BHAGYA LAKSHMI VALLALA, KHAMMAM vs. ITO, WARD - 11(1), HYDERABAD

आदेश / O R D E R PER MANJUNATHA.G, AM:

This appeal filed by the assessee is directed against the order of the

Commissioner of Income Tax (Appeals), National Faceless Appeal Centre

(NFAC), Delhi, dated 23.12.2025, and pertains to assessment year 2020-

21.

not filed her return of income (RoI) for AY 2020-21 on or before due date

provided u/s.139(1) of the Income Tax Act, 1961 (in short “the Act“).

:: 2 :: The assessement has been subsequently reopened u/s.147 of the Act as

per the specific information was flagged as per the Risk Management

Strategy formulated by the CBDT through ITBA Software under the head

“RMS” and accordingly, notice u/s.148A(b) of the Act dated 30.01.2024

was issued and served on the assessee. The assessee filed submissions

in response to notice, and the AO has passed order u/s.148A(d) of the Act

on 28.03.2024 and issued notice u/s.148 of the Act on 30.03.2024. In

response, the assessee filed her RoI on 02.05.2024 and declared total

income of Rs.2,62,810/-. The case was selected for scrutiny and during

the course of assessement proceedings, the AO noticed that the assessee

has made cash deposits of Rs.42,27,800/- into ICICI Bank savings a/c

No. 068501505372 and therefore, called upon the assessee to explain the

source for cash deposits. The AO issued notice u/s.143(3) & 142(1) of

the Act on various dates but no response, the assessee neither furnished

any details except filing RoI in response to notice u/s.148 of the Act. The

AO after considering RoI filed by the assessee observed that, the

assessee has shown business turnover of Rs.42,27,600/- and declared

8% profit u/s.44AD of the Act, however, failed to furnish any evidence to

prove the nature of business and receipts from business. Therefore,

rejected the explanation of the assessee and made addition of

Rs.42,27,600/- u/s.69A of the Act as unexplained money and brought to

tax u/s.115BBE of the Act.

:: 3 :: 3. Aggrieved by the assessement order, the assessee preferred an

appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee neither

appeared nor filed any submission which is evident from Para No.4(4) of

the Ld.CIT(A)’s order, where the Ld.CIT(A) had issued notices on various

dates but no response from the assessee. Therefore, the Ld.CIT(A)

dismissed the appeal filed by the assessee for non-prosecution and upheld

the additions made by the AO towards cash deposits u/s.69A of the Act.

appeal before this Tribunal.

that the Ld.CIT(A) erred in sustaining the additions made by the AO

towards cash deposits of Rs.42,27,600/- u/s.69A of the Act, even though,

the assessee has explained the cash deposits out of business receipts by

filing relevant details including license obtained from Registrar & Stamps

for registered stamp vendors and also other business activity conducted

in the name of Sri Sai Lakshmi Consultancy. The Ld. Counsel for the

assessee further referring to RoI filed by the assessee for AYs 2021-22 to

2023-24 submitted that the assessee has filed RoI for all three

assessement years before the AO, issued notice u/s.148 of the Act and

declared business turnover and estimated 8% of profit in terms of Section

44AD of the Act. For the assessement year under consideration, the

assessee couldn’t file RoI due to misunderstanding that her income is :: 4 :: below taxable limit and she need not file any RoI. However, when notice

u/s.148 of the Act was issued, she had filed her RoI on 02.05.2024 and

declared business turnover of Rs.42,27,600/- and estimated 8% of profit

u/s.44AD of the Act. The assessee had filed all evidences before the AO

and the Ld.CIT(A), however, the Ld.CIT(A) ignored the evidences filed by

the assessee and dismissed the appeal for non-prosecution and upheld

the additions made by the AO. Therefore, he submitted that the additions

made by the AO should be deleted or in the alternative, the matter may

be remitted back to the file of the AO to give one more opportunity to the

assessee to explain her case.

assessee is a non-filer, and the case was reopened to verify various

financial transactions including cash deposits into bank account. The

assessee couldn’t explain the source for cash deposits. Although, the

assessee claims to have explained the source out of business receipts, but

the assessee couldn’t file any evidences to prove the nature of business

and turnover achieved from the business. In the absence of any details,

the AO has rightly made addition to cash deposits as unexplained and the

Ld.CIT(A) rightly upheld the additions made by the AO. Therefore, the

additions made by the AO should be upheld.

record and had gone through orders of the authorities below. Admittedly, :: 5 :: the assessement proceedings before the AO are ex parte which is evident

from relevant assessement order passed by the AO, where the AO has

passed best judgment assessement in terms of Section 144 of the Act on

the basis of RoI filed by the assessee in response to notice issued u/s.148

of the Act in the absence of any further evidences to explain the source

for cash deposits. Further, before the Ld.CIT(A), the assessee neither

appeared nor filed any submissions to explain the source for cash

deposits. Although, the assessee claims to have explained source for

cash deposits out of business receipts in light of her business activity of

Registration & Stamps vendor & stationery seller and also ITR filed for the

earlier assessement years i.e. AYs 2021-22 to 2023-24 which are filed

much before the date of reopening of assessement, but on the basis of

RoI filed by the assessee, and license obtained from the Stamps &

Registration Department and photographs of the shop, it is difficult to

ascertain as to what is the nature of business carried out by the assessee

and turnover earned from the business. Further, the assessee needs to

explain the cash deposits into bank account with relevant evidences

including business turnover by filing details. However, in the present

case, before the AO, no such details has been filed by the assessee. Even

before the Ld.CIT(A), the assessee has not appeared and explained the

case by filing any details. Therefore, in our considered view, going by the

explanation offered by the assessee and RoI filed in response to notice

issued u/s.148 of the Act on 02.05.2024 and also RoI filed for AYs 2021- :: 6 :: 22 to 2023-24, it appears that the assessee has declared income from

business activity and estimating profit u/s.44AD of the Act. But, fact

remains that, this explanation including evidences were not filed before

the AO and the Ld.CIT(A). Since the assessee has filed the evidences to

prove carrying out business of Registration & Stamps vendor for the first

time before the Tribunal, in our considered view, the issue needs to be set

aside to the file of the AO. Thus, we set aside the order of the Ld.CIT(A)

and restore the issue back to the file of the AO. The AO is directed to re-

consider the issue ‘de novo’ after providing reasonable opportunity of

hearing to explain its case in light of any evidence that may be filed by

the assessee to justify her case to explain source for cash deposits into

bank account.

purposes.

Order pronounced on the 12th day of June, 2026, in Hyderabad.

Sd/- Sd/- (िवजय पाल राव) (मंजूनाथा. जी) (VIJAY PAL RAO) (MANJUNATHA.G) उपा�� /VICE-PRESIDENT लेखा सद�/ACCOUNTANT MEMBER

Hyderabad, dated 12.06.2026. TLN

आदेशकी �ितिलिप अ�ेिषत/ Copy of the order forwarded to:

िनधा�रती/The 1 : Smt. Bhagya Lakshmi Vallala, 22-1-153/A, Dammapet Centre, Palvancha, Assessee Khammam-507 115. राज�/ The Revenue 2 : The ITO, Ward-11(1), Hyderabad.

The Principal Commissioner of Income Tax, Hyderabad. 3 िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, हैदराबाद / DR, ITAT Hyderabad. 4 गाड�फ़ाईल / Guard file 5

आदेशानुसार / BY ORDER

TUMMALACHARLA Digitally signed by TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.06.12 11:44:42 +05'30'

Sr. Private Secretary ITAT, Hyderabad