RAMARAGHAVA REDDY KOLLAREDDY,HYDERABAD vs. ACIT., CIRCLE 6(1), HYDERABAD

Briefly stated facts of the case are that, the assessee filed his return of income on 28.10.2017 for the 2 ITA.No.234/Hyd./2025 impugned assessment year 2017-2018 declaring total income of Rs.40,22,880/-. The case was selected for scrutiny under CASS for examination of cash deposits into Canara Bank, Industrial Finance Branch, Hyderabad to the tune of Rs.18,35,83,816/- during demonetization period. The Assessing Officer issued various statutory notices u/sec.143(2) and 142(1) of the Income Tax Act, 1961 [in short “the Act”] and in absence of any reply from the side of the assessee, the Assessing Officer passed his best Judgment assessment order by determining the total income of the assessee at Rs.18,76,06,196/- by making addition of Rs.18,35,83,816/- u/sec.68 of the Act towards unexplained cash credit as against the returned income of assessee at Rs.40,22,880/- vide order dated 03.12.2019 u/sec.144 of the Income Tax Act, 1961.

Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the learned CIT(A) and the learned CIT(A) after considering the submissions of the assessee and assessment order, sustained the addition made by the Assessing Officer.

CA P Murali Mohan Rao, Learned Counsel for the Assessee, submitted that, the authorities below has not provided adequate opportunity of hearing to the assessee, before making/sustaining the addition. He submitted that, the assessee has made total deposit into Canara Bank, Industrial Finance Branch, Hyderabad to the tune of Rs.9,86,29,240/- and not Rs.18,35,83,316/- as noted by the Assessing Officer. He submitted that, in response to the notices issued by the Assessing Officer, the assessee has furnished on-line reply to substantiate his claim of cash deposit into bank account. However, the Assessing Officer passed ex-parte assessment order without considering the submissions of the assessee and also not afforded adequate opportunity while making addition u/sec.68 of the Act treating the cash deposited into bank a/c as unexplained cash credit. Even during the course of appellate proceedings, although, the assessee filed his submissions dated 27.11.2024 before the learned CIT(A) which is evident 4 ITA.No.234/Hyd./2025 from page-6 of his order, but, the learned CIT(A) has sustained the addition on the ground that, the submissions filed before him, are not filed before the Assessing Officer. He submitted that, being the appellate authority, if the learned CIT(A) was of the view that, if the submissions furnished by the assessee before him needs factual verification from the Assessing Officer, he ought to have call for remand report from the Assessing Officer. However, the learned CIT(A) without discussing the submissions of the assessee in his order, simply sustained the addition made by the Assessing Officer by observing that these submissions were not filed before the Assessing Officer, which is not in accordance with law and, therefore, the orders of the authorities below should be set aside. In the alternative, the Learned Counsel for the Assessee submitted that, in the event, the Tribunal could not delete the addition made by the Assessing Officer, the matter may be restored back to the file of Assessing Officer to reconsider the issue in the interest of justice.