SUJATHA SUNKARA BY L/R GANGA RAO SUNKARA,NIZAMABAD vs. ITO, WARD- 3, NIZAMABAD, NIZAMABAD
Facts
The assessee, Ganga Rao Sunkara L/R of Sujatha Sunkara, is appealing an order from the CIT(A) concerning the assessment year 2017-2018. The assessee's grounds of appeal primarily concern the assessment of cash deposits as income and the validity of the CIT(A)'s order passed after the assessee's demise. The assessee operated a petrol pump owned by Indian Oil Corporation (IOC).
Held
The Tribunal held that the CIT(A)'s order was bad in law as it was passed against a deceased person without bringing the legal heirs on record. Regarding the assessment of cash deposits, the Tribunal found that the Assessing Officer and CIT(A) had not properly verified the transactions and documentation provided by the assessee, which indicated the deposits were sale proceeds of the petrol pump and not the assessee's income. Consequently, the matter was remanded to the Assessing Officer for fresh verification.
Key Issues
Whether the CIT(A)'s order is valid when passed against a deceased assessee without impleading legal representatives, and whether the entire cash deposits in the bank account should be treated as income.
Sections Cited
115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA.No.1844/Hyd/2025 Assessment Year 2017-2018 Ganga Rao Sunkara L/R of Sujatha The Income Tax Officer, Sunkara, Nizamabad. vs. Ward-3, PIN – 503 202 Nizamabad. PAN ACXPV6532H Telangana. (Appellant) (Respondent) िनधा�रती �ारा/Assessee by : Sri H Srinivasulu, Advocate राज� व �ारा/Revenue by : Dr. Sachin Kumar, Sr. AR सुनवाई की तारीख/Date of hearing: 27.01.2026 घोषणा की तारीख/Pronouncement: 30.01.2026 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the assessee is directed against the Order dated 07.10.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2017-2018.
2 ITA.No.1844/Hyd./2025 2. The assessee has raised the following grounds:
“Ld. CIT(A), NFAC erred in passing the order dated 07/10/2025 despite informing him that Sujatha Sunkara, assessee died on 20th April 2023 and sustained the addition of Rs.2,45,27,930,
Ld. CIT(A) ought to have brought the legal representatives on record. Ignored the proof of death filed and passed the appellate order which is bad in law and void abinitio
Ld. AO erred in determining the total income of Late Sujatha Sunkara at a sum of Rs.2,48,44,140 without appreciating that the assessee was only a maintenance and handling contractor of Indian Oil Corporation, Petrol bunk
Ld.AO and Ld. CIT(A) failed to appreciate that the assessee received only commission of Rs.9,58,522 (Gross) from Indian Oil Corporation, a Public Sector Company and the Petrol Pump was owned by the IOC and the assessee was a contractor of IOC.
Ld. AO and Ld. CIT(A) failed to appreciate that the sale proceeds were deposited in the Bank immediately and the amount was transferred immediately to IOC
Ld. AO and Ld. CIT(A) failed to appreciate that the copies of the bank accounts were filed which prove the transfer of sale proceeds to IOC and receipt of sale proceeds were confirmed by the IOC.
Ld. AO made a high-pitched assessment treating the entire turnover of the IOC as total income of the assessee amounting to Rs.2,45,27,930.
3 ITA.No.1844/Hyd./2025
Ld. AO failed to appreciate that the petrol pump is located in Rural area and a majority of the sale proceeds were in cash and such cash out of sale proceeds was deposited in Syndicate Bank Yedapally and erst while Andhra Bank, Bodhan now known as Union Bank
Ld. AO failed to appreciate the nature of business of the assessee and the entire tum over cannot the income and wrongly invoked the provisions of Section 115BBE.
Ld. AO failed to appreciate that the assessee received commission of Rs.9,58,522 (Gross) and net income was a sum of Rs.3,16,210.
Ld. CIT(A) erred in dismissing the appeal despite filing all the relevant documents and he confirmed the assessment order on the ground, that the assessee ought to have filed a certified copy of Ledger account statement from Indian Oil Corporation which was not asked during the appellant proceedings which the assessee would have filed.
The appellant craves leave to add, amend and or after the above ground of appeal, at any time before or at the time of hearing of the appeal.”
In ground no.2 the assessee has challenged the validity of the impugned order passed by the learned CIT(A) without bringing the legal representatives of the deceased assessee on record.
4 ITA.No.1844/Hyd./2025 4. The learned Authorised Representative of the Assessee has submitted that the impugned order passed by the learned CIT(A) is not valid and bad in law when it is passed against the deceased person. He has referred to page- 8 of the impugned order and submitted that the learned CIT(A) has acknowledged the fact that the assessee died on 26.04.2023 and Death Certificate was submitted before the learned CIT(A). However, the impugned order was passed in the name of the deceased assessee without bringing the legal representatives on record. In support of his contention, he has relied upon the following decisions:
Savita Kapila vs. ACIT [2020] 426 ITR 502 (Del) (HC) 2. Sandeep Kumar Shah vs. ITO [2023] 157 taxmann.com 850 (ITAT-Kol) 3. Lalita Agarwal vs. ACIT [2025] 180 taxmann.com 350 (Delhi)(Trib.) 4. Sandeep Chopra vs. PCIT [2023] 149 taxmann.com 225 (Jharkhand) (HC) 5. Motilal Hastimaji Bothra vs. ITO [2023] 108 ITR (T) 166 (Mum- Trib.) 6. Dasari Sai Annapurna vs. ACIT [2025] 181 taxmann.com 511 (Visakhapatnam-Trib.) 7. Amjad Ahmed Shaikh Vs ITO [2025] 172 taxmann.com 687 (Bom) (HC)
5 ITA.No.1844/Hyd./2025 5. On the other hand, the learned DR has submitted that despite the demise of the assessee during the pendency of the appeal before the learned CIT(A) the legal representatives of the assessee have not amended the Form- 35 and brought on record the legal representatives and therefore, the appeal of the assessee ought to have been dismissed being abated. The learned DR has thus submitted that once the assessee has not brought the legal representatives on record, it would not render the impugned order as invalid, but the appeal of the assessee ought to have been dismissed as abated.
