KALPANA VEERA REDDY,HYDERABAD vs. INCOME TAX OFFICER, WARD-8(2), HYDERABAD
Income Tax Appellate Tribunal, Hyderabad ‘SM’ Bench, Hyderabad
PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National
Faceless Appeal Center (NFAC), Delhi, dated 25/11/2024, which in turn arises from the order passed by the Assessing Officer under Section 144 of the Income Tax Act, 1961 (for short, “Act”), dated
03/10/2019 for A.Y. 2017-18. 2
2. The assessee has assailed the impugned order on the following grounds of appeal before us:
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2. Succinctly stated the AO, based on the information gathered during the phase of online verification under ‘Operation Clear Money’
that the assessee had during the demonetization period made substantial cash deposits of Rs. 11.56 lakhs in his bank account, but had not filed his return of income for the year under consideration, issued notice U/s. 142(1) of the Act, dated 26/12/2017 calling upon him to file his return of income for the said year.
As the assessee failed to comply with the notices issued by the AO U/s. 142(1) of the Act, therefore, the latter held the entire amount of cash deposits/credits of Rs. 30,99,469/- in his bank account No. 990900360002413 with Telangana State Cooperative Apex Bank, Himayatnagar as having been sourced out of his unexplained money U/s. 69A of the Act.
Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee, despite sufficient opportunity, had failed to participate in the proceedings before the CIT(A), therefore, the latter was constrained to dismiss the appeal for want of prosecution. For the sake of clarity, the observations of the CIT(A) are culled out as under:
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Representative (for short “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that though the assessee in the course of the proceedings before the CIT(A) had filed with him the written submissions, application for admission of additional evidence under Rule-46A of the IT Rules, 1962 and a copy of the bank statement which evidenced the availability of sufficient cash in hand that was utilized to make the subject cash deposits in his bank account, but the CIT(A) had miserably failed to consider the same. The Ld. AR submitted that the CIT (A) had, on the contrary, observed that the assessee, despite having been afforded sufficient opportunity, failed to provide any documentary evidence to support the grounds of appeal based on which the impugned addition was assailed before him. Elaborating further on his contention, the Ld. AR submitted that the assessee during the subject year had raised a gold loan vide A/c. No. 787/9632/184221 from Telangana State Cooperative Apex Bank, Himayatnagar during the period 11/07/2016 to 26/10/2016, Page 5 of the APB. The Ld. AR submitted that the loan funds raised from the bank were thereafter routed to his Savings Bank Account No. 990900360002413 with Telangana State Cooperative Apex Bank, Himayatnagar, Pages 3 & 4 of the APB. The Ld. AR submitted that out of the aforesaid loan amount, the assessee had on two days i.e., on 01/06/2016 and 11/07/2016
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Elaborating further on his contention, the Ld. AR submitted that it was the aforesaid cash withdrawals which, thereafter, were utilized by the assessee for making the cash deposits in the same bank account on 15/11/2016 (Rs. 9,52,000/-) and on 13/12/2016 (Rs. 2,00,000/-). The Ld. AR submitted that though the authorities below had the aforesaid documents available before them but they have most arbitrarily only taken cognizance of the cash deposits and shut their eyes to the cash in hand available with the assessee, which in turn was partly sourced out of the withdrawals made from the same bank account.
The Ld. AR submitted that the assessee is a senior citizen who, not being conversant with the e-proceedings had for bonafide reasons failed to participate before the authorities below. The Ld. AR submitted that in all fairness and in the interest of justice, the matter be set-aside to the file of the AO with a direction to re-adjudicate the same after affording a reasonable opportunity of being heard to the assessee.
Per contra, the Learned Departmental Representative relied on the orders of the lower authorities.
We have thoughtfully considered the facts involved in the present case in the backdrop of the orders of the authorities below. Admittedly, it is a matter of fact that the CIT(A) had failed to take cognizance of the 7 Kalpana Veera Reddy vs. ITO assessee’s written submissions, Page 2 of the APB, application for admission of additional evidence under Rule 46A of the Rules (filed on 19/12/2019), Page 1 of the APB, and also the availability of the cash in hand with the assessee which in turn was sourced out of the cash withdrawals made from the same bank account, therefore, we are of the considered view that the matter in all fairness requires to be restored to the file of the AO with a direction to re-adjudicate the same. Needless to say, the AO shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee who shall remain at liberty to substantiate his claim based on fresh documentary evidence, if any.
Resultantly, the appeal of the assessee is allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced U/Rule 34(4) of the Appellate Tribunal Rules,
1963 on 30th September, 2025. S (मधुसूदन सावͫडया)
(MADHUSUDAN SAWDIA)
लेखासद˟/ACCOUNTANT MEMBER (रवीश सूद)
(RAVISH SOOD)
Ɋाियकसद˟/JUDICIAL MEMBER d/- Hyderabad, dated 30.09.2025. OKK/sps
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आदेशकीŮितिलिपअŤेिषत/ Copy of the order forwarded to:-
िनधाŊįरती/The Assessee : Kalpana Veera Reddy, E-Block, Flat No. 101, Aditya Empress Towers, Shaikpet Nala, Tolichowki, Golconda Post, Hyderabad, Telangana-500008. 2. राजˢ/ The Revenue : Income Tax Officer, Ward-8(2), Signature Towers, Sy. No. 6(P) of Kondapur, Sy. 37(P) of Kothaguda, Opp. Botanical Gardens, Serilingampally (M), R.R. District, Hyderabad, Telangana-500084. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. िवभागीयŮितिनिध, आयकरअपीलीयअिधकरण /DR,ITAT, Hyderabad. 5. The Commissioner of Income Tax 6. गाडŊफ़ाईल / Guard file
आदेशानुसार / BY ORDER
Sr. Private Secretary
ITAT, Hyderabad.