PUDIPEDDI VENKATA NAGAMANI,VISAKHAPATNAM vs. THE INCOME TAX OFFICER, WARD-2(1), VISAKHAPATNAM

1. This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No. ITBA/NFAC/S/250/2023-24/1061159448(1) dated 19.02.2024, arising out of order passed u/s 144 of the Income Tax Act, 1961 (in short ‘Act’) dated 18.12.2019 for the Assessment Year (A.Y.) 2017-18.

Brief facts of the case are that the assessee has deposited a sum of Rs.11,49,000/- by way of cash, during the demonetization period 09.11.2016 to 31.12.2016 in the F.Y. 2016-17 in the Bank accounts maintained with various banks. As per the records, the assessee had not filed return of income for the Assessment Year 2017-18 either u/s 139(1) or u/s 139(4) of the I.T. Act 1961. The Assessing Officer (AO) vide letter dt.22.04.2019 called for details of the assessee as per KYC norms, statement of bank account held in the name of assessee during the financial year 2016-17 and details of other accounts held by the assessee from the Axis Bank, Thiruvanmiyur Branch, Chennai, Canara Bank, Visakhapatanam and Yes Bank, Adyar, Chennai under the provisions of Section 133(6) of the Act. In response, statement of bank account for account no. 910010004268760 relating to the period between 01.04.2016 and 31.03.2017 held by the assessee with the Axis Bank, Thiruvanmiyur Branch, Chennai, and for account no. 5661101001376 for the period from 01.04.2016 to 31.03.2017 from Canara Bank, were received from the Bank authorities. Summon u/s 131 of the I.T. Act was also issued to the Bank Manager, Canara Bank, Vishakapattanam on 10.12.2019 to obtain the statement and the same was received. The AO has tabulated cash deposits of Rs. 12,81,726/- in the bank accounts of the Pudipeddi Venkata Nagamani, Visakhapatnam assessee. The AO observed that despite repeated opportunities given for being heard, the assessee neither filed any return of income nor furnished any documents being called for. The AO thus held that assessee failed to satisfactorily explain the source and nature of all cash deposits and other credits appearing in the Bank account to the tune of Rs. 12,81,726/- for the FY 2016-17, relevant to Assessment Year 2017- 18. Therefore, the AO treated the credits, including cash deposits appearing the bank accounts, of Rs. 12,81,726/- as unexplained investment u/s 69 of the Income Tax Act 1961.

On being aggrieved, the assessee preferred appeal before the CIT(A) and the Ld.CIT(A) sustained the addition made by the AO and dismissed the appeal of the assessee ex-parte.

On being aggrieved, the assessee preferred appeal before the Tribunal, by raising the following grounds of appeal :

The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.

The only contention of the Ld.AR is that the AO is not justified in making addition of Rs.12,81,726/- made u/s 69A of the Act towards unexplained cash deposits during demonetisation period and subjecting the same to tax u/s 115BBE of the Act and the Ld.CIT(A) is not justified in sustaining the addition made by the AO and dismissing the appeal of the assessee ex-parte without giving proper opportunity of being heard to the assessee. He, therefore, pleaded to afford an opportunity of being heard before the CIT(A) in the interest of justice to substantiate her case with cogent material evidences, otherwise, the assessee would suffer irreparable financial loss.

Per contra, the Ld.DR argued that the assessee was given sufficient opportunities before the revenue authorities, but the assessee failed to avail the same. She, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.

I have heard both the parties and perused the material available on record. In the instant case, assessee had deposited a sum of Rs.11,49,000/- by way of cash, during the demonetization period

In the result, appeal of the assessee is allowed for statistical purpose.