ALAPATI VARA PRASAD,VISAKHAPATNAM vs. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), VISAKHAPATNAM

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ITA 198/VIZ/2026Status: DisposedITAT Visakhapatnam29 October 2026AY 2021-225 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal acknowledged that the assessee had failed to substantiate its claims before the lower authorities on consecutive dates. However, in the interest of justice and fair play, the Tribunal decided to remit the issue back to the file of the Assessing Officer for a fresh examination. The AO was directed to afford a reasonable opportunity of being heard to the assessee, and the assessee was directed to comply with the notices issued during the remand proceedings. The Tribunal also imposed a cost of Rs. 25,000/- on the assessee, payable to the "AP State Legal Services Authority", with a copy to be produced before the AO as proof of deposit. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Alapati Vara Prasad, filed his return of income for Assessment Year 2021-22, later filing an updated return. The case was reopened under CASS due to substantial loans given by the assessee compared to his gross total income. The Assessing Officer (AO) made additions of Rs. 4,77,57,590/- towards unexplained deposits in bank accounts under Section 68 read with Section 69A and Section 115BBE of the Income Tax Act, 1961, and Rs. 7,145/- for interest income, assessing the total income at Rs. 4,90,61,395/-. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who dismissed the appeal. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and law applicable to the case? (Question of law and fact) 2. Whether the learned Commissioner of Income Tax (Appeals) was justified in deciding the appeal ex-parte without giving sufficient opportunity of hearing to the appellant? (Question of law) 3. Whether the learned Commissioner of Income Tax (Appeals) was justified in sustaining the addition of Rs. 4,77,57,590/- made by the assessing officer under Section 68 read with Section 69A of the Act towards unexplained deposits in bank accounts of the appellant? (Question of law and fact, concerning Sections 68, 69A, 115BBE) Assessee's contentions: The assessee argued that the appeal was dismissed by the CIT(A) due to non-prosecution and requested another chance by remitting the issue back to the AO for fresh examination in the interest of justice and fair play. Revenue's contentions: The Revenue objected, stating that multiple opportunities were given to the assessee, who failed to comply with notices, and requested imposition of a heavy cost for consuming valuable judicial time.

Which sections of the Income-tax Act were involved?

Section 68,Section 69A,Section 115BBE,Section 139(4),Section 139(8A),Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI SONJOY SARMA, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE

PER SONJOY SARMA, JM: This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] vide DIN: ITBA/NFAC/S/250/2025- 26/1084062706(1) dated 24-Dec-2025 for the Assessment Year 2021-22.

2.

The Assessee has raised the following grounds of appeal:

Sl Grounds of Appeal 1. The order of learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in deciding the appeal ex-parte without giving sufficient opportunity of hearing to the appellant 3. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.4,77,57,590 made by the assessing officer u/s 68 r.w.s 69A of the Act towards unexplained deposits in bank accounts of the appellant. 4. Any other ground that may be urged at the time of appeal hearing.

Brief facts of the case are that assessee is a trader and filed his return of 3. income for the A.Y.2021-2022 u/s. 139(4) of Income Tax Act, 1961 [hereinafter in short “the Act”] with a total taxable income of Rs.11,46,660/-. Subsequently, assessee had also filed updated return of income u/s.139(8A) of the Act, for an amount of Rs.12,96,660/-. The case of the assessee was reopened under CASS, the reasons being that, substantial loans given by the assessee as per Form 3CD of the debtors in comparison to Gross total income shown in the Income Tax return under presumptive income ITR. Accordingly, notice u/s.143(2) of the Act was issued to the assessee. During the assessment proceedings, the Assessing Officer, after considering all aspects of the case, he found variation in respect of credits including cash deposits in bank account [Addition u/s.68 r.w.s. 69 r.w.s 115BBE of the Act] amounting to Rs.4,77,57,590/-; and variation in respect of interest income [Addition on account of income from other sources] sum of Rs.7,145/- and assessed total income of the assessee at Rs.4,90,61,395/-.

4.

Aggrieved by the above order, assessee preferred an appeal before the Ld. CIT(A), where appeal of the assessee was dismissed by sustaining the order of the Assessing Officer.

He is still aggrieved by the above order, assessee is in appeal before this 5. Tribunal.

6.

At the time of hearing, Authorised Representative fairly stated that the appeal of the assessee was dismissed due to non-prosecution, on the part of the assessee. However, he prayed, in the interest of justice and fair play, another chance may be given to the assessee by remitting back the issue to the file of Assessing Officer in order to examine the issue afresh.

7.

On the other hand, Ld. Departmental Representative seriously raised an objection stating that multiple opportunities were given to the assessee, but the assessee has failed to comply with the notices. Therefore, impose a heavy cost upon the assessee, as the assessee has consumed valuable judicial time of this Tribunal as well as the authorities below.

8.

We, after hearing the rival submissions of the parties and perusing the material available on record, we find that in the present case of the assessee, assessee has miserably failed to substantiate its claim before the authorities below on consecutive dates. However, in the interest of justice and fair play, we remit this issue back to the file of Assessing Officer with a direction to re-examine the issue afresh, after affording reasonable opportunity of being heard to the assessee. Assessee is also directed to comply to the notices issued by the Assessing Officer during the remand proceedings.

9.

While parting with this order and looking into the conduct of Assessee, we impose cost of Rs.25,000/- (Rupees Twenty-Five Thousand only) from the Assessee, which Assessee shall be deposited in “AP State Legal Services Authority” and copy of the same should be produced before the Assessing Officer to prove that cost has been deposited.

10.

In the result, appeal filed by the Assessee is allowed for statistical purposes.

Order pronounced in the open court on 29th October, 2026.

Sd/- Sd/- OMKARESHWAR CHIDARA SONJOY SARMA ACCOUNTANT MEMBER JUDICIAL MEMBER Visakhapatnam Dated: 29.10.2026 Giridhar, Sr.PS Copy to: ALAPATI VARA PRASAD, MIG-229, APHP COLONY, PM PALEM, 1 NEAR VIJETHA SUPER MARKET, VISAKHAPATNAM-530041, ANDHRA PRADESH THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), INCOME TAX OFFICE, 2 INFINITY TOWERS, SANKARAMATAM ROAD, VISAKHAPATNAM-530016, ANDHRA PRADESH 3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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