fairly submitted that the issue may be decided in accordance with law on the basis of the facts and material available on record.

We have heard both the parties, perused the petition and affidavit filed by the assessee seeking condonation of delay of 168 days in filing the appeal before the Tribunal. We find that, the reasons explained by the assessee appear to be genuine and bona fide and come under sufficient cause'. We further find that, the Hon'ble Supreme Court in the case of Collector, Land Acquisition Vs. Mst. Katiji, reported in 167 ITR 471 (SC), has laid down certain principles for condoning the delay and directed that a lenient approach should be followed to avoid dismissal of meritorious cases on technical grounds. Going by the principles laid down in Mst. Katiji (supra), and also considering the submissions of the assessee, we condone the delay of 168 days in filing the appeal before the Tribunal and admit the appeal for adjudication, but subject to the assessee paying a sum of Rs. 5,000/- (Rupees Five Thousand only) to the Bar Association, ITAT, Hyderabad, within 15 days from the date of receipt of this order and furnishing proof of such payment to the Registry.

The brief facts of the case are that the assessee is a senior citizen aged about 70 years and retired from the State Government of Telangana and is drawing monthly pension of around

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee claimed that the source for the cash deposits was out of past savings, being cash withdrawals from the very same bank account and also amounts received from his son on various occasions. To support his contentions, the assessee furnished the relevant bank account statements along with the bank account statements of his son and daughter-in-law and their ITRs filed for A.Ys. 2015-16 and 2016-17. The learned CIT(A), after considering the relevant submissions of the assessee and also taking note of the relevant facts, observed that the assessee failed to explain the source for the cash deposits with a known source of income by filing supporting evidence. Further, the assessee failed to establish as to why the huge cash had to be withdrawn only to be deposited again after a gap of 9 to 15 months. The argument seems to be an afterthought, and the assessee is trying to defraud the Government by wrong claims by resorting to such documents without any proof. Therefore, the learned CIT(A) rejected the explanation of the assessee and sustained the addition made by the A.O. towards cash deposits under section 69A of the Income- tax Act, 1961. 7

Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri A.V. Raghuram, Advocate, submitted that the learned CIT(A) erred in sustaining the addition made towards cash deposits under section 69A of the Act, without considering the explanation of the assessee with regard to the source for the cash deposits. The learned counsel for the assessee further submitted that the assessee, being a pensioner, does not have any other source of income except pension income. The assessee has withdrawn cash from the bank out of his pension income and also received amounts from his son on various occasions for his maintenance and medical expenses. The balance amount, after meeting all the expenses, has been deposited into the bank account during the demonetization period. The learned counsel for the assessee further submitted that, assessee has filed the bank statements and the ITRs filed for both the assessment years i.e., A.Ys. 2015-16 and 2016-17 and from the details submitted by the assessee, it is very clear that, his son is having substantial income from salary, out of which he has given amounts to his father for various purposes. Although the 8 assessee has justified the source for the cash deposits, but the A.O. and the learned CIT(A), ignored the evidence submitted by the assessee and the Ld. CIT(A) sustained the addition made by the A.O. under section 69A of the Act. Therefore, he submitted that addition should be deleted. The learned counsel for the assessee further submitted that the A.O. erred in levying tax at the higher rate of 60% under section 115BBE of the Act, since the amendment to section 115BBE came into effect from 01.04.2017 and is applicable only from A.Y. 2018-19. In this regard, he relied upon certain judicial precedents, including the decision of the Hon'ble Rajasthan High Court in the case of Deepak Maratha Vs. Union of India and others in Civil Writ Petition No.3625/2020 dated 27.05.2026. 10. The learned Senior A.R. for the Revenue, Shri Laxmi Kanth, on the other hand, supporting the orders of the A.O. and the learned CIT(A), submitted that the assessee had made cash deposits of Rs.17,00,000/- on one day, during the demonetization period. The explanation of the assessee lacks credible evidence going by the income earned by the assessee and the amount of cash deposits. Although the assessee claims to have explained the 9 source out of cash withdrawals from his pension amount and amount received from his son but has not explained the nexus between the cash deposit and the amount withdrawn from the bank. The affidavit of the son is a self-serving document and does not help the case of the assessee. Therefore, the learned Senior A.R. for the Revenue submitted that the A.O. and the learned CIT(A), after considering relevant facts, have rightly made addition towards cash deposits under section 69A of the Act, and thus, the order of the learned CIT(A) should be upheld.

We have heard both parties, perused the material available on record, and had gone through the orders of the authorities below. There is no dispute with regard to the amount of cash deposits of Rs.19,10,000/- into the bank account during the demonetization period and the explanation of the assessee before the A.O. and learned CIT(A). The dispute is only with regard to the source for the cash deposits. In fact, the assessee has explained the source for the cash deposits out of past savings, being cash withdrawals from the very same bank account out of his pension income and also a sum of Rs.15,00,000/- received from his son on various dates from his salary income. The assessee has explained that the 10 source for the cash deposits was out of cash withdrawals from SBI, Hyderabad, during the period from 01.04.2015 to 31.12.2016 and claimed that he had withdrawn a sum of Rs. 7,94,000/- during the above period for personal expenses. The assessee further explained that he has received a sum of Rs.15,00,000/- from his son out of his salary income for various purposes, including regular maintenance and out of amount received from his son and cash withdrawals from the bank account, after meeting the personal expenditure, the unspent amount of Rs. 19,10,000/- has been deposited during the demonetization period. The assessee has furnished the affidavit of his son along with his income-tax particulars.

We have gone through the relevant details filed by the assessee and find that, the assessee's son and daughter-in-law derived substantial income from salary for the past several years. From the income declared by his son and daughter-in-law, there is no difficulty to explain the amount given to the assessee out of natural love and affection. Further, the assessee had also periodically withdrawn Rs. 7,94,000/- from his bank account out of his pension income and, going by the size of the family, the 11 explanation of the assessee, that he has saved substantial amount out of such withdrawals also appears to be bona fide and acceptable. Since the A.O. has not disputed the claim of the assessee, in our considered view, the explanation offered by the assessee towards the source for the cash deposits needs to be accepted. The A.O., without appreciating the relevant facts, simply made addition of Rs.19,10,000/- only, on the ground that the assessee had made cash deposits during the demonetization period, even though the assessee had explained the source. In our considered view, once a person is in possession of any amount, the same needs to be deposited into the bank account, otherwise, the money possessed by that person becomes useless, more particularly, when the Government had withdrawn the circulation of Specified Bank Notes during the demonetization period. Since the assessee is a retired Government employee deriving income only from pension, in our considered view, the cash deposited into bank account cannot be considered as unexplained money when the assessee has explained the source out of known sources of income, including the amounts received from family members. The learned CIT(A), without considering the relevant facts, simply sustained the addition made by the A.O. Thus, we set aside the 12 order of the learned CIT(A) and direct the A.O. to delete the addition of Rs.19,10,000/- made under section 69A of the Income- tax Act, 1961. 13. In the result, the appeal of the assessee is allowed.

The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file