MAHESHWAR REDDY KURA,HYDERABAD V. INCOME TAX OFFICER, WARD-2, KARIMNAGAR

ITA 1542/HYD/2025

AI Insights

The case involves Maheswara Reddy Kura, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, pertaining to the assessment year 2017-18. The primary contention arose from the assessee's failure to respond to notices during both the assessment and appellate proceedings, leading to ex parte assessments and additions to his income. The Tribunal noted the assessee's genuine reasons for non-compliance, including personal difficulties and circumstances that prevented timely monitoring of the proceedings. Consequently, the Tribunal decided to provide another opportunity for the assessee to present his case, emphasizing the need for fair hearing and due process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790463 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 27-09-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Business income; Reasonable cause; Unexplained investment
• Section: 147; 148; 144; 142(1); 69; 133(6); 234B

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘एस.एम.सी.’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad “SMC” 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.1542/Hyd/2025 (निर्धारण वर्ा/ Assessment Year: 2017-18) Maheswara Reddy Kura R/o. Hyderabad. PAN : AJWPK4055E Vs. The Income Tax Officer, Ward – 2, Karimnagar. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri. T. Chaitanya Kumar, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Shri D. Praveen, Sr.A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 20.11.2025 घोर्णध की तधरीख/ Date of Pronouncement : 03.12.2025 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 Faceless Appeal Centre [in short “NFAC”], Delhi, dated 28.08.2025, pertaining to the assessment year 2017-18. Printed from counselvise.com 2 Maheshwar Reddy Kura ITA No. 1542/Hyd/2025 2. The brief facts of the case are that, the assessee filed his return of income for A.Y. 2017-18 declaring total income of Rs.3,73,860/-. Based on information that the assessee had deposited cash of Rs.12,00,000/- during the demonetization period, the A.O. issued notice under Section 148 of the Income-tax Act, 1961 (for short “the Act”) after recording reasons under Section 147 of the Act. Although notices under Sections 148 and 142(1) were duly served, the assessee did not file any response. The A.O. gathered bank statements under Section 133(6) of the Act and noticed multiple undisclosed bank accounts, high cash deposits, mismatch between the balance sheet and actual bank balances, and unexplained deposits during the demonetization period. The A.O., after considering the material available on record and in the absence of any explanation from the assessee, completed the assessment ex parte under Section 144 r.w.s. 147 and determined the total income at Rs.49,51,868/-, inter alia, making additions towards unexplained investment under Section 69 of the Act, estimated business income on undisclosed turnover, and unexplained cash deposits under Section 69 read with Section 115BBE of the Act. Thereafter, the A.O. initiated penalty proceedings under Section 270A for misreporting and underreporting, under Section 271AAC(1) for unexplained investment, and under Section 272A(1)(d) for non-compliance with notices, and Printed from counselvise.com 3 Maheshwar Reddy Kura ITA No. 1542/Hyd/2025 issued the final demand after charging interest under Sections 234A, 234B and 234C of the Act. 3. Aggrieved with the assessment order, the assessee preferred appeal before the Ld. CIT(A). 4. Before the Ld. CIT(A), the assessee filed appeal on 22.10.2021 challenging the assessment order passed under Section 147 r.w.s. 144 of the Act. There was a delay in filing the appeal, and the assessee sought condonation stating portal issues and health issues due to COVID. The Ld. CIT(A) condoned the delay and issued multiple notices under Section 250 of the Act on 29.11.2024, 27.03.2025, 30.07.2025 and 13.08.2025, all of which were duly delivered to the registered e-mail ID of the assessee. However, the assessee did not file any response or submissions to substantiate his case and remained completely non- responsive throughout the appellate proceedings. 5. The Ld. CIT(A), after considering the relevant facts, observed that, the assessee had failed to furnish any explanation or documentary evidence to rebut the additions made by the A.O. and had failed to demonstrate that the A.O.’s additions were erroneous. The Ld. CIT(A) further opined that the assessee was not interested in pursuing the appeal and, relying on certain judicial precedents relating to non- Printed from counselvise.com 4 Maheshwar Reddy Kura ITA No. 1542/Hyd/2025 prosecution, proceeded to decide the matter on merits. Even on merits, the Ld. CIT(A) held that, the additions of Rs.45,78,008/- were made by the A.O. after due verification and found no reason to interfere with the assessment. Accordingly, the Ld. CIT(A) dismissed the appeal. 6. Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal. 7. The learned counsel for the assessee, Shri T. Chaitanya Kumar, Advocate, submitted that, the assessment was completed ex parte because the assessee could not respond to the notices due to genuine reasons. It was submitted that, the assessee had gathered the records but could not upload the details in time, and the Ld. CIT(A) also dismissed the appeal for non-prosecution without considering the issues on merits. It was argued that, the assessee should be given one more opportunity to explain the sources of cash deposits and bank transactions before the A.O., and therefore, the matter may be restored to the file of the A.O. for fresh consideration. 8. Shri D. Praveen, Ld. Sr. A.R. for the Revenue, supporting the orders of lower authorities, submitted that, several notices were issued both during assessment and appellate proceedings, and all notices were duly served, but the assessee did not file any explanation. It was argued that, Printed from counselvise.com 5 Maheshwar Reddy Kura ITA No. 1542/Hyd/2025 the A.O. made additions only after examining the bank statements and other material, and the Ld. CIT(A) rightly confirmed the additions as the assessee failed to furnish evidence. It was further submitted that, the assessee cannot seek repeated opportunities without showing reasonable cause for the default. 9. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below. Admittedly, the assessment proceedings before the A.O. were ex parte, as the assessee neither appeared nor filed any details in response to the statutory notices issued under the Act. Further, the proceedings before the Ld. CIT(A) were also ex parte, because the assessee did not respond to any of the notices issued under Section 250 even though the appeal was taken up on various dates, as recorded by the Ld. CIT(A) in their order. The assessee has explained the reasons for non-appearance before the authorities and submitted that, due to personal difficulties and circumstances, he could not monitor the income-tax proceedings in time. In our considered view, the explanation offered by the assessee constitutes sufficient cause for the non-appearance during the assessment as well as the appellate proceedings. Therefore, considering the facts and circumstances of the case and to provide one more opportunity to the assessee, we set aside the order passed by the Ld. Printed from counselvise.com 6 Maheshwar Reddy Kura ITA No. 1542/Hyd/2025 CIT(A) and restore the matter to the file of the Ld. CIT(A) with a direction to decide the issue after considering the documents available on record and after affording adequate opportunity of hearing to the assessee in accordance with law, subject to payment of costs of Rs. 5,000/- (Rupees Five Thousand only) in favour of the Prime Minister National Relief Fund, which shall be paid within one month from the date of receipt of this order. Needless to say, the assessee shall appear before the Ld. CIT(A) and file necessary details without seeking adjournment. 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 3rd December, 2025. Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- (मंजूिधथ जी) (MANJUNATHA G.) लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 03.12.2025. TYNM/sps Printed from counselvise.com 7 Maheshwar Reddy Kura ITA No. 1542/Hyd/2025 आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Maheswar Reddy Kura, R/o. E-Block, Flat No.101, Aditya Empress Towers, Shaikpet Nala, Tolichowki, Golconda Post, Hyderabad – 500008. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward – 2, Karimnagar. Hyderabad. 3. The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. The Commissioner of Income Tax 6. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "