SYDAKHATOON MAHAMMAD,KARIMNAGAR vs. ITO., WARD-2, KARIMNAGAR

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad �ी �वजय पाल राव, उपा� य� एवं �ी मधुसूदन साव�डया, लेखा सद� य के सम� । Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA Nos. 1182 & 2169/Hyd/2025 (िनधा�रण वष�/Assessment Year: 2017-18) Shri Sydakhatoon Vs. Income Tax Officer Mahammad Ward – 2 Karimnagar Karimnagar PAN: BCYPM6499N (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: CA Srinivas Vaddi राज� व �ारा/Revenue by:: Shri Alluru Venkata Rao, Sr. AR सुनवाई की तारीख/Date of hearing: 11/05/2026 घोषणा की तारीख/Pronouncement: 13/05/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

These two appeals are filed by Shri Sydakhatoon Mahammad (“the assessee”), feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) both dated 02.05.2025 for the A.Y.2017-18. Since both the appeals are filed by the same assessee, for the sake of convenience, these two appeals were heard together and are being disposed of by this common consolidated order.

2 ITA No.1182/Hyd/2025: 2. The assessee has raised the following grounds of appeal:

5 3. The brief facts of the case are that the assessee is an individual who filed her return of income for Assessment Year 2017-18 on 28.07.2017 declaring total income of Rs.3,07,500/-. The case of the assessee was selected for limited scrutiny through CASS and accordingly, notice under section 143(2) of the Income Tax Act, 1961 (“the Act”) was issued by Learned Assessing Officer (“Ld. AO”) to the assessee. During the course of assessment proceedings, the Ld. AO observed that the assessee had deposited cash of Rs.33,10,000/- in her bank account during the year under consideration. The Ld. AO called upon the assessee to explain the source of the said cash deposits. However, the Ld. AO was not convinced with the explanation furnished by the assessee and treated the entire cash deposits of Rs.33,10,000/- as unexplained money under section 69A of the Act and added the same to the income of the assessee. Accordingly, the assessment under section 143(3) of the Act was completed by the Ld. AO vide order dated 10.12.2019 determining the total income of the assessee at Rs.36,17,500/-. 4. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A), not being convinced with the submissions of the assessee, confirmed the addition made by the Ld. AO. 5. Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us. Before us, the Learned Authorized Representative (“Ld. AR”) submitted that the cash deposits of Rs.33,10,000/- in the bank account of the assessee were related to brick manufacturing business, which is substantiated by corresponding payments made towards brick labour through bank accounts. The Ld. AR further submitted

6 that due to non-availability of proper supporting evidence at the relevant point of time, the assessee could not substantiate her claim before the lower authorities. It was submitted that the assessee is now in a position to substantiate her claim with supporting documentary evidence and therefore requested that one more opportunity may be granted to the assessee to substantiate her claim before the Ld. AO by filing all necessary documentary evidence. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the orders of the lower authorities and submitted that sufficient opportunity had already been provided by both the lower authorities. However, despite such opportunities, the assessee failed to furnish necessary evidence in support of her claim. Therefore, the Ld. DR objected to the remand of the issue to the file of the Ld. AO. 7. We have heard the rival submissions and perused the material available on record. We find that the addition of Rs.33,10,000/- has been made by the Ld. AO under section 69A of the Act on account of cash deposits in the bank account of the assessee. Before us, the assessee has contended that the said cash deposits were out of brick manufacturing business receipts and further submitted that corresponding payments towards labour charges were also made through bank accounts. We find force in the contention of the assessee that if the assessee is in a position to substantiate the claim with supporting documentary evidence, the same requires proper verification at the end of the Ld. AO. Considering the facts and circumstances of the case and in the interest of substantial justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) on this issue and restore the matter to the file

7 of the Ld. AO for fresh adjudication. The assessee shall be at liberty to file all additional evidences and documentary material in support of her claim before the Ld. AO. The Ld. AO shall examine the same and decide the issue afresh in accordance with law after providing adequate opportunity of being heard to the assessee. The assessee is also directed not to seek any unnecessary adjournment during the remand proceedings and to cooperate for expeditious disposal of the matter. 8. In the result, the appeal of the assessee in ITA No. 1182/Hyd/2025 is allowed for statistical purposes. ITA NO. 2169/HYD/2025 : 9. The assessee has raised the following grounds of appeal:

10 account of cash deposits made by the assessee during the year under consideration. Subsequently, after passing of the assessment order, the Ld. AO observed that there were further cash deposits of Rs.13 lakhs in the bank account of the assessee, which according to the Ld. AO were made by other persons and had not been considered while framing the original assessment under section 143(3) of the Act. Accordingly, the Ld. AO passed rectification order under section 154 r.w.s. 143(3) of the Act dated 29.07.2021 and made further addition of Rs.13 lakhs under section 69A of the Act in the hands of the assessee. 11. Aggrieved by the rectification order passed by the Ld. AO, the assessee preferred appeal before the Ld. CIT(A). However, the Ld. CIT(A), not being convinced with the submissions of the assessee, confirmed the action of the Ld. AO and dismissed the appeal of the assessee. 12. Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before us. Under ground no.2, the assessee has challenged the validity of the rectification order passed under section 154 of the Act. Relying upon the decision of the Hon’ble Supreme Court in the case of T.S. Balaram Vs. Volkart Brothers reported in 82 ITR 50, the Ld. AR submitted that only mistakes apparent from record, which are obvious, patent and self-evident can be rectified under section 154 of the Act. The Ld. AR further submitted that where determination of an issue requires long drawn reasoning, interpretation of law or where two views are possible, the same cannot be treated as mistake apparent from record for the purpose of section 154 of the Act. Therefore, according to the Ld. AR, the rectification order passed by the Ld. AO by making

11 fresh addition of Rs.13 lakhs under section 69A of the Act is beyond the scope of section 154 of the Act and liable to be quashed. 13. Per contra, the Ld. DR relied upon the orders of the lower authorities and submitted that the Ld. AO has rightly rectified the mistake apparent from record. 14. We have heard the rival submissions and perused the material available on record including the case laws relied upon. We have also gone through the rectification order passed by the Ld. AO under section 154 of the Act, which is to the following effect:

13 under section 154 of the Act. We therefore hold that the Ld. AO exceeded the jurisdiction vested under section 154 of the Act by making fresh addition of Rs.13 lakhs under section 69A of the Act through rectification proceedings. Accordingly, the rectification order passed by the Ld. AO under section 154 of the Act is set aside and ground no.2 raised by the assessee is allowed. 16. As we have allowed the appeal of the assessee on the legal issue challenging the validity of rectification proceedings under section 154 of the Act, we refrain from adjudicating the grounds raised on merits, which are kept open. 17. In the result, the appeal of the assessee in ITA No. 2169/Hyd/2025 is allowed. 18. To sum up, the appeal of the assessee in ITA No.1182/Hyd/2025 is allowed for statistical purposes and the appeal in ITA No.2169/Hyd/2025 is allowed. Order pronounced in the Open Court on 13th May, 2026. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, dated 13th May, 2026. Vinodan/sps Copy to: S.No Addresses 1 Shri SYDAKHATOON MAHAMMAD 2-50/5 KALWACHERLA, KALWACHERLA RAMAGIRI PEDDAPALLI 505212,Telangana 2 Income Tax Officer Ward-2 Karimnagar 505001 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.05.13 RAO 13:58:28 +05'30'