Z 163 ANNAVARAM PACS LIMITED,ANNAVARAM vs. ITO, NARASARAOPET

ITA 814/VIZ/2025Status: DisposedITAT Visakhapatnam09 October 2026AY 2018-20196 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal noted that the assessee, a PACCS engaged in providing credit facilities, failed to file its return by the due date and filed it only in response to a notice under Section 148, claiming deduction under Section 80P. The AO made additions under Section 69A for unexplained money due to the assessee's failure to explain the nature and source of credits. The assessee also failed to appear or provide details before the CIT(A). While acknowledging the assessee's claim that credits were normal business transactions, the Tribunal found that the assessee could not provide any details to substantiate this before the AO or CIT(A). Considering the ex parte nature of the proceedings and the assessee's status as a credit co-operative society operating from a remote village, which might face difficulties in collecting details, the Tribunal decided to set aside the CIT(A)'s order and remand the issue back to the AO. The AO is directed to reconsider the issue after providing a reasonable opportunity of hearing and allowing the assessee to furnish supporting evidence. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Z 163 Annavaram PACS Ltd., a Primary Agricultural Co-operative Credit Society Ltd., failed to file its Return of Income for AY 2018-19. The assessment was reopened under Section 147, and a notice under Section 148 was issued. The assessee eventually filed a return declaring Rs.38,400 after claiming deduction under Section 80P. During scrutiny, the Assessing Officer (AO) noted cash deposits and other credits in bank accounts and requested details. The assessee provided no explanation. Consequently, the AO passed a best judgment assessment order under Section 144 read with Section 147, determining total income at Rs.21,18,09,425 by adding Rs.21,17,71,025 under Section 69A as unexplained money. The assessee appealed to the CIT(A), but neither appeared nor filed submissions despite multiple adjournments. The CIT(A) dismissed the appeal for non-prosecution, upholding the AO's addition.

What were the issues?

1. Whether the Tribunal should set aside the order of the CIT(A) and remit the issue back to the AO for fresh consideration, given that the proceedings before both the AO and CIT(A) were ex parte and the assessee claims the credits were normal business transactions recorded in its books. The assessee argued that the assessment proceedings before the AO were ex parte, and it could not file details before the CIT(A). It contended that the additions made by the AO for cash deposits and other credits were normal business transactions recorded in its books. The assessee requested the matter be remitted back to the AO to provide another opportunity to explain its case. The revenue, through the CIT(DR), fairly agreed that since the proceedings before the AO and CIT(A) were ex parte, the matter could be remitted back to the AO for verification of the assessee's claim.

Which sections of the Income-tax Act were involved?

Section 139,Section 147,Section 148,Section 144,Section 69A,Section 80P

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH

Before: SHRI VIJAY PAL RAO, HON’BLE & SHRI MANJUNATHA.G, HON’BLE

Hearing: 17.09.2026Pronounced: 09.10.2026

PER MANJUNATHA.G, AM:

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [in short, “the Ld.CIT(A)”] dated 07.10.2025, for assessment year 2018-19. Z 163 Annavaram PACS Ltd. ::

The order continues below.

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