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Facts
The Assessing Officer (AO) added Rs. 9 lakhs as unexplained money under Section 69A for the purchase of property during the assessment year 2020-2021. The CIT(A) confirmed this addition ex-parte, stating that the assessee failed to furnish supporting evidence despite multiple opportunities, leading to the amount being treated as unexplained.
Held
The Income Tax Appellate Tribunal (ITAT) set aside the order of the CIT(A) and remanded the matter back to the CIT(A). The ITAT granted the assessee one more opportunity to submit all relevant details and supporting evidences to explain the source of the Rs. 9 lakhs.
Key Issues
Whether the CIT(A) erred in confirming the addition under Section 69A ex-parte by declining further adjournments, thereby denying sufficient opportunity to the assessee to explain the source of funds.
Sections Cited
147, 69A, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SMC’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the order dated 28.06.2025 of learned CIT(A), Hyderabad- 11, Hyderabad, for the assessment year 2020-2021.
The assessee has raised the following grounds of appeal :
2 ITA.No.1397/Hyd./2025 1. “The order of the Ld. CIT(A) in upholding the order of the Assessing Officer is erroneous in law as well as in facts of the case.
2. The Ld. AO has ignored the fact that there is only bank payment made and no cash was involved and erred in treating the amount of Rs.9,00,000/- as unexplained money u/s 69A.
The Ld. AO has erroneously arrived at a false conclusion that there is cash payment involved without any supporting material and such action does not have any basis.
The Ld. CIT(A) should have observed the that there is no speaking evidence with the Assessing Officer to make the addition u/s 69A as the purchase of property was made through proper banking channel and there is nothing unexplained.
The Ld. CIT(A) should have considered that there are sufficient sources for the Appellant to purchase the said property and accordingly erred in confirming the addition made by the Ld. AO.
The Ld. CTT(A) without allowing sufficient opportunity has upheld the addition which is bad in law.
The Appellant craves to add/leave/alter/modify any other ground of appeal at the time of hearing.”
3 ITA.No.1397/Hyd./2025 3. At the time of hearing, learned Authorised Representative of the Assessee submitted has that the learned CIT(A) has dismissed the appeal of the assessee while passing the impugned order ex-parte. He has referred to the impugned order and submitted that the assessee requested for adjournment, however, the learned CIT(A) has declined to grant the adjournment of hearing and passed the impugned order ex-parte. Thus, the learned Authorised Representative of the Assessee has submitted that the assessee may be given one more opportunity to present her case before the learned CIT(A) and to explain the source of the payment of Rs.9 lakhs for which the addition is made by the Assessing Officer and confirmed by the learned CIT(A).
4. On the other hand, learned DR for the Revenue has submitted that the learned CIT(A) has given sufficient opportunities to the assessee by issuing three notices, but, the assessee failed to furnish any supporting evidences and consequently, the addition was confirmed by the learned CIT(A). He has relied upon the impugned order of the learned CIT(A).
4 ITA.No.1397/Hyd./2025 5. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has made the addition of Rs.9 lakhs while passing the assessment order u/sec.147 of the Income Tax Act, 1961 [in short "the Act"] on account of unexplained money u/sec.69A of the Act. The assessee challenged the said addition before the learned CIT(A). In response to the notice, the assessee sought adjournment of the hearing for furnishing the required information and supporting evidences. However, on third occasion, the learned CIT(A) declined to grant further opportunity to the assessee and passed the impugned order. The relevant observation of the learned CIT(A) in Paras-6.3 and 6.4.2 are as under : “6.3. To examine the other grounds raised by the appellant, notices u/s. 250 of the IT. Act was issued on 21.04.2025, 26.05.2025 & 12.06.2025, requiring the appellant for written submissions and furnishing the supporting evidences, to which no information or any submissions was filed, except filing requests for adjournments. Instead of furnishing the required information or substantiating the grounds of appeal. the appellant merely filed applications seeking adjournments. The appellant failed to substantiate its grounds of appeal with 5. ITA.No.1397/Hyd./2025 evidences. Sufficient opportunities have been granted in the interest of natural justice and no further adjournments in this case can be granted.
6.4. xxx xxx xxx
6.4.1. xxx xxx xxx 6.4.2. These submissions are contradictory. The appellant must give a consistent and verifiable explanation regarding the source of cash payment. The appellant has not utilized any opportunities provided during the assessment proceedings or during the appellate proceedings, in explaining the sources for the cash payment with supporting documents. During the appellant proceedings, the appellant was provided 3 opportunities by issue of notices u/s. 250 on 21.04.2025, 26.05.2025 & 12.06.2025. However, no information was filed in response to any of the notices issued apart from seeking adjournment for the notices issued on 26.05.2025 & 12.06.2025. The onus to explain the sources for the cash payment with supporting documents lies with the appellant, which she has failed to discharge. Without any supporting documentary evidences, the cash payment of Rs.9,00,000/-remains unexplained and there is no reason to interfere with the action of the assessing officer and accordingly the addition of the Rs.9,00,000/- is confirmed.”
6 ITA.No.1397/Hyd./2025 6. Thus, it is clear that the assessee sought adjournment in response to the notice issued by the learned CIT(A). On first 02 occasions the learned CIT(A) has granted adjournment, but, in response to 3rd notice, the assessee filed an application seeking adjournment which was declined by the learned CIT(A). Now, the learned Authorised Representative of the Assessee has pleaded that the assessee would file the requisite supporting evidences and details before the learned CIT(A) in case another opportunity is granted to the assessee. Accordingly, in the facts and circumstances of the case and in the interest of justice, we grant further opportunity to the assessee to submit all the relevant details as well as supporting evidences in support of the claim before the learned CIT(A). Hence, the impugned order of the learned CIT(A) is set-aside and the matter is remanded to the record of the learned CIT(A) for fresh adjudication, after granting one more opportunity to the assessee to submit the necessary details and relevant supporting evidences.
7 ITA.No.1397/Hyd./2025 7. In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on the conclusion of hearing i.e., on 11.11.2025.