KIRAN REDDY VISIREDDY,HYDERABAD vs. DCIT, CIRCLE-12(1), HYDERABAD

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ITA 1131/HYD/2025Status: DisposedITAT Hyderabad10 September 2025AY 2017-18Bench: SHRI MANJUNATHA G (Accountant Member), SHRI RAVISH SOOD (Judicial Member)9 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the ex-parte assessment was made without sufficient opportunity and the CIT(A) dismissed the appeal without considering relevant details, videoconferencing requests, or legal challenges to the Section 148 notice. The Tribunal set aside the CIT(A)'s order and restored the matter to the Assessing Officer for de novo verification, granting the assessee a fresh opportunity to explain the bank credits, which were claimed to be related to his employment.

What were the facts?

The assessee, an individual, did not file an income tax return for AY 2017-18 and was flagged as a high-risk non-filer. Information indicated significant transactions and bank deposits, leading the Assessing Officer to believe income escaped assessment. The AO issued a Section 148 notice and subsequently made an ex-parte addition of Rs.22,75,34,112/- as unexplained money under Section 69A, which was sustained by the CIT(A).

What were the issues?

Whether the ex-parte assessment and order by the CIT(A) were valid without providing sufficient opportunity and considering the assessee's explanations; whether the legal challenge to the Section 148 notice and procedures under Section 144B were properly addressed.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 142(1),Section 144,Section 69A,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD

Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD

Hearing: 08.09.2025Pronounced: 10.09.2025

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.1131/Hyd./2025 Assessment Year 2017-2018 Kiran Reddy Vasireddy, The DCIT, Hyderabad – 500 048. Circle-12(1), Telangana. vs. Hyderabad. PAN AMTPV9351J Telangana. (Appellant) (Respondent) For Assessee : CA, C Maheshwar Reddy For Revenue : MS U. Mini Chandran, CIT-DR Date of Hearing : 08.09.2025 Date of Pronouncement : 10.09.2025 ORDER PER MANJUNATHA G. :

The above appeal has been filed by the assessee against the Order dated 23.05.2025 of the learned CIT(A)- National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2017-2018.

2.

Briefly stated facts of the case are that, the assesse is an Individual and has not filed return of income for the year under consideration. On specific information

2 ITA.No.1131/Hyd./2025 was flagged as per Risk Management Strategy formulated by the CBDT through Insight Portal under the category 'RMS - High Risk Non-Filer for the Financial Year 2016-17 relevant to assessment year 2017-2018, the assessee, had carried out transactions with Adishwar Auto Diagnostics Private Limited to the tune of Rs.33,57,782/- and deposit in Axis Bank Ltd., to the tune of Rs.70,20,740/-. Therefore, the Assessing Officer has reason to believe that, income chargeable to tax has escaped assessment. During the course of assessment proceedings, the Assessing Officer noted that, as per the details available on record, the assessee has purchased vehicle and deposited cash in the bank account of the assessee as mentioned in Explanation to Section 149 of the IT Act, 1961. Considering the non explanation from the assessee and based on the information with the department, the Assessing Officer considered the case of the assessee as a fit case for issue of notice u/sec.148 of the Income Tax Act, 1961 [in short “the Act”] and accordingly, notice u/sec.148 of the Act was issued on 13.03.2024. Thereafter, the case was transferred to Faceless

3 ITA.No.1131/Hyd./2025 Assessment Centre with the intimation to the assessee on 13.06.2024. The Assessing Officer has issued notices u/sec.142(1) of the Act on 14.06.2024, 01.08.2024 and 09.10.2024 and also issued show cause notices u/sec.144 of the Act on 21.08.2024, 21.11.2024 and final show cause notice on 09.01.2025. The Assessing Officer noted that the assessee has login in e-filing portal on 14.10.2024 which is evident as per screen-shot at page-9 of the assessment order. However, the assessee did not file any information to substantiate his case. Therefore, the Assessing Officer determined the total income of the assessee at Rs.22,75,34,112/- as unexplained money u/sec.69A of the Income Tax Act, 1961 towards cash deposits and other credits as against the not filing the return of income by the assessee vide order dated 24.01.2025 passed u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961.

3.

Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). During the course of appellate proceedings, the assessee has furnished information. However, the learned CIT(A) being not satisfied

4 ITA.No.1131/Hyd./2025 with the explanation offered by the assessee, sustained the addition made by the Assessing Officer.

