INAPARTHI RAJU,KOYYALAGUDEM MANDALAM V. INCOME TAX OFFICER, WARD-2, ELURU

ITA 75/VIZ/2024

AI Insights

The case involves Raju Inaparthi, an individual engaged in agricultural activities, who did not file his income tax return for the Assessment Year 2017-18. The Income Tax Department noticed a deposit of Rs. 10,02,000 in his bank account during the demonetization period and subsequently issued notices under sections 142(1) and 133(6) of the Income Tax Act, 1961. The AO treated the belated return as invalid and assessed Rs. 10,00,000 as unexplained cash credits under section 69 read with section 115BBE of the Act. The assessee's appeal to the CIT(A) was dismissed, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46559 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 144; 69; 133(6); 69A

Judgement Text

"आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM (HYBRID HEARING) श्री क े.नरधिम्हा चारी, न्याधयक िदस्य एिं श्री एि बालाक ृष्णन, लेखा िदस्य क े िमक्ष BEFORE SHRI K. NARASIMHA CHARY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपीलसं./I.T.A.No.75/VIZ/2024 (निर्धारणवर्ा/ Assessment Year: 2017-18) Raju Inaparthi D.No. 7-66/1, Koyyalagudem (M.D) Dippakayalapadu, West Godavari Andhra Pradesh - 534312 [PAN: AYOPA6854A] v. Income Tax officer – Ward – 2 Eluru, Andhra Pradesh (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व / Assessee Represented by : Shri KVRK Sharma राजस्व का प्रतततितित्व/ Department Represented by : Dr. Aparna Villuri, Sr.AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 11.02.2025 घोर्णध की तधरीख / Date of Pronouncement : 07.03.2025 आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER: 1. This appeal is Filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order I.T.A.No.75/VIZ/2024 Raju Inaparthi Page No. 2 No.ITBA/NFAC/S/250/2023-24/1059202552(1) dated 29.12.2023 for the A.Y.2017-18 arising out of the order passed under section 144 of the Income Tax Act, 1961 (in short „Act‟) dated 20.12.2019. 2. Brief facts of the case are that, assessee being an individual engaged in the business of agricultural activities, did not filed his return of income for the A.Y. 2017-18. Based on the information available with the department it was noticed that the assessee has deposited a sum of Rs.10,02,000/- in his bank account during the demonetization period. Thereafter, notice under section 142(1) of the Act was issued on 21.03.2018 and served on the assessee on 28.03.2018 requesting the assessee to file the return of income for the A.Y.2017-18. In response, assessee submitted that the cash deposits were out of the sale proceeds of agricultural land and accumulated savings from agricultural activity and milk vending over the years. Subsequently, on 31.07.2019 assessee filed his return of income for the A.Y. 2017-18 admitting a total income of Rs.2,98,400/-. Since the return of income was filed belatedly the Ld. Assessing Officer [hereinafter in short “Ld. AO\"] treated it as invalid return which is ought to have been filed on or before 31.03.2018. Meanwhile, Ld. AO issued a letter under section 133(6) of the Act to the respective banks and sought for details of cash deposits. Subsequently, issued a show-cause notice dated 23.09.2019 requesting the assessee to explain the source for cash deposits. In response assessee has filed reply on 24.10.2019. Considering the submissions made by I.T.A.No.75/VIZ/2024 Raju Inaparthi Page No. 3 the assessee, Ld. AO concluded that no proper evidences was produced by the assessee and hence assessed Rs. 10,00,000/- as unexplained cash credits under section 69 r.w.s. 115BBE of the Act. 3. Aggrieved by the order of the Ld. AO, assessee filed an appeal before the Ld. CIT(A). Before Ld. CIT(A), Authorized representative of the assessee contended that assessment order was passed exparte under section 144 of the Act and assessee also made similar submissions before Ld. CIT(A). Considering the submissions, Ld. CIT(A) did not accept the contentions of the assessee, thereby dismissed the appeal filed by the assessee. 4. Aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal : - “1. The order of the learned Commissioner of Income tax (Appeals) is not correct and not justified both in law and in the facts and circumstances of the case. 2. The learned Commissioner of Income tax (Appeals) erred in confirming the action of the assessing officer in bringing to tax Rs.10,00,000/- as unexplained cash credit u/s 69A of the IT Act. 3. The learned Commissioner of Income tax (Appeals) failed to appreciate the fact that the ex parte order passed under section 144 of the Act is in violation of the provisions of section 129 and 144A of the Income tax Act and is against the principles of natural justice. 4. The learned Commissioner of Income tax (Appeals) erred in observing that the appellant has failed to provide any documentary evidence in support of cash deposits in the course of assessment as well as appeal proceedings. 5. The learned Commissioner of Income tax (Appeals) failed to appreciate the fact that the appellant had furnished the details of land holdings, year wise details of sale proceeds of tobacco, proof of sale of I.T.A.No.75/VIZ/2024 Raju Inaparthi Page No. 4 land etc., during the course of assessment proceedings explaining the sources of cash deposits made during the demonetisation period. 6. Any other ground or grounds that may be urged at the time of appeal hearing.” 5. Ground Nos. 1 & 6 are general in nature and needs no adjudication. 6. Ground No. 2 is related to the addition of Rs. 10,00,000/- as unexplained cash deposits. On this issue, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that assessee has filed appropriate evidences before the Ld.AO which was not considered by the Ld. AO who has passed the exparte order under section 144 of the Act. He therefore pleaded that one more opportunity may be provided to the assessee to submit the documentary evidences before Ld. AO and requested for remitting the matter back to the file of the Ld. AO. 7. Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] relied on the orders of the Revenue Authorities. 8. We have heard both the sides and perused the material available on record. On a careful perusal of the assessment order, it is noticed that the assessee has submitted reply on 24.10.2019 but has failed to produce any documentary evidences regarding the cash deposits made during the demonetization period. Ld. AO therefore proceeded to frame the assessment under section 144 of the Act. Considering the plea of the Ld.AR that one more I.T.A.No.75/VIZ/2024 Raju Inaparthi Page No. 5 opportunity may be provided to the assessee to substantiate the cash deposits made during the demonetization period, we are inclined to remit the matter back to the file of Ld. AO by following principles of natural justice and direct the Ld.AO to examine the evidences produced by the assessee and decide the matter in accordance with law on merits. At the same time, we also direct the assessee to produce the related documentary evidences before the Ld. AO without seeking unnecessary adjournments. Ground No.2 raised by the assessee is allowed for statistical purposes. 9. Since the issue of addition of Rs.10,00,000/- being remitted back to the file of the Ld. AO, other grounds raised by the assessee are not adjudicated. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 07th March, 2025. Sd/- (क े.नरधिम्हाचारी) (K.NARASIMHA CHARY) न्याधयक िदस्य/JUDICIAL MEMBER Sd/- (एि बालाक ृष्णन) (S. BALAKRISHNAN) लेखा िदस्य/ACCOUNTANT MEMBER Dated: 07.03.2025 Giridhar, Sr.PS I.T.A.No.75/VIZ/2024 Raju Inaparthi Page No. 6 आदेश की प्रनतनलनपअग्रेनर्त/ Copy of the order forwarded to :- 1. निर्धाऩरती/ The Assessee : Raju Inaparthi D.No. 7-66/1, Koyyalagudem (M.D) Dippakayalapadu, West Godavari Andhra Pradesh – 534312 2. रधजस्व/ The Revenue : Income Tax officer – Ward – 2 Eluru, Andhra Pradesh 3. The Principal Commissioner of Income Tax 4. नवभधगीयप्रनतनिनर्, आयकरअपीलीयअनर्करण, नवशधखधपटणम /DR,ITAT, Visakhapatnam 5. The Commissioner of Income Tax 6. गधर्ाफ़धईल / Guard file //True Copy// आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "