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Facts
The assessee, an individual, made cash deposits of Rs. 11,02,370/- during demonetization but did not file an income tax return for AY 2017-18. The Assessing Officer (AO) treated these deposits as unexplained money under Section 69A and taxed them under Section 115BBE, passing an ex-parte assessment under Section 144. The CIT(A) subsequently dismissed the assessee's appeal ex-parte due to non-compliance. The assessee claimed to be an illiterate agriculturist unaware of IT proceedings, with notices sent to an internet shop vendor's email, leading to a 518-day delay in filing the appeal to the Tribunal.
Held
The Tribunal condoned the 518-day delay in filing the appeal, finding sufficient and reasonable cause. Noting that both the AO and CIT(A) had passed ex-parte orders, and considering the new evidence submitted by the assessee at the Tribunal stage, the matter was remitted back to the AO for de-novo consideration, providing the assessee another opportunity to be heard. The assessee was cautioned to cooperate promptly in future proceedings.
Key Issues
Condonation of delay in filing appeal; validity of ex-parte assessments by AO and CIT(A); treatment of cash deposits as unexplained income under Section 69A and taxation under Section 115BBE; denial of opportunity of being heard.
Sections Cited
144, 250, 271AAC(1), 142(1), 69A, 115BBE, 143(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
(�नधा�रण वष� / Assessment Year: 2017-18) Durga Srinivasarao Yadlapalli, Vs. Income Tax Officer, Guntur. Ward-1(1), PAN: ANQPY8915K Guntur. (अपीलाथ�/ Appellant) (��यथ�/ Respondent) अपीलाथ� क� ओर से/ Appellant by : Sri MV Prasad, CA ��याथ� क� ओर से / Respondent by : Dr. Aparna Villuri, Sr. AR सुनवाई क� तार�ख / Date of Hearing : 12/08/2025 घोषणा क� तार�ख/Date of : 04/09/2025 Pronouncement O R D E R PER DUVVURU RL REDDY, Vice President:
This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)-NFAC”] in DIN & Order No.ITBA/NFAC/s/250/2023-24/1057245529(1), dt. 20/10/2023 arising out of the order passed U/s. 144 of the Income Tax Act, 1961 [“the Act”] for the AY 2017-18.
Durga Srinivasarao Yadlapalli vs. ITO 2. At the outset, it is noticed that there is a delay of 518 days in filing the appeal before the Tribunal. In respect of the belated filing of the appeal, the assessee filed a petition for condonation of delay and the relevant contents are scanned and pasted herein below: “….The appellant being illiterate is not aware of the messages being received in his cell phone and also of the fact that at the time of applying for PAN the internet shop vendor has given his own email Id as the appellant did not have any email Id, the notices U/s. 250 of the Act were being set online by the CIT(A), NFAC, Delhi were sent to the email address of the internet shop vendor. As he didn’t aware of the notices U/s. 250 being received in that email, he did not inform the same to the tax consultant. This resulted in non-compliance to the notice U/s. 250 of the Act. Hence the CIT(A) passed the order U/s. 250 of the Act on 20/10/2023 dismissing the appeal filed by the appellant. Even then also the appellant did not know about the order U/s. 250 of the Act which has been sent to his email by online. The appellant came to know about the order U/s. 250 when he received the penalty order U/s. 271AAC(1) passed by the AO along with the order U/s. 250, through speed post manually. Thus, there is a delay in filing the appeal……”
Considering the above reasons adduced by the assessee for filing of the appeal beyond the prescribed time limit with a delay of 518 days, we are of the view that there is a sufficient and reasonable cause that prevented the assessee in filing the appeal within the prescribed time limit. Therefore, we hereby condone the delay of 518 days and proceed to adjudicate the appeal on merits.
Durga Srinivasarao Yadlapalli vs. ITO 4. Brief facts of the case are that the assessee is an individual. In the case of the assessee, as per the information available with the Department, the assessee made certain cash transactions during demonetization period ie., cash deposits in his bank accounts to the tune of Rs. 10,43,370/- in the FY 2016-17 relevant to the AY 2017-18 and had not filed his return of income for the AY 2017-18. Accordingly, statutory notice U/s. 142(1) of the Act dated 09/03/2018 was issued and the same was served on 15/03/2018. However, the assessee had not filed his return of income up to 31/03/2018. Subsequently, a show cause notice dated 23/09/2019 was also issued to the assessee calling for certain information with regard to cash deposits made during the previous year relevant to the AY 2017-18. The Ld. AO further noticed that on verification of the ITS data on ITBA portal for the AY 2017-18, the assessee has made cash deposits in his bank account with Canara Bank, Guntur to the tune of Rs. 11,02,370/-. Considering the assessee’s non-compliance to the notice U/s. 142(1) and the subsequent show cause notices issued to the assessee, the Ld. AO treated the cash deposits of Rs. 11,02,370/- as unexplained money U/s. 69A of the Act and taxed the same U/s. 115BBE of the Act. Thus, the Ld. AO assessed the assessment order U/s. 144 of the Act. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A).
On appeal, the Ld. CIT(A) passed ex-parte order and observed that the assessee neither filed written submissions nor complied with the notices issued. Thus, the Ld. CIT(A) dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal:
“1. The Ld. CIT(A) is erred in facts and law while passing the order.