4.

Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.

5.

CA, C. Maheshwar Reddy, Learned Counsel for the Assessee submitted that, the Assessing Officer has passed the ex-parte assessment order without providing sufficient opportunity of hearing to the assessee. During the course of appellate proceedings before the learned CIT(A), the assessee has furnished information/details and also asked for videoconferencing hearing. However, the learned CIT(A) dismissed the appeal of the assessee without considering the relevant details filed by the assessee and also by not providing videoconferencing of hearing as requested by the assessee. The Learned Counsel for the Assessee further submitted that, the assessee has also raised legal issue of challenging notice issued u/sec.148 of the Act by the jurisdictional Assessing Officer contrary to sec.144B of the Act. He submitted that, although, the 5 ITA.No.1131/Hyd./2025 assessee has challenged the legal issue, but, the learned CIT(A) has not even considered the grounds of appeal of the assessee while disposing of the appeal. The Counsel for the Assessee explained that, the assessee is a salaried employee and credits in the bank account pertains to the Company for which the assessee was working and this fact needs to be explained to the Assessing Officer by filing relevant reconciliation and confirmation from the Company. He, therefore, pleaded that, the issue may be set-aside to the file of Assessing Officer for de novo verification in the interest of justice.

6. MS. U Mini Chandran, learned CIT-DR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, the assessee did not file his return of income for the impugned assessment year. Further, the assessee failed to substantiate his case during the course of assessment proceedings with respect to cash deposits and other credits with cogent evidences, despite providing various opportunities. Therefore, the Assessing Officer, in absence of proper explanation from the assessee

6 ITA.No.1131/Hyd./2025 along with relevant documentary evidences, made the impugned addition of Rs.22,75,34,112/- in the hands of the assessee. Further, during the course of appellate proceedings before the learned CIT(A) also, the assessee has not explained the cash credits into his bank account and seeks time for reconciliation on the pretext that, he is residing in Australia. Since, the assessee has not provided an iota of evidence before the learned CIT(A) to verify the genuineness of the transactions and the credits in the bank accounts are accepted by the assessee, the learned CIT(A) has rightly sustained the addition made by the Assessing Officer. She, accordingly, submitted that, the order of the learned CIT(A) should be upheld.

7.

We have heard both the parties, perused the material on record and gone through the orders of the authorities below. We find that, the Assessing Officer has passed ex-parte assessment order and made addition of Rs.22,75,34,112/- as unexplained money u/sec.69A of the Income Tax Act, 1961 towards cash deposits and other credits into the bank account of the assessee. Before the 7 ITA.No.1131/Hyd./2025 learned CIT(A), although, the assessee has filed relevant details and also asked for videoconferencing hearing, but, the learned CIT(A) disposed of the appeal of the assessee without considering the relevant details filed by the assessee and also by not providing videoconferencing of hearing as requested by the assessee. Further, the assessee had also raised legal issue by challenging notice issued u/sec.148 of the Act by the jurisdictional Assessing Officer contrary to sec.144B of the Income Tax Act, 1961. We find that, although, the assessee has challenged the legal issue, but, the learned CIT(A) has not even considered the grounds of appeal

of the assessee while disposing of the appeal including the legal issue challenging the notice issued u/sec.148 of the Act by the jurisdictional Assessing Officer contrary to sec.144B of the Income Tax Act, 1961. Further, the learned CIT(A) not even considered relevant submissions of the assessee while disposing of the appeal. During the course of hearing, it was the contention of the Counsel for the Assessee that, the assessee is a salaried employee and credits in the bank account pertains to the Company, for 8. ITA.No.1131/Hyd./2025 which, the assessee was working and this fact needs to be explained to the Assessing Officer by filing relevant reconciliation and confirmation from the Company. We find that, since the proceedings before the Assessing Officer are ex-parte and the learned CIT(A) has not considered the issue in light of relevant evidences filed by the assessee, in our considered view, the issue needs to be set-aside to the file of Assessing Officer for de novo verification. We, therefore, set-aside the order of the learned CIT(A) and restore the issue back to the file of jurisdictional Assessing Officer for de novo verification, after providing one more opportunity of hearing to the assessee. Needless to say, the assessee shall furnish relevant details as and when the case is posted for hearing.

8.

In the result, appeal of the assessee is allowed for statistical purposes.

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