LAXMAN RAO GORUKANTI,WARANGAL vs. ITO, WARD -1, WARANGAL

ITA 434/HYD/2026Status: DisposedITAT Hyderabad30 September 2026AY 2016-1713 pages
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What did the Tribunal hold?

The Tribunal condoned the delay of 14 days in filing the appeal, taking a lenient view of the assessee's explanation of personal and domestic issues and his age. Regarding the substantive issue, the Tribunal noted that the assessee provided details of gold loan credit and numerous withdrawals and subsequent deposits in the bank account, occurring on a regular, almost daily basis. The Tribunal observed that these transactions indicated business activity, specifically chit fund operations, as claimed by the assessee. It was held that prior withdrawals from the bank account could not be denied as a source for subsequent deposits, especially given the nature of the business. To resolve the dispute and considering the facts and circumstances, the Tribunal directed that the income of the assessee be estimated at 5% of the total deposit in the bank account. The AO was instructed to assess the income accordingly. The issue of gross violations of principles of natural justice was not explicitly decided but implicitly addressed by the Tribunal's engagement with the merits of the case.

What were the facts?

The assessee, Laxman Rao Gorukanti, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, against an order dated 17.11.2025 passed by the CIT(A)-NFAC, Delhi, for Assessment Year 2016-2017. There was a delay of 14 days in filing the appeal. The assessee, a senior citizen aged 62, attributed the delay to personal and domestic issues, and difficulty in following up with his Chartered Accountant. The Revenue did not seriously object to the condonation of delay. The core dispute concerns an addition of Rs. 31,59,000 made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961, for unexplained money deposited in the assessee's bank account. The assessee had filed a return of income declaring Rs. 1,91,000 and agricultural income of Rs. 1 lakh in response to a notice under Section 148.

What were the issues?

1. Whether the delay of 14 days in filing the appeal before the Tribunal should be condoned, considering the assessee's reasons and the principles of natural justice. 2. Whether the addition of Rs. 31,59,000 as unexplained money under Section 69A of the Income Tax Act, 1961, is justified, given the assessee's claim of engaging in chit fund business and the explanation of deposits through gold loan credit and prior withdrawals. Assessee's Contentions: - The delay was due to unavoidable personal and domestic issues, and not willful. The assessee is a senior citizen and would suffer irreparable loss if the delay is not condoned. - The AO erred in confirming the addition of Rs. 31,59,000. The deposits in the bank account were from the assessee's chit fund business. The authorities below failed to appreciate that the assessee only earns commission income from this business, which was already considered in the return of income. - The assessee explained the source of deposits as gold loan credit and regular withdrawals from the bank account which were subsequently redeposited. These prior withdrawals should be considered as the source of subsequent deposits. - The transactions reflect business activity, and therefore, the income should be estimated at a reasonable rate. Revenue's Contentions: - The assessee failed to explain the source of deposits in the bank account. - Withdrawals from the bank account cannot be considered a source unless the purpose of withdrawal and subsequent redeposit is explained.

Which sections of the Income-tax Act were involved?

Section 69A,Section 139,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO

Pronounced: 30.09.2026

This appeal by the Assessee is directed against the Order dated 17.11.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi, for the Assessment Year 2016-2017. 2. At the outset, there is a delay of 14 days in filing the present appeal. The assessee has filed a petition for condonation of delay which is also supported by the affidavit of the assessee. The learned Authorised Repr

The order continues below.

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