We have considered the rival submissions and gone through the Judgments/decisions relied upon by the learned Authorised Representative of the Assessee. It is an undisputed fact that during the pendency of the appeal before the learned CIT(A), the assessee expired on 26.04.2023. However, no steps were taken on behalf of the assessee to bring the legal representatives of the deceased assessee on record either by filing the amended Form-35 or otherwise furnishing the particulars of the legal representatives of the
6 ITA.No.1844/Hyd./2025 deceased assessee with the request to bring them on record. If a strict Rule is to be followed then, on the death of the appellant, the appeal ought to have dismissed being abated in the absence of legal heirs were brought on record. However, the learned CIT(A) has passed the impugned order without dismissing the appeal in limine. Since the assessee has now filed its appeal through the legal heirs therefore, we are of the considered view that the defect which was not removed by the assessee before the learned CIT(A), is now removed by filing the present appeal through legal heirs. The validity of the order passed by the Appellate Authority cannot be challenged when the assessee itself is at fault for not producing the particulars of the legal representatives and bringing the same on record. The decision relied upon by the learned Authorised Representative of the Assessee are all in respect of validity of the assessment order and particularly, notice issued by the Assessing Officer u/sec.148 against the dead person. Therefore, those Judgments as relied upon by the learned Authorised Representative of the Assessee will not help the
7 ITA.No.1844/Hyd./2025 case of the assessee. Accordingly, ground no.2 of the assessee’s appeal is dismissed.
In the other grounds of the appeal, the solitary issue raised by the assessee is regarding the assessment of the entire cash deposits in the bank account of the assessee as ‘Income’. The learned Authorised Representative of the Assessee has submitted that the assessee was running a petrol pump owned and operated by the Indian Oil Corporation [in short “IOL”]. He has submitted that this was the petrol pump in the category of “Company Owned and Company Operated [in short “COCO”] and assessee was running the said retail outlet of the IOC and receiving only commission on the sales. He has further submitted that the entire commission income of the assessee was subjected to TDS duly reflected in Form-26AS. Therefore, the deposit in the bank account was not the income of the assessee but it was the sale proceeds of the IOC and assessee was receiving only commission income. He has further submitted that the learned CIT(A) has confirmed the addition made by the Assessing Officer by citing the reasons that documents
8 ITA.No.1844/Hyd./2025 produced by the assessee are not sufficient to explain the source of cash deposit in the bank account and the assessee could have filed certified copy of the ledger account statement from IOC. The learned Authorised Representative of the Assessee has submitted that the assessee duly filed the ledger account in the books of IOC which is placed at Page nos.92 to 99 of the paper book. Thus, the learned Authorised Representative of the Assessee has submitted that the addition made by the Assessing Officer and confirmed by the learned CIT(A) is not sustainable and liable to be deleted.
On the other hand, the learned DR has submitted that the assessee has not filed any record to explain the source of the cash deposit in the bank account. The Assessing Officer as well as the learned CIT(A) has given the finding that the assessee failed to explain the source of cash deposit in the bank account. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as relevant material on record. As it is apparent and manifest from the record that the assessee was running a petrol bunk
9 ITA.No.1844/Hyd./2025 owned and operated by IOC in the category of “COCO” retail outlet. Thus, it is clear that assessee was only earning the commission for operating the said petrol pump on behalf of the IOC without any investment or capital expenditure. The entire commission of the assessee was subjected to TDS as reflected in Form-26AS. The assessee has earned the commission on the sale of petrol and diesel from the petrol pump owned by IOC under the Contract for maintenance and handling to the tune of Rs.9,58,522/-. The transactions in the bank account show the regular deposits and transfer in favour of IOC which suggest that the deposit was prima facie representing sales of the petrol pump. Further, the assessee has also filed the ledger account in the books of IOC showing the transaction of purchase and sale. Therefore, even as per the record available with the Assessing Officer in the shape of the bank account as well as Form-26AS, it is clear that the assessee was having the source of cash as sale from the petrol pump owned by IOC. However, neither the Assessing Officer nor the learned CIT(A) has taken any steps to verify the transactions reflected in the bank account along with the
10 ITA.No.1844/Hyd./2025 ledger account of the assessee in the books of IOC. Hence, prima facie we are of the view that the addition made by the Assessing Officer of the entire cash deposit in the bank account is unjustified. Since the relevant record has not been verified by the authorities below therefore, the impugned order of the learned CIT(A) is set aside and the matter is remanded to the record of the Assessing Officer for proper verification of the relevant facts and particularly, the transaction in the bank account of the assessee along with the ledger account of the assessee in the books of IOC as well as the TDS details in Form-26AS. Needless to say, the assessee be given an appropriate opportunity of hearing before passing the fresh order.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 30.01.2026.
Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 30th January, 2026 VBP
11 ITA.No.1844/Hyd./2025 Copy to: Ganga Rao Sunkara L/R of Sujatha Sunkara, 1. 1-7-109, IBP Petrol Pump [COCO YEDPALLY], Nizamabad – 503 202 Telangana. The Income Tax Officer, Ward-3, 6-2-156/3, Subhash 2. Nagar, Nizamabad – 503 002. Telangana. 3. The Pr. CIT, Hyderabad. 4. The DR, ITAT, “B” Bench, Hyderabad. 5. Guard file. BY ORDER //True copy//
