VIJAY RAJ NARAYAN PERSHAD,HYDERABAD vs. ITO., WARD-9(1), HYDERABAD
आयकर अपीलीय अधिकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘B’ Bench, Hyderabad
श्री विजय पाल राि, उपाध् यक्ष एिं
श्री मिुसूदन सािडिया, लेखा सदस् य के समक्ष ।
BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER
आ.अपी.सं /ITA No.767/Hyd/2025
(निर्धारण वर्ा/Assessment Year:2018-19)
Shri Vijay Raj Narayan Pershad
Hyderabad.
PAN:ABUPN9997N
Vs.
Income Tax Officer,
Ward-9(1), Hyderabad.
(Appellant)
(Respondent)
निर्धाररती द्वधरध/Assessee by: Shri Mohd. Afzal, Advocate
रधजस् व द्वधरध/Revenue by: Shri Narender Kumar Naik,
CIT-DR
सुिवधई की तधरीख/Date of hearing: 22/07/2025
घोर्णध की तधरीख/Pronouncement: 08/08/2025
आदेश/ORDER
PER MADHUSUDAN SAWDIA, A.M. :
This appeal is filed by Shri Vijay Raj Narayan Pershad (“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 28.03.2025 for the Assessment Year 2018-19. ITA No.767/Hyd/2025 2
The grounds of appeal raised by the assessee are as under :
The brief facts of the case are that this is the second round of appeal filed by the assessee before this Tribunal. In the earlier round of proceedings, this Tribunal had set aside the matter to the file of the Ld. CIT(A) with specific directions for adjudication on merits. However, during the consequential proceedings before the Ld. CIT(A), the assessee did not comply with the notices issued and failed to appear or submit any evidence. Consequently, the Ld. CIT(A), noting the non-compliance, dismissed the appeal of the assessee ex- parte.
ITA No.767/Hyd/2025 3
Aggrieved by such dismissal of Ld. CIT(A), the assessee has once again approached this Tribunal in the present appeal. The Learned Authorised Representative (“Ld. AR”) submitted that the non-compliance before the Ld. CIT(A) was not deliberate but occurred due to certain unavoidable circumstances. He submitted that the assessee has a strong case on merits and is willing to comply with all requirements, if one final opportunity is granted. He prayed that, in the interest of justice, the matter may be restored to the file of the Ld. CIT(A) for adjudication on merits. He submitted that the assessee shall fully cooperate and furnish all required details before the Ld. CIT(A), if given another opportunity. He urged the Tribunal to adopt a liberal and judicious approach in the matter. 5. Per contra, the Learned Departmental Representative (“Ld. DR”) opposed the prayer of the assessee. He submitted that despite specific directions by the Tribunal in the earlier round, the assessee failed to avail the opportunity provided by the Ld. CIT(A) during the set-aside proceedings. He submitted that sufficient opportunity was already granted, and the assessee has not shown any justified cause
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for non-compliance. Therefore, no further opportunity should be granted.
6. We have heard the rival contentions and perused the records placed before us. We have gone through the order passed by this Tribunal in first round of the appeal, wherein at para nos.8 to 15 of its order, this Tribunal has held as under :
“ 8. We have gone through the record in the light of the submissions made on either side. According to the assessee, he is engaged in the business of retail trade of petroleum products of BPCL under the name and style rather than filling station and also running M/s. Lakefront
Bawarchi Bar and Restaurant. Assessee’s case is that, while filing the return of income, the assessee declared total income at Rs. 16,69,750/-, which is the income from the business of M/s. Lake Front Bawarchi Bar and Restaurant, but by inadvertence did not consider the turnover and net profits from the business of Ratan Filling Station. His further case is that, though he submitted the details of both the businesses before the learned
Assessing Officer, and the learned Assessing Officer referred to the business in retail trade in petroleum products in the assessment order, while passing the order learned Assessing Officer failed to verify the turnover from the petroleum products business while observing that, looking to the turnover of the assessee and type of business activity, it is not justifiable to withdrawal of such huge amount of cash.
9. On this aspect, we find that the assessee had taken the plea before the learned CIT(A) that in view of the availability of huge cash in the hands of the assessee, at the end of the day, generated by the retail business in the petroleum products and also the restaurant, he allowed the people to swipe their bank cards and to receive the said amount in cash, for a commission of rupees hundred per every Rs.1 lakh. Grievance of the assessee is that both the authorities failed to consider the consistency in the business turnover of the assessee before appreciating the facts
ITA No.767/Hyd/2025 5
surrounding the huge withdrawals. His particular grievance is that in spite of producing the details relating to the turnover of his business is in petroleum products as well as the restaurant for the past three years, with the details like net profit, GP ratio and NP ratio, instead of verifying the same in the light of the revised financials and other details furnished by the assessee, learned CIT(A) failed to take a pragmatic view.
