BUSIREDDY MALLIKARJUNA REDDY,ANDHRA PRADESH vs. ITO, WARD- 4(2), HYDERABAD

आयकर अपीलीय अिधकरण, हैदराबाद पीठ�, हैदराबाद INCOME TAX APPELLATE TRIBUNAL, HYDERABAD SMC-BENCH, HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT ITA 195/HYD/2026 िनधा�रण वष�/Assessment Year 2017-2018) BUSIREDDY ITO, WARD- 4(2) MALLIKARJUNA REDDY IT TOWER, 7/19, DOWLATHAPURAM, AC GUARDS, MASAB KADAPA-516003, TANK Vs. ANDHRA PRADESH HYDERABAD-500004, TELANGANA अपीलाथ� Appellant ��थ� Respondent Permanent Account Number AJXPR3078D of Assessee: अपीलाथ� �ारा/Appellant represented by: Adv B Suchiri ��थ� �ारा/Respondent represented by: SR-AR B Laxmi Kanth

सुनवाई की तारीख / Date of conclusion of hearing: 30.07.2026 घोषणा की तारीख / Date of pronouncement: 25.08.2026

2 ITA.No.195/Hyd./2026 आदेश / ORDER

This appeal by the assessee is directed against the other dated 30.05.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the assessment year 2017-2018.

3 ITA.No.195/Hyd./2026 notice issued by the learned CIT(A) and also could not notice the impugned order passed by the learned CIT(A). Only when the assessee received the penalty order passed under section 271AAC1 of the Act dated 12.01.2026, the assessee realized that an order was passed by the learned CIT(A) and filed the present appeal after delay of 545 days. The learned Authorised Representative of the Assessee has thus submitted that the delay in filing the appeal may be condoned and appeal of the assessee be admitted for adjudication. He has also referred to the death certificate of the brother, father and mother of the assessee and submitted that a lenient view may be taken for condoning the delay.

4 ITA.No.195/Hyd./2026 4. I have considered the rival submissions and perused the contents of the petition for condonation of delay. The assessee has explained the cause of delay of 545 days in filing the present appeal that there were tragic events in the family when the brother, father and mother of the assessee expired on regular intervals from the year 2021 to 2023 and assessee was under a severe and continuous emotional trauma and depression and was also absent from the routine work. By considering these facts of the demise of the family members of the assessee and taking a lenient view, the delay of 545 days in filing the appeal before the Tribunal is condoned subject to cost of Rs.5,000/- [Rs. Five Thousand Only] to be paid to ITAT Tax Bar Association, Hyderabad within a period of one months from the date of this order. Accordingly, the appeal of the assessee is admitted for hearing and adjudication on merits.

5 ITA.No.195/Hyd./2026

“The order of the Learned CIT(A) u/s 250 of the Income-tax 1) Act, 1961 is contrary to law, facts and evidence on record and is liable to be set aside. 2) The Learned CIT(A) failed to appreciate that the documentary evidence and explanations furnished by the Appellant remained uncontroverted and unrebutted by the Revenue, and that no addition can be sustained merely on suspicion, conjecture, OR surmises. 3) The Learned CIT(A) erred in not appreciating that once the Appellant discharged the initial burden by furnishing explanations supported by affidavits, the onus shifted to the AO to verify OR rebut the same. The failure of the Department to conduct any verification vitiates the impugned order, which has been passed on insufficient and incomplete material despite the Appellant having duly discharged the initial onus. 4) The Learned CIT(A) erred in sustaining the addition of Rs.14,76,800 under section 69A of the Act by treating cash deposits towards credit card repayments as unexplained money, without establishing ownership of such funds in the hands of the Appellant. Section 69A can be invoked only when the money is proved to belong to the assessee, whereas in the present case the deposits represented reimbursements received from relatives and friends for usage of the Appellant credit cards and did not constitute the Appellant income. 5) The Learned CIT(A) failed to consider the affidavits filed on 07.05.2024, given by the Guda Raja Sekhar Reddy, Gajjala Venkata Subba Reddy, which clearly explained the nature

