ANNAPUREDDY VENKATRAMIREDDY,HYDERABAD vs. ITO., WARD-15(1), HYDERABAD
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals)
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Annapureddy Venkatramireddy
[“CIT(A)”] National Faceless Appeal Centre (“NFAC”), Delhi dated
17.03.2025, which in turn arises from the order passed by the AO u/s 144 of the Income Tax Act, 1961 (“the Act”) dated 13.11.2019
for the A.Y.2017-18. 2. The assessee has assailed the impugned order on the following grounds before us :
(i)
The order of the learned Commissioner of Income Tax
(Appeals) is against the law, weight of evidence and probabilities of case.
(ii)
The learned Commissioner ought to have appreciated that the assessee opted not to communicate by email, therefore, the learned CIT erred in sending notices u/s 250 by email and further erred in confirming the addition made u/s 69A amounting to Rs.1,77,54,144/-.
(iii)
The learned Commissioner erred in confirming the order of the Assessing Officer in which he entire turnover of Rs.1,77,54,144/- is considered as income u/s 69A of the IT Act.
(iv)
The learned Commissioner ought to have determined the total income considering the rate of profit admitted and accepted by the Department in the earlier years and further erred in confirming the order of the Assessing Officer, where total income is determined at Rs.1,77,54,144/- u/s 69A of the IT Act.
(v)
The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal if it is considered necessary.
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Annapureddy Venkatramireddy
Succinctly stated, the AO based on information that the assessee during the demonetization period, i.e., 09.11.2016 to 31.12.2016, had made cash deposits of Rs.26,38,500/- in his bank account No.541001010050475 held with Union Bank of India, Dr.A.S.Rao Nagar branch, Secunderabad, but had not filed his return of income, issued notice u/s 142(1) of the Act. Since, there was no response, a show cause letter dated 23.08.2019 was issued and served on the assessee through e-mail calling upon him to furnish the sources of making the cash deposits along with documentary evidence on or before 28.08.2019. A final show cause letter was issued on 16.09.2019, as there was no response to the earlier notices. As the assessee neither filed his return of income nor furnished any explanation regarding the source of the cash deposits of Rs.26.38 lacs (supra), therefore, the AO called for the requisite details from the bank u/s 133(6) of the Act. On perusal of the bank statement, the AO observed that there were total cash deposits of Rs.26.38 lacs made during the demonetization period i.e. from 09.11.2016 to 31.12.2016 and total credits in the bank account amounted to Rs.1,77,54,144/-. Thereafter, the A.O.
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Annapureddy Venkatramireddy taking cognizance of the fact that no explanation regarding the cash deposit of Rs.26.38 lacs (supra) was forthcoming, held the entire amount of Rs.1.77 crores as having been sourced out of the assessee’s unexplained money u/s 69A of the Act.
4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee despite having been afforded five opportunities, failed to participate in the proceedings before the first appellate authority, therefore, the latter dismissed the appeal on the said count itself. For the sake of clarity, the observations of the CIT(A) are culled out as under :
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Annapureddy Venkatramireddy
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Annapureddy Venkatramireddy
We find on perusal of the assessment order that the AO in the absence of any explanation forthcoming from the assessee had held the entire amount of credits in his bank account of Rs.1,77,54,144/-(supra), as having been sourced out of his unexplained money u/s 69A of the Act. Apart from that it 7 Annapureddy Venkatramireddy transpires that for the failure on the part of the assessee to participate in the proceedings before CIT(A) despite having been afforded sufficient opportunity, i.e. vide notices issued dated 11.11.2021, 19.01.2022, 14.07.2022, 09.03.20223 and 15.02.2025, the appellate authority was constrained to approve the view taken by the AO and uphold the addition of Rs.1.77 crores (approx.) made by him u/s 69A of the Act. 6. Shri Mohd. Afzal, Advocate, learned authorized representative for the assessee (for short “Ld.AR”), at the threshold of the hearing of the appeal, submitted that as the assessee in the “Memorandum of Appeal”, i.e. “Form No.35” had not opted for receipt of notices from the office of CIT(A) through e-mail, but no physical/ hard copy of any notice, intimating the fixation of the hearing of the appeal either on the aforesaid occasions was ever served upon the assessee. Elaborating further, the Ld.AR submitted that though the assessee way back as on 07.01.2021 had requested for an adjournment of the matter by a month’s time, but, thereafter neither of the notices intimating the fixation of the appeal was ever served upon him. The Ld.AR further submitted
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Annapureddy Venkatramireddy that as the deposits made in the bank account of the assessee was sourced out of his business turnover, therefore, there was no justification for the AO to have held the entire amount as unexplained money u/s 69A of the Act.
7. The Ld.AR submitted that as the assessee, for no fault on his part had remained divested of an opportunity of participating in the proceedings before the CIT(A), therefore, the matter in all fairness may be set aside to his file with a direction to readjudicate the appeal.
8. Per contra, the learned Departmental Representative (for short “Ld.DR”) relied upon the orders of the authorities below.
9. We have thoughtfully considered the contentions advanced by the learned authorized representatives in the backdrop of the orders of the lower authorities. Admittedly, it is a matter of fact discernible from the record that the assessee in the Memorandum of Appeal, i.e. Form No.35 has specifically not opted for receipt of notices from the office of CIT(A) through e-mail. We find, though the assessee had way back on 07.01.2021 requested for adjournment, but all the notices, which were thereafter issued by 9
Annapureddy Venkatramireddy the CIT(A) were never physically served upon the assessee as had specifically been requested by him by exercising the discretion while filing the appeal, i.e. in Form No.35. For the sake of clarity, relevant part of the Memorandum of Appeal filed in Form No.35 is culled out as under :
Be that it may, we are of the firm conviction that as the assessee had remained divested of a sufficient opportunity to participate in the proceedings before the CIT(A) for no fault on his part, and had remained oblivion about the ongoing appellate proceedings, therefore, the matter in all fairness requires to be restored to the file of the first appellate authority with a direction to readjudicate the same afresh. Needless to say, the CIT(A) shall 10 Annapureddy Venkatramireddy in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee. 11. Resultantly, the appeal filed by the assessee is allowed for statistical purposes in terms of our aforesaid observations. 12 ससतम्बर, 2025 को खुली अदालत में सुनाया गया आदेश। Order pronounced in the Open Court on 12th September, 2025. (मंजूनाथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER (रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Hyderabad, dated 12.09.2025. #**L.Rama /SPS
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Annapureddy Venkatramireddy
आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-
निर्धाररती/The Assessee : Shri Annapureddy Venkatramireddy, 1-7- 92, Kamala Nagar, ECIL Post, Hyderabad 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward-15(1), IT Towers, Masab Tank, Hyderabad 3. The Principal Commissioner of Income Tax, Hyderabad 4. नवभधगीय प्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file
आदेशधिुसधर / BY ORDER
Sr. Private Secretary
ITAT, Hyderabad