AVINASH GUPTAS GODAVARTHI,HYDERABAD vs. INCOME TAX OFFICER, WARD 2(1), VIJAYAWADA
Facts
The assessee filed an appeal against an order that made additions to income, including 15% of turnover as estimated profit and unexplained bank credits under Section 69A. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) had confirmed these additions.
Held
The Tribunal held that the CIT(A) erred by dismissing the appeal for non-prosecution without adjudicating on the merits of the grounds raised. The CIT(A) should have considered the affidavit filed by the assessee and potentially called for a remand report.
Key Issues
Whether the CIT(A) properly adjudicated the appeal on merits, or if dismissing it for non-prosecution was appropriate; and whether the additions made by the AO were justified.
Sections Cited
250, 143(3), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI VIJAY PAL RAO, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE
आदेश /O R D E R
PER OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER:
The present appeal is filed by the assessee against the impugned order dated 29.06.2025 passed under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) by the Learned Commissioner of Income Tax (Appeals), National
I.T.A. No. 754/VIZ/2025 Avinash Guptas Godavarthi
Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] for the A.Y.2017-18.
In the above cited appeal, the appellant was aggrieved with the following additions made by the Learned Assessing Officer (“Ld. AO") while completing the assessment under section 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) and confirmed by the order of the Ld.CIT(A).
a. The Ld. AO and Ld. CIT(A) have erred in adopting a flat rate of 15% of total turnover of Rs.2.38 Crores and making a separate addition of the other bank credits of Rs. 77.78 Lakhs.
b. The Ld. CIT(A) erred in upholding the addition of Rs.2.62 Crores as unexplained money under section 69A of the Act.
c. Proper opportunity was not given by the revenue to adduce evidence.
From the assessment order, it is observed that six opportunities were given to the appellant to explain about the source of cash deposits into his bank account and estimating the business profit @15% of turnover instead of 3% admitted by the appellant. The Ld. AO got a reply from appellant stating that the cash deposits relate to a concern, M/s. Mangalam Enterprises Private Limited in which he is a Director and these amounts are reflected in that company. Accordingly, the appellant filed an affidavit before the Ld. AO in which it was also stated that the assessment proceedings of M/s. Mangalam Enterprises Private Limited are
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pending still. Not satisfied with the reply of the appellant, the Ld. AO completed the assessment by holding that the appellant has not produced books of accounts nor information was submitted in support of the explanation and added the amounts as mentioned in the show cause notice.
Aggrieved by the order of the Ld. AO, an appeal was filed by appellant, before the Ld. CIT(A) stating that the additions made by the Ld. AO are not correct and liable to be deleted. The Ld. CIT(A) gave 10 notices to explain his case and produce related documentary evidence and there was no response to any of these notices. In view of the same, the appeal of appellant was dismissed.
Then, the appellant filed an appeal before ITAT with the grounds of appeal mentioned in Para no. 2 of this Order. On the day of posting the case for hearing i.e., 28.01.2026, none was present nor there is any letter of adjournment, even though the notice of hearing was sent by this Office. In fact, the cover containing the notice of hearing has come back to the ITAT with a postal remark “Left without instructions returned to sender”, which implies that the appellant was not available in the address given by him. As there is no response from the appellant, the Bench decided to dispose of the appeal based on the material available on record.
The Ld. Departmental Representative (“Ld. DR”) relied on the orders of the Ld. AO and the Ld. CIT(A) and stated that the additions were correctly made
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by the Ld. AO and sustained by the Ld. CIT(A) because there is no response from the assessee nor there is any cooperation with respect to filing of the replies to the queries raised by the lower authorities.
Heard both sides. After perusal of the Assessment Order, Ld.CIT(A) order and the Grounds of appeal, the Bench decided to remit all the issues to the file of Ld. CIT(A), viz., estimation of Profit in the business, additions made under section 69A of the Act relating to unexplained money, estimation of profit on other credits in the bank, for fresh adjudication after giving an opportunity to the appellant due to the following reasons:
a. The Ld. CIT(A) has given ample opportunities and dismissed the appeal of appellant, no doubt, but there is no adjudication on the merits and grounds of appeal raised by appellant. As held by Hon'ble Bombay High Court in the case of Premkumar Arjundas (HUF) [69 taxman.com 407 (BOM)], Ld.CIT(A) cannot dismiss the appeal for non-prosecution of appeal, but he has to adjudicate all the issues raised by appellant.
b. Ld. CIT(A) should have considered the outcome of assessment order of M/s. Mangalam Enterprises Private limited, as the appellant has filed an affidavit that the cash belongs to that
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company and the income was already offered in that company and he is a Director of that company.
c. If required, the Ld. CIT(A) may call for a remand report from Ld.AO.
d. Since several opportunities were already given by Ld. AO / Ld.CIT(A), the appellant is directed to co-operate with Ld.CIT(A) and submit all the details required by the First Appellate Authority.
In the result, appeal of the appellant is allowed for statistical purposes.
Order pronounced in the open court on 30th January, 2026.
Sd/- Sd/- (ओंकारेश्वर धिदारा) (धिजय पाल राि) (OMKARESHWAR CHIDARA) (VIJAY PAL RAO) लेखा सदस्य /ACCOUNTANT MEMBER उपाध्यक्ष /VICE PRESIDENT Dated:30.01.2026 Giridhar, Sr.PS
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आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee : Avinash Guptas Godavarthi 503 Zeenath Residency, Srinagar Colony Hyderabad – 500073 2. रधजस्व / The Revenue : Income Tax Officer – Ward – 2(1) C.R. Building (Central Revenue Building) M.G. Road (Bandar Road), Patamata Vijayawada – 520002, Andhra Pradesh 3. The Principal Commissioner of Income Tax नवभधगीय प्रनतनिनर्, आयकर अपीलीय अनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 4. 5. The Commissioner of Income Tax 6. गधर्ा फ़धईल / Guard file //True Copy// आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam
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