6 ITA.No.195/Hyd./2026 and source of the impugned deposits as reimbursements for tractor maintenance and diesel expenses incurred using the Appellant credit cards. The explanations were summarily rejected without examination, and the appellate order was passed in a vague and cryptic manner by merely reiterating the findings of the Assessing Officer, thereby violating the principles of natural justice and rendering the order arbitrary and unsustainable. 6) The Appellant/Assessee prays to alter/amend/add any Additional grounds of appeal before it is disposed of. Any other grounds may be urged at the time of hearing.” 7)

7 ITA.No.195/Hyd./2026 used by the friends and the relatives of the assessee for maintaining their tractors and the assessee has received cash from these relatives and friends. Thus, the learned Authorised Representative of the Assessee has submitted that the cash deposit in the bank account represented reimbursement of the amount by the relatives and friends for settlement of the credit card liabilities and thus the assessee explained the source of the cash deposit in the bank account. Before the learned CIT(A), the assessee filed the affidavits from the persons who used the credit card of the assessee confirming that the cash deposit was reimbursement towards such use of credit card. The learned CIT(A) called for a remand report from the Assessing Officer for verification of the assessee’s explanation. However, despite the statutory direction, the Assessing Officer failed to submit the remand report or carry out the verification. Thus, the learned Authorised Representative of the Assessee has submitted that without conducting a proper enquiry the learned CIT(A) has confirmed the addition made by the Assessing Officer.

8 ITA.No.195/Hyd./2026 7. On the other hand, the learned DR relied upon the orders of the authorities below and submitted that this is an afterthought story cooked-up by the assessee to explain the cash deposit in the bank account when the relatives and friends have used the credit card of the assessee they could have made the payment themselves instead of giving the cash to the assessee.

9 ITA.No.195/Hyd./2026 appellate proceedings. The learned Authorised Representative of the Assessee has specifically pointed out that when the assessee filed the affidavits from the persons who used the assessee’s credit card and reimbursed the amount which is deposited in the bank account, the learned CIT(A) called for a remand report. This fact of affidavit filed by the assessee is acknowledged by the learned CIT(A) in the order. However, the same was rejected on the ground that the parties were using the credit card of the assessee without their bank account of their own and this seems to be based on fallacious argument. Nowhere the learned CIT(A) has referred to the remand report called from the Assessing Officer and non-submission of the remand report by the Assessing Officer. Accordingly, in the facts and circumstances of the case, when the assessee filed the affidavits of the persons and the learned CIT(A) has called for a remand report then, these persons ought to have been examined or at least the affidavits filed by the assessee ought to have been verified and examined. Hence, in the facts and circumstances of the case and in the interest of justice, I am

10 ITA.No.195/Hyd./2026 of the considered view that this matter requires proper verification and examination of fats as well as the record and particularly the affidavits and examination of the concerned persons at the level of Assessing Officer. Accordingly, the order of the learned CIT(A) is set-aside, and the matter is remanded to the record of the Assessing Officer for fresh adjudication after verification and examination by giving an appropriate opportunity of hearing to the assessee.

Order pronounced in the open Court on 25.08.2026

Sd/- VIJAY PAL RAO VICE PRESIDENT Hyderabad, Dated 25th day of August, 2026 VBP

11 ITA.No.195/Hyd./2026 Copy to: BUSIREDDY MALLIKARJUNA REDDY, 1 7/19, DOWLATHAPURAM, KADAPA-516003, ANDHRA PRADESH 2 ITO, WARD- 4(2), IT TOWER, AC GUARDS, MASAB TANK, HYDERABAD-500004, TELANGANA 3 THE PR. CIT, KURNOOL 4 THE D.R., ITAT, HYDERABAD SMC-BENCH, HYDERABAD. 5 GUARD FILE VADREV Digitally signed TRUE COPY by VADREVU U PRASADA RAO PRASAD Date: ASSISTANT REGISTRAR / 2026.08.25 I.T.A.T., HYDERABAD A RAO 12:29:42 +05'30'