MADHAVI BEERAVOLU,HYDERABAD V. INCOME TAX OFFICER, WARD-8(1), SIGNATURE TOWERS

ITA 1154/HYD/2025

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The case involves Madhavi Beeravolu, the appellant, who did not file her income tax return for the assessment year 2018-19. The Income Tax Officer, based on specific information flagged by the CBDT, believed that income had escaped assessment and issued a notice under section 148A(b) of the Income Tax Act. After no response from the assessee, a best judgment assessment was made, adding income from capital gains and unexplained cash deposits. The assessee's appeal to the CIT(A) was dismissed due to a 177-day delay, attributed to her father's health issues and eventual death. The Tribunal found that the CIT(A) had not adequately considered the reasons for the delay and the merits of the case, leading to the decision to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785720 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2018-2019
• Appeal Filed On: 13-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Capital Gains; Reason to believe

Judgement Text

" आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘ए’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.1154/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2018-19) Madhavi Beeravolu, R/o.Puppalaguda Village, Rajendra Nagar Mandal, Ranga Reddy District. PAN : BACPB5104M Vs. The Income Tax Officer, Ward – 8(1) Hyderabad. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri Veera Venkata Satya Shiva Ryali, C.A. राजस्व का प्रतततितित्व/ Department Represented by : Shri Gurpreet Singh, Sr.A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 16.10.2025 घोर्णध की तधरीख/ Date of Pronouncement : 29.10.2025 O R D E R PER MANJUNATHA G., A.M : This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Printed from counselvise.com 2 ITA No.1154/Hyd/2025 Madhavi Beeravolu Faceless Appeal Centre [in short “NFAC”], Delhi, dated 16.05.2025 relating to the assessment year 2018-19. 2. The brief facts of the case are that, the assessee is an individual and had not filed his return of income for the assessment year 2018-2019 as per the provisions of sec.139(1) of the Income Tax Act [in short “the Act”] 1961. In case of the assessee, specific information was flagged as per Risk Management Strategy formulated by the CBDT through ITBA software under the head 'NMS cases' on account of sale of immovable property amounting to Rs.83,00,000/- and cash deposits in DCB Bank Ltd., amounting to Rs.12,16,070/-. Since the assessee did not file his return of income and on account of the above transactions, the Assessing Officer has reason to believe that income chargeable to tax has been escaped assessment. Therefore, the Assessing Officer issued notice u/sec.148A(b) of the Act on 22.03.2022 and served on the assessee with a request to file her submissions along with necessary documentary evidences in support of her claim. Since, there were no response from the assessee, the Assessing Officer was constrained to proceed with the proceedings as per the provisions of sec.148(d) of the Act on Printed from counselvise.com 3 ITA No.1154/Hyd/2025 Madhavi Beeravolu the basis of the information/documents available on record. Further, the Assessing Officer also issued statutory notices u/sec.142(1) dated 10.01.2023 and 36.05.2023. In absence of any response from the assessee, the Assessing Officer passed his best Judgment assessment order u/sec.147 r.w.s.144 r.w.s.114B of the Income Tax Act, 1961 vide order dated 06.03.2024 by determining the total income of the assessee at Rs.1,00,91,053/- by making additions on account of capital gains arising out of sale of immovable property amounting to Rs.83 lakhs and cash deposited into DCB Bank Limited amounting to Rs.12,16,070/- u/sec.69A of the Act. 3. Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A) with a delay of 177 days. Before the learned CIT(A), the assessee submitted that due to serious health issues, her father was hospitalized and, therefore, she could not take immediate steps in filing the appeal and also produced the death certificate of her father. However, the learned CIT(A) dismissed the appeal of the assessee on account of delay by following various judicial precedents. Printed from counselvise.com 4 ITA No.1154/Hyd/2025 Madhavi Beeravolu 4. Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal. 5. CA, veeravenkata Satya Shiva Ryali, Learned Counsel for the Assessee submitted that, during the course of assessment proceedings, the Assessing Officer without considering the capital gains accrued on account of sale of immovable property made the impugned addition of Rs.83 lakhs in the hands of the assessee. Further, the Assessing Officer has made addition on account of cash deposits of Rs.12,16,070/- without appreciating the fact that, the cash deposits were made by the assessee out of the previous withdrawals and amounts received from the relatives of the assessee. During the course of appellate proceedings before the learned CIT(A), the assessee has contended that, she had incurred improvement cost of Rs.36,55,000/- and, therefore, she is entitled for deduction of capital gains. In support of her contention, she has produced the work order engaged with M/s. Prashant Sai Builders including the notarized work order, invoices raised, bank payments for the same. Further, with respect to addition made u/sec.69A of the Act, the Learned Counsel for the Assessee contended that, the Assessing Officer has treated the Printed from counselvise.com 5 ITA No.1154/Hyd/2025 Madhavi Beeravolu entire bank credits of Rs.71,87,285/- as turnover of the assessee and applying 8% as business profits on the above bank credits, without appreciating the fact that, the assessee has received substantial amounts in the bank from her daughter, relatives and proceeds from bank loan obtained for the property. However, the learned CIT(A) without considering the submissions of the assessee on merits, simply dismissed the appeal of assessee on account of delay in filing the appeal before the learned CIT(A), although, the assessee has explained ‘sufficient and reasonable cause’. He, therefore, submitted that, in the interest of justice, the matter may be set-aside to the file of learned CIT(A) for afresh adjudication. 6. Sri Gurpreet Singh, learned DR for the Revenue, on the other hand, strongly relied on the orders of the authorities below. He submitted that, during the course of assessment proceedings, the Assessing Officer has given various opportunities to substantiate her claim by issuing statutory notices and show cause notice. However, the assessee did not chose to respond to the said notices. Therefore, the Assessing Officer, in absence of proper explanation from the assessee, assessed the total income of Printed from counselvise.com 6 ITA No.1154/Hyd/2025 Madhavi Beeravolu the assessee at Rs.1,00,91,053/- by making additions on account of sale of immovable property and deposits in DCB Bank Ltd., During the course of appellate proceedings before the learned CIT(A), firstly, the assessee had filed the appeal with a delay of 177 days and failed to explain day-to-day delay with ‘reasonable and sufficient cause’. Therefore, the learned CIT(A), in absence of proper explanation from the assessee, has rightly dismissed the appeal of the assessee and upheld the order of the Assessing Officer. He, therefore, submitted that, the order of the learned CIT(A) should be upheld. 7. We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, admittedly, there is no dispute between the parties that, the Assessing Officer has passed ex-parte assessment order and assessed the income of the assessee at Rs.1,00,91,053/- by making additions on account of sale of immovable property amounting to Rs.83 lakhs and cash deposited into DCB Bank Ltd., amounting to Rs.12,16,070/-. During the course of appellate proceedings, in response to notice issued by the learned CIT(A) u/sec.250 of the Act, the assessee has filed submissions dated Printed from counselvise.com 7 ITA No.1154/Hyd/2025 Madhavi Beeravolu 02.05.2025 which is evident from page 78 of the paper book. However, the learned CIT(A) has dismissed the appeal of the assessee on account of delay of 177 days in filing the appeal before him. We find that, the assessee has explained the reasons for delay in filing the appeal to the effect that, her father has got hospitalized on multiple occasions and expired and produced the death certificate also before the learned CIT(A). However, the learned CIT(A) without considering the ‘reasonable and sufficient cause’ explained by the assessee with supporting medical certificates and death certificate of her father, simply dismissed the appeal of the assessee on account of delay, without deciding the appeal on merits. Since, the learned CIT(A) has dismissed the appeal filed by the assessee, without considering the submisisons of the assessee, in our considered view, the matter needs to be set-aside to the file of the learned CIT(A) to reconsider the issue after considering the relevant submissions made by the assessee. Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of the learned CIT(A) and also direct the learned CIT(A) to reconsider the issue after providing a reasonable opportunity of hearing to the assessee. Needless to say, the Printed from counselvise.com 8 ITA No.1154/Hyd/2025 Madhavi Beeravolu assessee shall furnish relevant details as and when the appeal is posted for hearing. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 29th October, 2025. Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- (मंजूिधथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 29.10.2025. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Madhavi Beeravolu, H.No.1-31, Puppalaguda Village, Rajendra Nagar Mandal, Rangareddy District – 500089, Telangana. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward – 8(1), Hyderabad. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Printed from counselvise.com "