KADUR RAMANNA RAVI KUMAR,CHIKKAMAGALUR vs. WARD 1, CHIKMAGALUR, CHIKAMANGALORE

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ITA 498/BANG/2026Status: DisposedITAT Bangalore19 May 2026AY 2016-176 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, considering the assessee's willingness to furnish evidence and the interest of substantial justice, set aside the lower authorities' orders and restored the issue to the AO for fresh adjudication. This was subject to the assessee depositing Rs. 11,000/- to the Prime Minister National Relief Fund.

What were the facts?

The assessee made a cash deposit of Rs. 1,11,13,300/- but did not file a return of income. The Assessing Officer (AO) treated the entire deposit as income and made an addition under Section 144. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the AO was justified in treating the unexplained cash deposit as income without considering the assessee's claim of purchases and whether the assessee should be granted another opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1),Section 144,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, BANGALORE

Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K

For Appellant: Shri Deepak Gunashekar, AR
For Respondent: Shri N Balusamy, JCIT (DR)
Hearing: 07.05.2026Pronounced: 19.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K, JUDICIAL MEMBER

ITA No.498/Bang/2026 Assessment Year: 2016-17

Kadur Ramanna Ravi Kumar, The Income Tax Officer, Vs. K Hosahalli Emme Doddamma Temple Ward – 1, Road, AK Colony Kadur & Kadur Taluk Chikmagalur. Chikkmagalur – 577 548. PAN – AYPPR 6683 M APPELLANT RESPONDENT Assessee by : Shri Deepak Gunashekar, AR Revenue by : Shri N Balusamy, JCIT (DR) Date of hearing : 07.05.2026 Date of Pronouncement : 19.05.2026 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:

This is an appeal filed at the instance of the assessee is directed against the order of the learned Commissioner of Income Tax- Appeal (hereafter ld. CIT(A)), under section 250 of the Income Tax Act, 1961 (hereafter- the Act) vide order dated 09-12-2025 for the Assessment Year 2016-17.

2.

The grounds of appeal raised by the assessee are interconnected and pertain to the addition made on account of cash deposit. Hence, all the grounds of appeal are clubbed and adjudicated hereunder combinedly.

ITA No.498/Bang/2026 Page 2 of 6

3.

The facts in brief are that the assessee during the year has made cash deposit in saving bank account for a sum of Rs. 1,11,13,300/- only. But the assessee has not filed any return of income. Therefore, notice u/s 148 of the Act was issued as 26th March 2021 requiring the assessee to file return of income. Thereafter several notices under section 142(1) of the Act were issued. However, the assessee failed to file return of income and make reply to the notices issued. Hence, the AO proceeded to complete the assessment under section 144 of the Act by treating the cash deposit of Rs. 1,11,13,300/- as income of the assessee.

4.

The aggrieved assessee preferred to file appeal before the Ld. CIT(A) but the same was delayed by 333 days. However, the Ld. CIT(A) condoned the delay.

5.

In the statement of facts filed along with appeal memo, the assessee submitted that he was engaged in the business namely Chalukya Bar & Restaurant during the relevant year which was closed w.e.f. 3 December 2016. The assessee further claimed that during the year, his income was below taxable limit, therefore the return of income was not filed.

5.1 Furthermore, the assessee in the grounds of appeal raised, contended that the AO has not considered the purchased made which is evident from TCS reported in form 26AS. However, the learned CIT(A) dismissed the ground of appeal raised by the assessee. The learned CIT(A) found that the assessee has not provided how his income was below taxable limit. The assessee was engaged in the business during the relevant period and business got closed in subsequent year in consequent

ITA No.498/Bang/2026 Page 3 of 6

to District Collector order. But the assessee has not filed books of account, vat return etc to support its contention despite several opportunities of being heard given. The learned CIT(A) also noted that the dispute is with respect to sources and nature of cash deposit. Therefore, assessee’s ground that purchases as evident from TCS report in Form 26AS was not considered by the AO while making addition of cash, is not valid. As such the provision of section 69A i.e. unexplained money is attracted in the given facts and circumstances. As the assessee has not provided books of account showing such money is recorded in the books and failed to explain the nature and sources.

6.

Being aggrieved by the order of the Ld. CIT(A), the assessee is appeal before us.

7.

The learned AR before us submitted that the assessee could not properly represent his case before the lower authorities due to various personal and health difficulties. It was submitted that though certain explanations were available with the assessee in support of the cash deposits made in the bank account, the same could not be placed before the AO during the assessment proceedings nor before the learned CIT(A). The learned AR further submitted that the assessee is now willing to furnish all the relevant details, books of account, bank statements and supporting evidence to substantiate the nature and source of the cash deposits. Therefore, it was prayed that one more opportunity may be granted in the interest of justice.

8.

Per contra, the learned DR strongly relied upon the orders of the lower authorities and submitted that the assessee remained consistently

ITA No.498/Bang/2026 Page 4 of 6

non-compliant both before the AO as well as before the learned CIT(A). Despite several statutory notices and opportunities, the assessee neither filed return of income nor furnished supporting evidence. The learned DR further submitted that the learned CIT(A) has passed a detailed and speaking order on merits after considering the materials available on record and therefore no interference is called for.

9.

We have heard the rival submissions of both the parties and carefully perused the materials available on record. We note that admittedly the assessee remained consistently non-compliant before the AO during the assessment proceedings as well as before the learned CIT(A) during the appellate proceedings. The AO was therefore constrained to complete the assessment u/s 144 of the Act. We further note that even before the learned CIT(A), despite opportunities being granted, the assessee failed to furnish books of account, VAT returns or any other supporting evidence in support of his claim regarding the nature and source of cash deposits. The learned CIT(A), after considering the materials available on record, has passed a detailed and speaking order on merits sustaining the addition.

9.1 However, at the same time, considering the submissions now made before us that the assessee is willing to furnish all relevant evidence and considering that the issue relates to determination of correct taxable income, we are of the considered opinion that one more opportunity deserves to be granted to the assessee in the interest of justice and to avoid undue hardship to the assessee. It is a settled principle that substantial justice should prevail over technical considerations, though such indulgence cannot be granted unconditionally in view of the repeated

ITA No.498/Bang/2026 Page 5 of 6

non-compliance by the assessee before the lower authorities. Accordingly, in the peculiar facts and circumstances of the present case, we deem it fit and proper to set aside the orders of the lower authorities and restore the entire issue to the file of the AO for fresh adjudication, subject to the condition that the assessee shall deposit a sum of Rs. 11,000/- to the Prime Minister National Relief Fund within a period of 30 days from the date of receipt of this order and furnish proof of such payment before the AO. The assessee is further directed to fully cooperate in the remand proceedings and furnish all necessary details, books of account, bank statements and supporting evidence as may be called for by the AO.

9.2 The AO shall thereafter examine the details to be furnished by the assessee and pass a fresh assessment order in accordance with law after affording reasonable opportunity of being heard to the assessee. It is made clear that in case the assessee again fails to cooperate or fails to furnish the necessary details, the AO shall be at liberty to proceed in accordance with law on the basis of materials available on record. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

10.

In the result, the appeal of the assessee is hereby allowed for statistical purposes.

Order pronounced in court on 19th day of May, 2026 Sd/- Sd/- (SOUNDARARAJAN K) (WASEEM AHMED) Judicial Member Accountant Member Bangalore Dated, 19th May, 2026 / vms /

ITA No.498/Bang/2026 Page 6 of 6

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

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