KADAVINAKOTE MARIGOWDA HONNAPPA,HASSAN vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1, HASSAN, HASSAN

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ITA 1919/BANG/2026Status: DisposedITAT Bangalore29 June 2026AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the ex-parte order of the CIT(A) and remitted the issue back for a decision on merits. The assessee was granted one more opportunity to appear before the CIT(A).

What were the facts?

The assessee, running a wine shop, had deposits during demonetization treated as unexplained cash credits. The CIT(A) dismissed the appeal ex-parte due to the assessee's non-appearance.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal ex-parte without deciding on merits, and whether the assessee should be granted another opportunity to present their case.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH : BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI SOUNDARARAJAN K.

For Appellant: Ms. Ema Bindu, Advocate, Shri Ganesh R Ghale, Standing

IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH : BANGALORE

BEFORE SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER

ITA No. 1919/Bang/2026 Assessment Year : 2017-18

Shri Kadavinakote The Assistant Marigowda Honnappa, Commissioner of M/s. Harsha Wines, Income Tax, Holenarasipura, Circle – 1, Hassan – 573 211. Hassan. Vs. PAN: AAEPH0106Q APPELLANT RESPONDENT

Assessee by : Ms. Ema Bindu, Advocate : Shri Ganesh R Ghale, Standing Revenue by Counsel for the Dept. Date of Hearing : 11-06-2026 Date of Pronouncement : 29-06-2026 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 02/02/2026 in respect of the A.Y. 2017-18.

2.

The brief facts of the case are that the assessee is running a wine shop and filed his return of income on 06/11/2017. The return was processed u/s. 143(1) of the Act. Subsequently, the case was selected for complete scrutiny and notices u/s. 143(2) and 142(1) were issued. The assessee also filed the details. The AO on the basis that the assessee had deposited SBN during the demonetization period which is not a permissible one, therefore treated the deposits over and above the opening balance as

Page 2 of 3 ITA No. 1919/Bang/2026 unexplained cash credits u/s. 68 of the Act. The AO also restricted the agricultural income and treated the balance as income from other sources.

3.

As against the order, the assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal for the reason that the assessee had not appeared before him.

4.

As against the said ex-parte order, the present appeal has been filed before this Tribunal.

5.

At the time of hearing, the Ld.AR submitted that the assessee had remitted almost 60% of the tax demand and also submitted that bank account has been attached and prayed to grant an opportunity to appear before the Ld.CIT(A). The Ld.AR filed the copy of the Form 26AS and tax payment details.

6.

The Ld.DR submitted that there is no valid reason for not appearing before the Ld.CIT(A) and prayed to dismiss the appeal.

7.

We have heard the arguments of both sides and perused the materials available on record.

8.

The AO had made the addition u/s. 68 of the Act since the assessee had made deposits in SBN during the demonetization period. It is the case of the assessee that the cash was received through the sale of liquor. Similarly the assessee submitted that the disallowance of agricultural income is also without any basis.

9.

The Ld.CIT(A) had no opportunity to decide the appeal on merits since the assessee had not appeared. We have also seen that the Ld.CIT(A) had granted only three opportunities that too within a period of two months. Therefore, in the interest of justice, we are inclined to grant one more opportunity to the assessee to appear before the Ld.CIT(A). We, therefore,

Page 3 of 3 ITA No. 1919/Bang/2026 set aside the ex-parte order of the Ld.CIT(A) and remit this issue to the file of the Ld.CIT(A) to decide the issue on merits after granting a reasonable opportunity of being heard to the assessee.

10.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 29th June, 2026.

Sd/- Sd/- (BALAKRISHNAN S) (SOUNDARARAJAN K.) Accountant Member Judicial Member

Bangalore, Dated, the 29th June, 2026. /MS /

Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order

Assistant Registrar, ITAT, Bangalore

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