SRINIVAS REDDY SADDIPALLI,HYDERABAD vs. INCOME TAX OFFICER, WARD-4(3) , HYDERABAD

Facts of the case, in brief, are that the assessee is an individual, filed his return of income for the A.Y 2017-18 declaring total income of Rs.5,01,320/-. The case was selected for scrutiny to verify the cash deposits into bank account during demonetization period. During the course of assessement proceedings, the Assessing Officer noticed that the assessee has made cash deposits of Rs.24,57,000/- into SBI Amberpet Branch. The Assessing Officer called upon the assessee to furnish necessary evidences to prove the source for cash deposits. The assessee neither appeared nor filed any details. Therefore, the Assessing Officer passed the order u/s 144 of the I.T. Act on 29/11/2019 and made addition of Rs.24,57,000/- u/s 69A r.w.s. 115BBE of the I.T. Act. 1961.

Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT (A). Before the learned CIT (A) the assessee has filed certain additional evidences, including relevant bank statements and also details of transactions carried out with Me-Seva (Govt. to Citizen) services towards payment of utility bills. The learned CIT (A) forwarded the additional evidences filed by the assessee to the Assessing Officer for his comments/reports. The Assessing Officer did not furnish his remand report. Therefore, the learned CIT (A) rejected the additional evidences filed by the assessee in light of Rule 46A of the I.T. Rules, 1962 and sustained the addition made towards cash deposits u/s 69 r.w.s. 115BBE of the Act.

Aggrieved by the order of the learned CIT (A), the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee referring to the petition filed for admission of additional evidences submitted that the assessee has filed certain additional evidences including the details of transactions carried through ME-SEVA (Govt.Citizen) and also submitted relevant bank statement to prove that the assessee has received cash from general public for facilitating payment of various utility bills and the same has been deposited into the bank account. Therefore, he submitted that one more opportunity may be given to the assessee to go back to the Assessing Officer to explain his case with necessary evidences.

The learned DR, on the other hand, submitted that the assessee could not adduce any reasons for not filing these evidences before the Assessing Officer. Further, the assessee failed to reconcile the cash deposits with cash received from various people for providing the services. Therefore, she submitted that there is no reason to give any opportunity to the assessee and the order of the learned CIT (A) should be upheld.

I have heard both the parties, perused the material available on record and gone through the orders of the authorities below. The assessee claims that he is a franchise owner with APT Online Ltd which is a joint venture of State Govt. and TCS. He is running e-seva centre, collects amounts payable towards water bills, electricity bills, house/property taxes etc., from various persons on behalf of different departments etc. The assessee claims that he received cash from general public and facilitated online payment through various agencies against the bills. Further, the cash collected from citizens has been deposited into his bank account. The assessee has filed evidences like certificate from APT Online to prove he is providing various services, details of transactions with commission earned for the relevant period and also bank statements and claimed that these evidences were not filed before the Assessing Officer. We find the Assessing Officer has passed ex-parte assessment order in absence of necessary details. The assessee has now furnished various evidences and asked for one more opportunity before the Assessing Officer. Therefore, considering the totality of the facts and the nature of activities carried out by the assessee and also the additional evidences filed during the course of appellate proceedings, I am of the considered view that the issue needs to go back to the file of the Assessing Officer for further verification. Thus, I set aside the order of the learned CIT (A) and restore the issue back to the file of the Assessing Officer to reconsider the issue ‘denovo’ after considering the relevant additional evidences filed by the assessee to prove the source for cash deposits. Needless to say, the assessee shall furnish all evidences before the Assessing Officer and explain the source for cash deposits during demonetization period.

In the result, appeal filed by the assessee is allowed for statistical purposes.