JOLIREDDY ASWARTHU,ANANTAPUR V. ACIT., CIRCLE-1, ANANTAPUR

ITA 699/HYD/2025

AI Insights

The case involves an appeal by Jolireddy Aswarthu against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi, for the Assessment Year 2017-18. The primary contention was that both the AO and the CIT(A) passed ex-parte orders without proper consideration of the merits. The AO had made double additions by estimating income on contracts and sub-contracts, along with additional assessments on commission, bank interest, and maintenance income, despite the assessee maintaining proper books of accounts. The Tribunal found the CIT(A)'s dismissal of the appeal for non-prosecution to be procedurally incorrect and remanded the case for a thorough re-examination of the assessee's financial records and proper opportunity of hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714655 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURPREET SINGH
• Assessee Lawyers: S. SANDHYA
• Keywords: Set aside; Rejection of books of accounts

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice President and Shri Manjunatha G., Accountant Member आ.अपी.सं /ITA No.699/Hyd/2025 (निर्धारण वर्ा/Assessment Year: 2017-18) Jolireddy Aswarthu Anantapur PAN : AEBPJ3722K Vs. ACIT Circle-1 Anantapur (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Smt.S.Sandhya, AR रधजस् व द्वधरध/Revenue by: Shri Gurpreet Singh, DR सुिवधई की तधरीख/Date of Hearing: 30/07/2025 घोर्णध की तधरीख/ Date of Pronouncement: 06/08/2025 आदेश / ORDER PER VIJAY PAL RAO, VICE PRESIDENT: This appeal filed by the assessee is directed against the order dated 25.02.2025 of the Commissioner of Income Tax (Appeals) [“Ld.CIT(A)”], National Faceless Appeal Centre, Delhi for the A.Y.2017-18. Printed from counselvise.com 2 ITA No.699/Hyd/2025 Jolireddy Aswarthu 2. The assessee has raised the following grounds of appeal: Printed from counselvise.com 3 ITA No.699/Hyd/2025 Jolireddy Aswarthu 3. At the time of hearing, the learned AR of the assessee has submitted that the AO as well as the Ld.CIT(A) has passed ex- parte orders. She has specifically pointed out that the Ld.CIT(A) has not decided the appeal of the assessee on merits and the same was dismissed in-limine for non-prosecution and therefore, the impugned order of the Ld.CIT(A) is not sustainable and liable to be set aside. The Ld.AR has further pointed out that the AO has made double additions by estimating income @8% on the main contract and @5% on the sub-contract work and thereafter, also made the additions on account of commission, bank interest, maintenance income etc. Thus, the order of the AO is highly arbitrary, unjustified when the assessee is maintaining proper books of accounts and declared the income, based on the books of accounts. Estimation of income on the part of the AO is invalid, when there was no rejection of books of accounts of the assessee. 4. On the other hand, the Ld.DR has fairly submitted that both the AO as well as the Ld.CIT(A) passed the orders ex-parte and therefore, the matter may be remanded to the record of the Printed from counselvise.com 4 ITA No.699/Hyd/2025 Jolireddy Aswarthu AO for verification and examination of the relevant record to be produced by the assessee. 5. We have considered the rival submissions as well as perused the orders of the authorities below. The Ld.CIT(A) has dismissed the appeal of the assessee in-limine for non- prosecution. Therefore, the impugned order passed by the Ld.CIT(A) is not in conformity with the provisions of 250(6) of the Income Tax Act, 1961 (“the Act”). Accordingly, the same is set aside. We further note that the AO has also made the addition on account of estimation of income of the assessee, which is also arbitrary in nature, as the AO has presumed that the assessee is not maintaining any books of accounts. The assessee has filed financial statements in the paper book, which includes, Trading, Profit & Loss account and Balance Sheet along with the Schedules to the Profit & Loss account and Schedule of fixed assets. The assessee has also filed tax audit report in Form No.3CB. Therefore, once the assessee is maintaining books of accounts, which are also audited as per the provisions of Income Tax Act, then the estimation of income by the AO on the presumption that the assessee is not maintaining the books of accounts is contrary to the facts on record. Hence, the matter is remanded to the record of the AO for fresh adjudication after proper verification and examination of the relevant record, including the books of accounts of the assessee as well as giving proper opportunity of hearing to the assessee. Printed from counselvise.com 5 ITA No.699/Hyd/2025 Jolireddy Aswarthu 6. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the Open Court on 6th August, 2025. Sd/- Sd/- (MANJUNATHA G.) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE PRESIDENT Hyderabad, Dated 6th August, 2025 L.Rama, SPS Copy to: S.No Addresses 1 Shri Jolireddy Aswarthu, 13-3-251, Sreenivasa Nagar, New Town, Ananthapuram 2 The ACIT, Circle-1, Anantapur 4 The Pr.Commissioner of Income Tax, Kurnool 4 The DR, ITAT, Hyderabad Benches 5 Guard File TRUE COPY SENIOR PRIVATE SECRETARY ITAT, HYDERABAD Printed from counselvise.com "