The Ld. CI’T(A) ought to have afforded further opportunity to the appellant instead of dismissing the appeal on mere technical reason that there was no compliance.
3. The Ld. CIT(A) erred, both on facts and in law, in confirming the AO’s action of treating the cash deposits as unexplained money U/s. 69A of the Act amounting to Rs. 11,02,370/-.
The Ld. CIT(A) erred, both on facts and in law, in confirming the action of the AO in invoking the provisions of section 115BBE of the Act in respect of the addition made without considering the material fact that in the appellant’s case, the nature of additions to the income was not falling in any of the deeming provisions of the Act and therefore, the provisions of section 115BBE of the Act could not have been invoked in the appellant’s case.
5. The Ld. CIT(A) erred, both on facts and in law, in confirming the impugned addition of Rs. 11,02,370/- made by the AO in the appellant’s income on account of ‘cash deposits and non-filing of return of income’ even though the assessee filed his return of income on 29/10/2019 well before the issue of the final opportunity for calling for information letter dated 12/11/2019 and the assessment order passed by the AO is without jurisdiction as the AO has not issued notice U/s. 143(2).
Durga Srinivasarao Yadlapalli vs. ITO 6. The appellant prays to remit the file to the Assessing Officer as the assessment proceedings were completed and order is passed U/s. 144 of the Act. 7. The appellant craves leave to add, amend, alter, vary and / or withdraw any or all the above grounds of appeal.”
6. At the outset, the Ld. AR submitted before us that the Ld. CIT(A) had passed ex-parte order without providing proper opportunity to the assessee of being heard. Ld. AR further submitted that while making the addition of Rs. 11,02,370/- the Ld. A.O. also passed the ex-parte order U/s. 144 of the Act. The Ld. AR further submitted that the assessee could not furnish any information before the Ld. AO since he is only a pure agriculturist and does not have any knowledge of the intricate provisions of the Income Tax Act, 1961. He further submitted that in order to obtain loan from the bank, the assessee applied for PAN and accordingly the Department has issued notices through ITBA portal however, the assessee did not receive any such notices. The Ld. AR also filed a petition under Rule 29 of the ITAT, Rules for production of additional evidence before the Tribunal on 23/07/2025 wherein the assessee has produced the copies of the pattadar passbooks and other documents. It was therefore pleaded that the assessee may be provided with one more opportunity to pursue his case before the Ld. AO.
7. Ld. DR, on the other hand, objected to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the Durga Srinivasarao Yadlapalli vs. ITO assessee, however, on the given dates of hearing, neither the assessee nor its Representative appeared before the Ld. CIT (A). Ld. DR further submitted that even before the Ld. A.O. though the assessee got sufficient opportunity to substantiate its case, the assessee failed to do so. Under these circumstances, the Ld. CIT (A) had no other option but to pass ex-parte order based on the materials available on record. Hence, it was pleaded that the orders passed by the Ld. Revenue Authorities do not call for any interference and appeal of the assessee may be dismissed.
We have heard the rival submissions and carefully perused the materials on record. On a perusal of the orders of the Ld. Revenue Authorities, we find that the Ld. AO and the Ld. CIT(A) have passed ex- parte orders. It is the contention of the Ld. AR that the assessee being an illiterate agriculturist and has no knowledge about the IT proceedings and therefore, the assessee has not appeared before the Ld. AO and the Ld. CIT(A). Before us, the Ld. AR also filed a petition under Rule 29 of the ITAT, Rules for production of additional evidence before the Tribunal on 23/07/2025 wherein the assessee has produced the copies of the pattadar passbooks, Storage bond with Sindhuri Cold Stoge Pvt Ltd., bank account statements, receipts from the agricultural market Durga Srinivasarao Yadlapalli vs. ITO committee and other documents. On a perusal of the facts and circumstances of the case, we are of the view that the documents produced by assessee before the Tribunal goes to the root of the matter. Under these circumstances, considering the prayer and the submissions of the Ld. AR and the issue involved in the appeal, in the interest of justice, we hereby remit the matter back to the file of Ld. AO for de-novo consideration thereby providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. Revenue Authorities in their proceedings failing which the Ld. Revenue Authorities shall be at liberty to pass appropriate orders in accordance with law and merits based on the materials on the record. It is ordered accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.
Pronounced in the open Court on 04th September, 2025.
Sd/- Sd/- (एस बालाकृ�णन) (दु�वू� आर.एल रे�डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT Dated :04/09/2025 OKK - SPS Durga Srinivasarao Yadlapalli vs. ITO आदेश की �ितिलिप अ�ेिषत /Copy of the order forwarded to:- 1. �नधा�रती/ The Assessee – Durga Srinivasarao Yadlapalli C/o. CA MV Prasad, First Floor, Opposite Prasad & Co Contractors, D.No. 6-3-871, Snehalata, Greenlands Road, Begumpeta, Hyderabad-500016. 2. राज�व/The Revenue – Income Tax Officer, Ward-1(1), O/o. ITO Ward- 1(1), CR Buildings, Kannavari Thota, Guntur, Andhra Pradesh-522001.