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Facts
The assessee, Shri Jogindra Kotapalli, failed to file a return of income under section 139(1) of the Income Tax Act, 1961. Based on information from the risk management strategy, the Assessing Officer (AO) initiated proceedings under section 147. The assessee made several cash deposits and other transactions, which the AO added to the income. The assessee's appeal to the CIT(A) was dismissed due to non-compliance.
Held
The Tribunal noted the assessee's consistent non-compliance throughout the proceedings. However, in the interest of justice, they examined the available records. The Tribunal directed the AO to verify the claim of interest income and allow deductions if eligible. They also directed the AO to verify a specific cash deposit as an internal transfer. A portion of the remaining cash deposits was accepted as explained, and the balance addition was confirmed.
Key Issues
Whether the additions made by the Assessing Officer regarding unexplained cash deposits and other transactions are justified, considering the assessee's non-compliance and explanations provided.
Sections Cited
139(1), 147, 148A(b), 148, 143(2), 144B, 69A, VI-A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SM’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Shri Jogindra Kotapalli (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 21.02.2025 for the A.Y. 2015-16.
The assessee has raised the following grounds of appeal :
1. 3. The brief facts of the case are that, the assessee is an individual who did not file any return of income under section 139(1) of the Income Tax Act, 1961 (“the Act”). Based on information available under the risk management strategy formulated by the CBDT, the Learned Assessing Officer (“Ld. AO”) found that during the year under consideration the assessee had made cash deposits of Rs.41,49,000/-, fixed deposit of Rs.12,00,000/-, purchase of equity shares of Rs.82,666/-, sale of equity shares of Rs.94,984/-, and earned salary income of Rs.1,03,982/-. Accordingly, proceedings were initiated under section 147 of the Act. Notice under section 148A(b) of the Act was issued on 19.03.2022. As there was no response from the assessee, notice under section 148 of the Act was issued by the Ld. AO on 07.04.2022. In response, the assessee filed return of income on 28.06.2023 declaring total income of Rs.1,98,610/-. The return filed was selected for scrutiny and notice under section 143(2) of the Act was issued on 28.09.2023. The assessee filed his submissions on 13.10.2023. Thereafter, show cause notice dated 31.10.2023 was issued by Ld. AO requiring the assessee to respond by 08.11.2023. However, no compliance was made by the assessee. Accordingly, the Ld. AO completed the assessment on 18.12.2023 under section 147 r.w.s. 144B of the Act by making addition of Rs.24,49,000/- under section 69A of the Act and Rs.14,703/- on account of interest income, determining the total income at Rs.26,62,310/-.
4. Aggrieved with the order of Ld. AO, the assessee filed appeal before the Ld. CIT(A). However, the assessee did not comply with the notices of Ld. CIT(A). Consequently, the Ld. CIT(A) dismissed the appeal of the assessee.
5. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before the Tribunal. This appeal was fixed before us on 09.07.2025 and 18.08.2025, when the assessee filed adjournment petitions. However, on those days, no representation was there on behalf of the assessee. Further, on the present date of hearing, neither any adjournment petition has been filed nor any representative has appeared. We therefore proceed ex-parte and adjudicate the matter after hearing the Ld. DR and perusing the material on record.
The Ld. Departmental Representative (Ld. DR) relied on the orders of the lower authorities. It was submitted that at all three stages i.e. before the Ld. AO, before the Ld. CIT(A), and even before this Tribunal, the assessee has remained mostly non-compliant. The assessee has not produced any explanation or supporting material regarding the additions made. The orders of the Revenue authorities, therefore, deserve to be upheld.
We have heard the contentions of Ld. DR and perused the material available on record. We note that the assessee has not produced any explanation, submission, or evidence in support of his grounds of appeal, either before the lower authorities or before this Tribunal. Therefore, in the interest of justice, we have examined the records available before us. We find that, under ground no. 3 of the appeal, the assessee has explained that interest income of Rs.8,709/- was earned on a savings account. In this regard, we direct the Ld. AO to verify the assessee’s claim and allow deduction, if eligible, under Chapter VI-A of the Act.
8. Under the same ground no.3 of the appeal, the assessee has further submitted that deposits of Rs.3,00,000/- was merely internal transfers from one bank account to another (from Tirupati branch to Rajahmundry branch). In this regard, the Ld. AO is directed to verify the same from the bank statements and decide the issue as per law.
9. Further, under the same ground no.3 of the appeal, with regard to the remaining cash deposits, the assessee claimed that these were out of his past savings during 30 years of service in the Railways. However, no working or supporting evidence has been furnished to show how such savings were accumulated, why they were kept in cash, and why they were deposited in tranches during the year. A bare statement of past savings cannot be accepted as explanation. At the same time, it also cannot be denied that a person with long service in Railways could have had some savings. Taking a liberal approach and to balance equities, we direct the Ld. AO to delete an amount of Rs.5,00,000/- from the cash deposits, treating the same as explained. The balance addition is confirmed.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on 10th Sept., 2025.