INCOMETAX OFFICER, TANUKU V. VENKATA SURYA DURGA RAJU KOPPISETTI, THIMMARAJUPALEM

ITA 329/VIZ/2025

AI Insights

The case involves appeals by the Revenue against the orders of the Commissioner of Income-Tax (Appeals), which had deleted the additions made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, concerning unexplained cash deposits totaling Rs. 8,20,58,150. The assessee, Venkata Surya Durga Raju Koppisetty, had made substantial cash deposits in his bank accounts during the assessment year 2016-17 but did not file a return of income. The Assessing Officer initiated proceedings under Section 147 and made additions under Section 69A, which were later contested and deleted by the CIT(A). The Tribunal found that the CIT(A) had not provided adequate reasoning for his decision and thus remanded the matter back for a detailed and reasoned order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772577 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2016-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard
• Section: 147; 148; 144; 142(1); 271(1)(c)

Judgement Text

"आयकर अपीलीय अधिकरण, विशाखापटणम पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench श्री रिीश सूद, माननीय न्याययक सदस्य एिं श्री एस. बालक ृष्णन, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI BALAKRISHNAN. S, HON’BLE ACCOUNTANT MEMBER, आयकरअपीलसं./I.T.A.Nos.329 and 330/Viz/2025 (निर्धारण वर्ा/ Assessment Year: 2016-17) The Income Tax Officer, Tanuku. Vs. Venkata Surya Durga Raju Koppisetty, R/o.Nidadavolu, East Godavari District. PAN : DEPPK5744M (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) C.O. Nos.36 and 37/Viz/2025 in (In आयकरअपीलसं./I. .T.A.Nos.329 and 330/Viz/2025 (निर्धारण वर्ा/ Assessment Year: 2016-17) Venkata Surya Durga Raju Koppisetty, R/o.Nidadavolu, East Godavari District. PAN : DEPPK5744M Vs. The Income Tax Officer, Tanuku. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) Printed from counselvise.com 2 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti करदाता का प्रतततितित्व/ Assessee Represented by : Shri GVN Hari, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Shri MN Murthy Naik, CIT(DR) सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 20.08.2025 घोर्णध की तधरीख/Date of Pronouncement : 26.08.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The captioned appeals filed by the revenue are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 27.03.2025, which in turn arises from the order passed by the Assessing Officer (for short “A.O.”) u/s 147 r.w.s 144 of the Income Tax Act, 1961 (for short, “the Act”) dated 17.03.2022 AND u/s 271(1)(c) of the Act dated 28.09.2022 for A.Y. 2016-17. As common issues are involved in the captioned appeals, therefore, the same are taken up and disposed of by this consolidated order. Printed from counselvise.com 3 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 2. We shall first take up the appeal filed by the Revenue in ITA No. 329/Viz/2025. The Revenue has assailed the impugned order on the following grounds of appeal before us : “1. The order of the Ld CIT(A), National Faceless Assessment. Centre (NFAC) is erroneous both on facts and in law. 2 The Ld.CIT(A) failed to appreciate the fact that there is an information with the department that the Assessee has made cash deposits to the tune of Rs 820.58 Lacs in his bank accounts during the year under consideration. 3. The Ld.CIT(A) failed to appreciate the fact that the assessee has not made any submissions/explanation during the Assessment proceedings with regard to the total cash deposits of Rs.820.58 Lacs even after providing sufficient opportunities. 4. The Ld.CIT(A) failed to appreciate the fact that during the appellate proceedings the assessee accepted that he had deposited cash deposits to the tune of Rs 107.24 Lacs in the said bank accounts. However, the Ld.CIT(A) did not give any finding on this issue and merely deleted the addition misinterpreting the remand report submitted by the Assessing officer. 5. The Ld.CIT(A) erred in judging the remand report submitted by the Assessing Officer and in considering the comments of the Assessing Officer. It is pertinent to mention that the Assessing Officer in his remand report mentioned as: \"the submissions and information furnished by the assessee is correct and are found to be in order regarding providing of Assessment order and demand notice for A.Y.2016-17... The Ld.CIT(A) misinterpreted the intention of the Assessing Officer while taking the above remarks of the AO. The remand report only certifies that the information regarding assessment order and demand notice are found to be in order and not with regard to information submitted by the assessee in respect of cash deposits. 6. The Ld.CIT(A) failed to verify the evidences/sources with regard to cash deposits of Rs.713.34 Lacs (Rs.820.58 Rs.107.24) over and above the cash deposit of Rs.107.24 lacs accepted by the assessee but deleted the addition misinterpreted the remand report submitted by the Assessing Officer. Printed from counselvise.com 4 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 7 The Ld.CIT(A) failed to appreciate that the decision in the case of CIT- II vs Janasampark Advertising and Marketing Pvt. Ltd. [ITA No.525/2014] of Delhi High Court, wherein it was held that \"42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But the CIT(A) having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the addition made. In this case, Ld.CIT(A) failed to conduct proper inquiry but deleted the addition by wrongly interpreting the remand report of the AO. 8. The assessee craves leave to add or delete or amend or substitute any ground of appeal before and/or at the time of hearing of appeal. 9. For these and other grounds that may be urged at the time of appeal hearing, it is prayed that all these above additions be restored. On the other hand, the assessee has filed C.O.No.36/Viz/2025 raising the following grounds: “1. The learned Commissioner of Income-Tax (Appeals) is justified in delating. the addition of Rs.820.58 lacs made by the assessing officer towards alleged unexplained cash deposits in the bank accounts of the appellant. 2. The learned Commissioner of Income Tax (Appeals) is justified in appreciating the fact that during remand proceedings the Assessing officer did not bring on record any positive evidence to negate the submissions of the appellant that the actual deposits were only Rs.107.24 lacs but not Rs.820.58 lacs. 3. Any other grounds of Cross-Objection that may the raised at the time of hearing. 3. Succinctly stated, the A.O., based on information that though the assessee during the subject year had made cash deposits of Rs. 8,20,58,150/- in his bank account but had not filed his return of income for the year under consideration, initiated proceedings Printed from counselvise.com 5 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti under Section 147 of the Act. Notice under Section 148 of the Act dated 27.03.2021 was issued to the assessee. 4. As the assessee failed to respond to the notices issued by the A.O. under Section 142(1) of the Act, therefore, he proceeded to frame the assessment to the best of his judgment under Section 144 of the Act. 5. During the course of assessment proceedings, the A.O. observed that the assessee during the subject year had made cash deposits of Rs. 8,20,58,150/- in his three bank accounts as under : Printed from counselvise.com 6 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti As the assessee had failed to come forth with any explanation regarding the source of the subject cash deposits, therefore, the A.O. while framing the assessment passed under Section 147 r.w.s 144B of the Act dated 17.07.2022, held the entire amount of Rs. 8,20,58,150/- as unexplained income of the assessee under Section 69A of the Act. 6. Aggrieved, the assessee carried the matter in appeal before the CIT(A). 7. The assessee in the course of proceedings before the CIT(A) had submitted that the initiation of proceedings by the A.O. under Section 147 of the Act was based on wrong and incorrect facts. Elaborating on his contention, it was submitted by the assessee that he had, during the subject year, made total deposits of Rs. 107.24 lacs in his bank/loan accounts viz. (i) Andhra Bank: Rs. 53.70 lacs; (ii) Union Bank: Rs. 12.33 lacs, and Corporation Bank: Rs. 41.21 lacs. Elaborating further, it was submitted by the assessee that the A.O. had wrongly observed while framing the assessment that the assessee had made total deposits of Rs. 8,20,58,150/-, which comprised of viz., (i) Deposits in a Bank Printed from counselvise.com 7 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti (without mentioning the name of the Bank) at KH N1 Gali No.4, Main Road, Wazirabad, North – 110084: Rs.40,80,370/- and (ii) Corporation Bank: Rs. 713,74,000/-. It was the claim of the assessee that, as the very basis for assumption of jurisdiction by the A.O. for initiating proceedings under Section 147 of the Act was based on wrong and incorrect facts, therefore, in absence of valid assumption of jurisdiction, the consequential assessment framed by the A.O. u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 17.03.2022, could not be sustained and was liable to be quashed. 8. Apart from that, it was the claim of the assessee that as he had not made any cash deposits of Rs. 820.58 lacs as observed by the A.O., therefore, the addition so made by him based on misconceived and incorrect facts could not be sustained and was liable to be quashed. 