NAYEEM MOHAMMAD,MAHBUBNAGAR vs. ITO, WARD -1, MAHBUBNAGAR

PDF · subscribers
ITA 343/HYD/2026Status: DisposedITAT Hyderabad20 May 2026AY 2017-1811 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not validly served with notices and the order of the CIT(A) dismissing the appeal for non-prosecution was set aside. The matter was remanded to the CIT(A) for fresh adjudication after providing proper notice.

What were the facts?

The Assessing Officer made an addition of Rs. 27 lakhs under Section 69A for unexplained cash deposits made during demonetization. The assessee's appeal before the CIT(A) was dismissed for non-prosecution due to notices being sent to an incorrect email address.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal for non-prosecution without adjudicating on merits and whether the notices were properly served on the assessee.

Which sections of the Income-tax Act were involved?

Section 69A,Section 144,Section 250(6),Section 133(6),Section 142(1),Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘SM’ Bench, Hyderabad

Before: Shri Manjunatha G. & Shri Ravish Sood

Hearing: 13/05/2026

आयकर अपीलीय अिधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SM’ Bench, Hyderabad Before Shri Manjunatha G., Accountant Member and Shri Ravish Sood, Judicial Member आ.अपी.सं /ITA No.343/Hyd/2026 (िनधा�रण वष�/Assessment Year: 2017-18) Nayeem Mohammad, Vs. Income Tax Officer, Mahabubnagar. Ward-1, PAN: CQIPM7868L Mahabubnagar. (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri S K Gupta, Advocate राज� व �ारा/Revenue by: Shri T Sunil Gowtham, Sr. AR (Hybrid mode) सुनवाई की तारीख/Date of Hearing: 13/05/2026 घोषणा की तारीख/Date of 20/05/2026 Pronouncement: आदेश / ORDER PER. RAVISH SOOD, J.M: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 06/11/2024, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under section 144 of the Income Tax Act, 1961 (for short, “the Act”), dated 23/10/2019 for

2 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO the Assessment Year (AY) 2017-18. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:

“1. In the facts and circumstances of the case, the order of the CIT(A) is not sustainable on facts or in law. 2. In the facts and circumstances of the case, the Ld. CIT(A) erred in law and on facts in dismissing the appeal for non-prosecution, without adjudicating the issues judiciously, which is contrary to the provisions of section 250(6) of the Act. 3. In the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition of Rs. 27,00,000/- under section 69A, without appreciating that mere bank deposits cannot be treated as unexplained money without examining the nature and source thereof. 4. In the facts and circumstances of the case, the Ld. CIT(A) erred in relying solely on non-response and not on merits of the case, ignoring the settled law that appellate proceedings cannot be dismissed summarily for non- prosecution. 5. In the facts and circumstances of the case, the addition sustained is excessive, arbitrary and unsupported by any independent enquiry or material evidence, and therefore liable to be deleted. 6. The appellant may be permitted to add, delete, amend any ground with leave of the Honourable Tribunal.”

2.

Succinctly stated, the AO observing that the assessee during the subject year, during demonetization period, had made cash deposits in his bank account held with M/s. Mahabubnagar District Cooperative Central Bank Ltd, Shadnagar Branch, Mahabubnagar District, but had not filed his return of income for the year under consideration, issued notice under section 142(1)

3 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO of the Act, dated 15/02/2018 calling upon him to file his return of income.

3.

Ostensibly, as the assessee had failed to furnish his return of income in compliance to the notice issued under section 142(1) of the Act, dated 15/02/2018, the AO issued a notice under section 144 of the Act, wherein the assessee was called upon to furnish the requisite details failing which the assessment would be framed to the best of his judgment.

4.

The AO, in absence of any compliance from the assessee procured the copy of his bank account No.141722010089415 with Mahabubnagar District Cooperative Central Bank Ltd, Shadnagar Brnach, Mahabubnagar District under section 133(6) of the Act. The AO observed that the assessee had during the subject year deposited an amount of Rs.28,92,485/- in his aforesaid bank account, which comprised of cash deposits of Rs.20 lakhs made by him during the demonetisation period.

5.

As is discernible from the assessment order, the assessee in the meantime had belatedly filed his return of income on 19/08/2019, declaring an income of Rs.3,25,124/-. However, the AO held the return of income filed by the assessee as non-est for

4 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO all legal purposes and considered the same only for the limited purpose for completing the assessment.

6.

The AO observed that the assessee during the subject year had made cash deposits of Rs.20 lakhs on 10/11/2016 and LOD of Rs.7 lakhs on 09/12/2016 in his above mentioned bank account No. 141722010089415 with Mahabubnagar District Cooperative Central Bank Ltd, Shadnagar Brnach, Mahabubnagar District. As the assessee had failed to come forth with any explanation regarding the nature and source of the amount of Rs.27 lakhs, which was deposited during the demonetization period, i.e., 09/11/2016 to 30/12/2016, the AO held the entire amount of Rs.27 lakhs as having been sourced out of the assessee’s unexplained money under section 69A of the Act. Accordingly, the AO vide his order passed under section 144 of the Act, dated 23/10/2019 determined the income of the assessee at Rs.30,25,124/-.

7.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee despite having been put to notice on four occasions, i.e., 11/02/2021, 26/03/2021, 05/10/2024 and 28/10/2024, failed to participate in the appellate proceedings,

5 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO the CIT(A) proceeded with to dispose of the appeal on an ex-parte basis qua the merits of the case.

8.

The CIT(A) in absence of any explanation regarding the source of the deposits of Rs.27 lakhs made by the assessee in his bank account during the demonetization period, found no infirmity in the view taken by the AO and upheld the addition of Rs.27 lakhs made by him under section 69A of the Act.

9.

The assessee, aggrieved with the order of the CIT(A) has carried the matter in appeal before us.

10.

Shri S.K. Gupta, Advocate, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the same involved a delay of 368 days. Elaborating on the reasons leading to the delay, the Ld. AR submitted that the same had crept in for the reason that the assessee was neither validly put to notice about the hearing of the appeal, nor the order passed by the CIT(A) dismissing the appeal was served upon him. Elaborating on his contention, the Ld. AR submitted that the assessee had filed his return of income for AY 2017-18 on 19/08/2019, declaring an income of Rs.3,07,620/-. It was submitted that the

6 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO assessment in the case of the assessee was framed vide an ex- parte order under section 144 of the Act, dated 23/10/2019, wherein a demand of Rs.33,07,659/- was raised. Elaborating further on his contention, the Ld. AR submitted that the assessee had thereafter with the help of an Income Tax Practitioner (ITP) filed an appeal on 21/11/2019, i.e., within the prescribed time with the CIT(A). It was submitted that as the assessee was not at all conversant with the working of the ITBA portal, thus, he had remained unaware of the notices issued by the CIT(A) and also the ex-parte order passed by him on 06/11/2024, wherein the additions made by the AO were confirmed.

11.

The Ld. AR to buttress his contention had drawn our attention to the affidavit filed by the assessee, dated 24/03/2026 seeking condonation of the delay of 368 days (wrongly mentioned as 393 days) involved in filing the present appeal before us.

12.

Carrying his contention further, the Ld. AR submitted that the assessee had failed to participate in the proceedings before the CIT(A) for the reason that the notices intimating the fixation of the appeal, ie., on 11/02/2021 and 26/03/2021 (out of four notices) issued were forwarded/dropped in the email address, viz., “SRINIVASK1589@GMAIL.COM”, while for the assessee had

7 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO specifically in the Memorandum of Appeal, i.e., Form-35 provided the email address for notices/communications as “quader.co@gmail.com”. Apart from that, the Ld. AR submitted that though the assessee appellant in Column No.17 of Form-35 had provided the email address at which notices maybe sent to him, i.e., “mdnayeemsher@gmail.com”, but neither of the notices were forwarded/dropped in the said email address and were rather forwarded to an unknown email address, viz., “SRINIVASK1589@GMAIL.COM”. Elaborating further on his contention, the Ld. AR submitted that as the assessee for no fault on his part had remained divested of a sufficient opportunity of participating in the proceedings before the CIT(A), as well as had not been validly served with the order passed by the CIT(A) dismissing his appeal vide order dated 06/11/2024, and had gathered about the same only when the tax authorities of the Income Tax Department, Mahabubnagar had contacted him for payment tax, therefore, the impugned delay involved in filing of the appeal in all fairness and in the interest of justice be condoned.

13.

Per contra, Shri T Sunil Gowtham, Learned Senior Departmental Representative (for short, “Ld. Sr-DR”) relied upon

8 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO the orders of the authorities below. The Ld. Sr-DR submitted that the assessee had not raised specific ground regarding not having been put to notice about the fixation of the appeal as well as service of the CIT(A) order in his grounds of appeal raised before the Tribunal.

14.

We have given thoughtful consideration to the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the orders of the lower authorities and the material available on record.

15.

Admittedly, it is a matter of fact borne from the record that the assessee who had earlier suffered an ex-parte order under section 144 of the Act, dated 23/10/2019, had though filed the appeal before the CIT(A) within the prescribed time limit, but the same was dismissed by the said first appellate authority for non- prosecution after summarily approving the view taken by the AO. We have perused the record and find substance in the Ld. AR’s contention that though the assessee in Form-35 at Column No.17 had specifically provided his email address, viz., “mdnayeemsher@gmail.com” for forwarding the notices by the CIT(A) office, but a perusal of two notices, dated 11/02/2021 and 26/03/2021 (out of four notices) issued by the CIT(A) reveals that

9 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO the same were forwarded/dropped in the email address, viz., “SRINIVASK1589@GMAIL.COM”. Apart from that, we find that there is neither any material available on record nor brought to our notice which would reveal that there was service of any notice intimating fixation of the appeal as well as the order passed by the CIT(A), dated 06/11/2024 at the address provided by the assessee in Column No.17 of Form35. Also, there is nothing discernible from the record which would reveal that the CIT(A) office had scrupulously followed the procedure for service of notices/CIT(A) order as per the manner contemplated under section 282 read with Rule 127 of the Income Tax Rules, 1962.

16.

Considering the totality of the facts involved in the present case before us, we find substance in the Ld. AR’s contention that as the assessee had not been validly served with the copy of the order passed by the CIT(A), dated 06/11/2024, and had gathered about the same only when the Income Tax Department, Mahabubnagar had proceeded with the recovery proceedings, the impugned delay of 368 days involved in filing of the present appeal cannot be attributed to any fault on the part of the assessee and merits to be condoned.

10 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO 17. Coming to the merits of the case, we are of firm conviction that as the assessee had not been validly put to notice about the fixation of the appeal by the CIT(A), therefore, dismissal of the appeal vide an ex-parte order had clearly divested him of a sufficient opportunity of being heard and prosecuting the appeal before the said appellate authority. We thus, in terms of our aforesaid deliberations, in all fairness and in the interest of justice set aside the matter to the file of the CIT(A) with a direction to readjudicate the appeal after validly putting the assessee to notice. Needless to say, the CIT(A) shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee.

18.

Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations.

Order pronounced in the open court on 20th May, 2026.

Sd/- Sd/- (MANJUNATHA G.) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated 20th May, 2026. OKK / SPS

11 ITA No.343/Hyd/2026 Nayeem Mohammad vs. ITO

Copy to: S.No Addresses 1 Nayeem Mohammad 1 28, Mekaguda, Kothur, Mahabubnagar, Mahbubnagar Telangana-509228 2 ITO, Ward 1, Ravindranagar, Padmavathi Colony, Mahbubnagar, Mahbubnagar, Telangana-509001 3 The Pr.CIT, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order Digitally signed by KAMALA KAMALA KUMAR KUMAR ORUGANTI ORUGANTI Date: 2026.05.21 14:10:46 +05'30' Sr. Private Secretary, ITAT, Hyderabad.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →