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Facts
The assessee, an uneducated widow, failed to file her Income Tax Return for AY 2018-19. The Ld.AO initiated reassessment proceedings u/s 147 and made significant additions related to interest income, sale of immovable property, fixed deposits, and a Rs. 10 lakh cash deposit. The assessee appealed to the Ld.CIT(A), explaining that property sale proceeds were invested, and cash came from agricultural income, but the CIT(A) remitted the case back to the AO for further enquiry due to insufficient evidence.
Held
The Income Tax Appellate Tribunal (ITAT) upheld the Ld.CIT(A)'s decision to remand the issues back to the Ld.AO. The Tribunal observed that despite multiple opportunities, the assessee failed to represent herself or provide proper evidence regarding the sources of deposits and capital gains. Consequently, the ITAT dismissed the assessee's appeal, endorsing the need for further investigation by the Assessing Officer.
Key Issues
1. Validity of assessment proceedings initiated under Section 147/148 and notices issued thereunder. 2. Adequacy of explanation and evidence for sources of cash deposits, fixed deposits, and capital gains on property sale.
Sections Cited
147, 144, 148, 142(1), 148A(b)
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
करदधतध कध प्रनतनननधत्व/ : None Assessee Represented by रधजस्व कध प्रनतनननधत्व/ : Dr.Aparna Villuri, Sr.AR Department Represented by सुनवधई समधप्त होने की नतनथ/ : 15/12/2025 Date of Conclusion of Hearing घोर्णध की तधरीख/ : 18/12/2025 Date of Pronouncement ORDER
PER OMKARESHWAR CHIDARA, AM:
This appeal is filed by the assessee against the order of the Commissioner of Income Tax(Appeals) [“Ld.CIT(A)”], National Faceless Appeal Centre (“NFAC”), Delhi in DIN & Order No. ITBA/NFAC/S/250/2024-25/1072464089(1) dated 23.01.2025 arising 2 Mangamma Chirumamilla out of the order passed u/s.147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”), dated 12.03.2024 for the A.Y. 2018-19.
The case was posted for hearing on 30.04.2025, 02.06.2025, 31.07.2025, 09.08.2025, 25.08.2025, 27.10.2025, 19.11.2025, 02.12.2025 and finally on 15.12.2025. From the record, it is observed that no one represented from the assessee’s side. However, sometimes, one Mr. Sunil Surana filed adjournment letters. But from the record, it is observed that he does not have the power of attorney. There is no authorized counsel also. In view of the same, it is presumed that the assessee is not interested in pursuing the appeal.
As mentioned above, on 15.12.2025 also, when the case was posted for hearing, none represented the assessee, as usual.
Since none appeared on behalf of the assessee, the issues are decided based on the material available on record, i.e., assessment order, CIT(A) order and the grounds of appeal
. From the assessment order, it is seen that the assessee has got interest income, amount received towards sale of immovable property, fixed deposits in a nationalized bank. The assessee has also deposited Rs.10,00,000/- cash in her bank account. As the assessee did not file return of income, the Ld.AO issued notices u/s 148 of the Act on 08.04.2022. As there
3. Mangamma Chirumamilla was no compliance to the notice issued u/s 148, the Ld.AO started assessment proceedings by issuing notice u/s 142(1), notice u/s 144 and also a show cause notice to explain the sources of cash deposits, fixed deposits and also the assessee was asked about the capital gain tax to be paid on the property, which was sold by her. In response to these notices, the assessee made the following remarks, instead of giving reply to the details to be furnished as mentioned in the show cause notice issued by the Ld.AO :
“Respected Sir, I am a widow lady, don’t know English, 70 years old unable to walk with a lot of health issues, my husband had plot which I sold n got money that is only true. Pls consider my request and oblige thank you ch.mangamma.” 5. As there is no response with regard to the source of cash deposits and fixed deposits as well as capital gains tax payable on the sale of property, the Ld.AO made addition of Rs.3,88,20,359/- while completing the assessment u/s 147 r.w.s. 144 of the Act.
Aggrieved by the additions made by the Ld.AO, the assessee filed appeal before the Ld.CIT(A). During the appellate proceedings, the assessee submitted that she is an uneducated old widow, living in a small town of Guntur, Andhra Pradesh. In 2003, a property was purchased and the same was sold during the F.Y.2017-18. From the sale proceeds of the house, it was mentioned that the same was 4 Mangamma Chirumamilla invested in fixed deposit and she is having some interest income. As far as the source of cash deposit of Rs.10,00,000/- is concerned, it was claimed that she has got an agricultural land and was deriving agricultural income, out of which, cash of Rs.10,00,000/- was deposited in the bank account. It was also mentioned in the written submission, that she is uneducated and had no idea that she has to file a return of income on the above earnings. In the same written submission, it was mentioned that the additions made are not correct, because, the whole sale consideration was treated as capital gain, without reducing the cost of purchase of the same immovable property. The Ld.AO should have considered about past savings and agricultural income before making the addition of cash deposits of Rs.10,00,000/-. It was mentioned before the Ld.CIT(A) that the notices issued u/s 148A(b) are not correct, because the income chargeable to tax, which has escaped assessment was not mentioned in the notice and hence, reopening of the assessment itself is bad in law. For this proposition, certain cases law were filed before the Ld.CIT(A) and the same were reproduced by him at page 7 of the appellate order. As the notice issued by the JAO itself is invalid, the assessment framed based on the notice also is not correct in the eyes of law.
5 Mangamma Chirumamilla
After considering the submissions of the assessee, the Ld.CIT(A) held that the issues raised by the assessee require extensive enquiry and also in the interest of natural justice and to ensure a fair play, the issues were remitted back to the file of the Ld.AO, as no evidences were filed before the Ld.AO also with regard to the additions made therein.
Aggrieved by the order of the Ld.CIT(A), an appeal was filed before the ITAT, stating that the fixed deposits were made out of the sale proceeds of property, cash deposits was made out of agricultural income and savings, the total sale consideration cannot be treated as short term capital gain and the notice issued u/s 148 was also without jurisdiction.
As mentioned above, as there was no representation from the side of the assessee, despite giving several opportunities, it is decided by the Bench that the view of the Ld.CIT(A) is correct. Because, this first appellate authority has remitted the issues back to the Ld.AO as there were no proper evidences and no enquiries were also caused with regard to the sources of deposits and levy of capital gain tax on sale of immovable property. Thus, the appeal of the assessee is dismissed and the view of the Ld.CIT(A) is hereby endorsed with respect to remitting of the issues back to the file of the Ld.AO.
6 Mangamma Chirumamilla
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 18th December, 2025. S (संदीप ससह करहेल) (ओम्कारेश्वर यिदरा) (SANDEEP SINGH KARHAIL) (OMKARESHWAR CHIDARA) न्यायिक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Visakhapatnam, Dated 18.12.2025. L.Rama/SPS आदेश की प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-
1. 1. ननधधाऩरती/The : Smt.Mangamma Chirumamilla, 4-5-4/8B, 2nd Lane, Navbharat Nagar, Ring Road, Assessee Guntur 2. रधजस्व/ : The Income Tax Officer, Ward-2(1), Income The Tax Office, Lakshmipuram Main Road, Revenue Guntur 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण / DR,ITAT, Visakhapatnam.