9. The CIT(A), based on the aforesaid contentions of the assessee, called for a remand report from the A.O. In compliance, the A.O. filed his remand report, which we deem it apposite to cull out as under : Printed from counselvise.com 8 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti Printed from counselvise.com 9 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti Printed from counselvise.com 10 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 10. The CIT(A) made a copy of the remand report available to the assessee for his comments. Once again, the assessee reported that he had, during the subject year, only made deposits of Rs. 107.24 lacs in his bank account. It was the assessee's claim that the addition of Rs. 820.58 lacs (supra) made by the A.O. based on incorrect facts, could not be sustained and was liable to be struck down. The assessee further contended that as the A.O. had based on incorrect facts assumed jurisdiction and reopened his case, therefore, the consequential assessment so framed by him could not be sustained and was liable to be vacated. Printed from counselvise.com 11 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 11. We find that the CIT(A), after deliberating upon the written submissions filed by the assessee and the remand report/ rejoinder of the assessee, vacated the entire addition of Rs. 820.58 lacs by observing as under : Printed from counselvise.com 12 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti Printed from counselvise.com 13 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 12. On a perusal of the findings and observations of the CIT(A), we find that the A.O. in his remand report dated 09.02.2024, had inter alia dealt with the claim of the assessee that he had filed with the A.O. a requisition for obtaining the copy of the assessment order and demand notice for A.Y. 2016-17. The A.O. in the context of the aforesaid issue, had observed that based on the request of the assessee vide letter dated 01.11.2022, a letter vide DIN & Letter No.ITBA/COM/F/17/2022-23/1046694808(1) dated 02.11.2022 enclosing a copy of the assessment order u/s 147 r.w.s. 144 r.w.w. 144B of the Act and a demand notice under Section 156 of the Act dated 17.03.2022, passed by NFAC, Income Tax Department, Delhi, for A.Y. 2016-17 was provided to the assessee. Elaborating further, it was in the context of the aforesaid facts regarding making available a copy of the Printed from counselvise.com 14 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti assessment order and demand notice that the A.O. had observed that the claim of the assessee regarding providing of assessment order and demand notice for A.Y. 2016-17 was found to be in order. 13. We find that the CIT(A) misdirected himself regarding the aforesaid observations of the A.O. vide his two-liner observation, concluded that considering the remand report of the A.O., the impugned addition of Rs. 8,20,58,150/- is directed to be deleted. We have perused the observations of the CIT(A) and are unable to comprehend as to on what basis and reasoning the addition of Rs. 8,20,58,150/- (supra) had been vacated by him. We are seriously taken aback with the manner in which the CIT(A), without giving any cogent reason or observation, has vacated the addition made by the A.O. Once again, we may herein observe that there is no whisper in the CIT(A) order regarding the reason for deleting the addition made by the A.O. under Section 69A of the Act. As observed hereinabove, the observation of the CIT(A) that the A.O. had accepted the claim of the assessee and found the same to be correct is factually incorrect. We will mince no words in observing that the addition made by the A.O. under Section 69A of the Act, Printed from counselvise.com 15 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti amounting to Rs. 8,20,58,150/- has been vacated by the CIT(A) based on an absolutely non-speaking order, which by no means imagination can be endorsed and sustained on our part. 14. We thus, in terms of our aforesaid observations, set aside the matter to the file of the CIT(A) with a direction to re-decide the appeal based on a speaking and reasoned order. Needless to say, the CIT(A) shall, in the course of the set-aside proceedings, afford a reasonable opportunity of being heard to the assessee. 15. Before parting, we herein deprecate the manner in which the present appeal had been disposed of by the CIT(A) based on a non- speaking order which is devoid and bereft of any reasoning, which, thus has resulted to multiplicity of litigation that could have been avoided had there been a speaking and a reasoned order. 16. Resultantly, the appeal filed by the Revenue is allowed for statistical purposes. 17. We shall now deal with C.O.36/Viz/2025 filed by the assessee. Printed from counselvise.com 16 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 18. As the objections raised by the assessee in his aforesaid cross-objection are subsumed in our aforesaid observations, based on which the matter has been restored to the file of the CIT(A) for a fresh adjudication, therefore, we do not deem it necessary to independently deal with the same, and the same are disposed of on the same terms. 19. Resultantly, the C.O. No.36/Viz/2025 filed by the assessee is allowed for statistical purposes. ITA No.330/Viz/2025 and C.O.No.37/Viz/2025 20. First, we will take of the appeal of Revenue in ITA No.330/Viz/2025. 21. The Revenue has assailed the order passed by the CIT(A), NFAC, Delhi dated 27.03.2025, wherein he has vacated the penalty imposed by the A.O. under Section 271(1)(c) of the Act dated 28.09.2022. The Revenue has assailed the impugned order on the following grounds of appeal before us : Printed from counselvise.com 17 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti “1. The order of the Ld.CIT(A), National Faceless Assessment Centre (NFAC) is erroneous both on facts and in law. The order of the Ld.CIT(A), National Faceless Assessment Centre 2. The Ld.CITIA) failed to appreciate the fact that there is an information with the department that the Assessee has made cash deposits to the tune of Rs.820.58 Lakhs in his bank accounts during the year under consideration. 3. The Ld.CIT(A) failed to appreciate the fact that the assessee has not made any submissions/explanation during the Assessment proceedings with regard to the total cash deposits of Rs.820.58 Lakhs even after providing with sufficient opportunities before the Assessing Officer. 4. The Ld.CIT(A) erred in passing the order by merely mentioning that the addition made by the AO in quantum proceedings has been deleted and failed in verifying the facts of the case during the penalty proceedings. 5. The Ld.CIT(A) failed to notice that the quantum addition in this case was deleted by the Ld.CIT(A) by misinterpreting the remand report of the Assessing Officer. б. The Ld.CIT(A) erred in deleting the penalty levied u/s 271(1)(c) solely on the ground that the quantum addition has been decided against the department, without appreciating the fact that the department has challenged the quantum order before the Hon'ble ITAT. 7. The assessee craves leave to add or delete or amend or substitute any ground of appeal before and/or at the time of hearing of appeal. 8. For these and other grounds that may be urged at the time of appeal hearing, it is prayed that all these above additions be restored.” On the other hand, the assessee has filed C.O.No.37/Viz/2025 raising the following grounds: “1. The learned Commissioner of Income-Tax (Appeals) is justified in cancelling the penalty of Rs.2,83,98,684 levied by the Assessing officer u/s 271(1)(c) of the Act. 2. Any other grounds of Cross-Objection that may the raised at the time of hearing.” Printed from counselvise.com 18 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 22. The CIT(A) had quashed the penalty imposed by the A.O. under Section 271(1)(c) of the Act for the reason that the quantum addition of Rs. 8,20,58,150/- (supra) made by the A.O. while framing the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 17.03.2022, had been vacated by him. 23. As we have set aside the order passed by the CIT(A) vacating the addition of Rs. 8,20,58,150/- (supra) made by the A.O. under Section 69A of the Act, and restored the matter to the file of the CIT(A) for fresh adjudication, therefore, on the same terms, the order vacating the penalty under Section 271(1)(c) of the Act is also set aside to his file. The CIT(A) is directed to dispose of the appeal filed by the assessee against the order passed by the A.O. under Section 271(1)(c) of the Act dated 28.09.2022 after dispensing the quantum appeal which has been restored to his file. 24. Resultantly, the appeal filed by the Revenue is allowed for statistical purposes in terms of our aforesaid observations. 25. We shall now deal with C.O.37/Viz/2025 filed by the assessee. Printed from counselvise.com 19 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti 26. As the C.O. is merely supportive, therefore, our observations recorded while disposing of the appeal filed by the Revenue in ITA No. 330/Viz/2025, arising from the order passed by the CIT(A) vacating the penalty imposed by the A.O. under Section 271(1)(c) of the Act, shall apply mutatis mutandis for disposing of the present Cross-Objection. 27. Resultantly, the C.O.No.37/Viz/2025 filed by the assessee is allowed for statistical purposes. 28. To sum up, both the appeals filed by the Revenue and the Cross-Objections filed by the assessee are allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the Open Court on 26th August, 2025. Sd/- (एस. बालक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (रिीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Hyderabad, dated 26.08.2025. TYNM/sps Printed from counselvise.com 20 ITA Nos.329 and 330/Viz/2025 & C.O.36 and 37/Viz/2025 Venkata Surya Durga Raju Koppisetti आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Venkata Surya Durga Raju Koppisetty, D.No.2-25-19, Bapuji Nagar, Thimmarajupalem, Nidadavole Mandal, East Godavari District – 534301. 2. रधजस्व/ The Revenue : The Income Tax Officer, Tanuku. 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण / DR, ITAT, Visakhapatnam 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam Printed from counselvise.com "