10. On a perusal of the assessment order, we find that the learned
Assessing Officer referred to the business of the assessee in petrol filling station. Learned Assessing Officer, however, referred to the turnover of the assessee at Rs. 3,51,35,816/- and observed that looking at the said turnover and the type of business activity, the withdrawal of such huge amount of cash is not justified. Learned Assessing Officer, therefore, treated the withdrawals as expense, and observing that at the end of the day when the petrol filling station and bar and restaurant, the assessee will be holding cash in his hand, out of which the expense could have been met, and, therefore, 25% of the total turnover may be allowed as cash expense for the year under consideration. On this premise, learned
Assessing Officer allowed a sum of Rs. 87,83,954/- and disallowed the rest of Rs. 17,19,11,746/-.
11. We find that before the learned CIT(A), the assessee while filing the revised financials, pleaded that he is into the activity of allowing the swiping of the bank cards by the customers to receive the amount in cash, available in the hands of the assessee from the sales of petrol and the restaurant business, to receive a commission of Rs. 100 for every Rs. 1
lakh. It means that the assessee is routing the cash sales to the bank via swiping activity, though receiving some commission, which he declared at Rs. 1,74,436/- for the swiping activity relating to Rs. 17.44 crores.
12. In view of the figures relating to the turnover of the petrol filling station and also the restaurant for the last three years prior to the year under consideration wherein the total turnover, GP, net profit, GP ratio and NP ratio or in close proximity, we are of the considered opinion that the learned CIT(A) should have considered this plea taken by the assessee by requiring the material, if any, from the assessee and to take a plausible view. Before making a huge addition to the tune of about Rs. 18
crores, the authorities should have looked at the material as a whole.
ITA No.767/Hyd/2025 6
With this view of the matter, we are of the considered opinion that the plea taken by the assessee, explaining the reason for huge withdrawal of cash, linking it to the swiping activity and commission, requires examination by the learned CIT(A) before whom such a plea was taken for the first time. Learned CIT(A) will take a call on this aspect, after calling for any remand report, if he deems it fit and after affording an opportunity to the assessee of being heard. We accordingly set aside the findings of the authorities on this issue and restore the same to the file of the learned CIT(A) to comply with the above direction. Relevant grounds are accordingly treated as allowed for statistical purpose. 14. Insofar as the cash expenses are concerned, grievance expressed by the assessee before us is that when the assessee expressed his willingness to produce whatever the documents that are required by the learned CIT(A), learned CIT(A) without asking the assessee to produce any such material, recorded that the onus is on the assessee and since the assessee did not file any material, no interference is required on the aspect of disallowance of the cash expenses. We find some strength in this argument. Since we are restoring the issue relating to the disallowance of Rs. 17.90 crores to the file of the learned CIT(A), while deciding the issue on findings of the learned CIT(A) on cash withdrawals, therefore, we restore the issue relating to cash expenses also to his file for deciding the issue afresh, after calling for any material, if required, and after hearing the assessee. This Ground is also treated as allowed for statistical purposes. 15. In the result, appeal of the assessee is treated as allowed for statistical purpose.” 7. On perusal of above, it is evident that this Tribunal in the first round, restored the matter to the file of the Ld. CIT(A) with specific directions to adjudicate the issues on merits, after providing reasonable opportunity of being heard to the assessee. However, the assessee did not avail the opportunity granted in the remand
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proceedings before the Ld. CIT(A), leading to dismissal of the appeal.
We note that the Ld. AR has undertaken to fully cooperate and furnish necessary submissions if one final opportunity is granted. Considering the principle of natural justice and in the interest of substantial justice, we are of the considered view that the assessee deserves one final opportunity to present its case before the Ld. CIT(A). Accordingly, we deem it fit to restore the matter back to the file of the Ld. CIT(A) for de novo adjudication. Accordingly, the Ld. CIT(A) is directed to decide the matter afresh, in accordance with law and in line with the directions issued by this Tribunal in the first round of appeal, after providing adequate opportunity of being heard to the assessee. The assessee is also directed to appear before the Ld. CIT(A) and comply with all notices and directions without fail.
8. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 8th August, 2025. (VIJAY PAL RAO) (MADHUSUDAN SAWDIA)
VICE PRESIDENT ACCOUNTANT MEMBER
Hyderabad, Dated: 08.08.2025. * Reddy gp
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Copy of the Order forwarded to :
Shri Vijay Raj Narayan Pershad, 11-2-8 to 10/1, Ratan Filling Station, Hyderabad-500036 2. ITO, Ward 9(1), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file.
BY ORDER,