NOMULA NARMADA REDDY,HYDERABAD V. DCIT., CENTRAL CIRCLE-3(3), HYDERABAD

ITA 1397/HYD/2025

AI Insights

The case involves Smt. Nomula Narmada Reddy, who appealed against the order of the CIT(A), which upheld the Assessing Officer's addition of Rs. 9,00,000 as unexplained money under section 69A for the assessment year 2020-2021. The assessee argued that the transaction was conducted through bank payments and not cash, and thus should not be considered unexplained. The CIT(A) had dismissed the appeal ex-parte, leading to the current appeal before the Tribunal. The Tribunal found that the assessee was not given sufficient opportunity to present her case and thus remanded the matter back to the CIT(A) for a fresh decision after allowing the assessee to submit necessary details and evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784690 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Appeal Filed On: 29-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KUMARAN
• Assessee Lawyers: C. MAHESHWAR REDDY; ISSUING THREE NOTICES; BUT
• Keywords: Corroborative evidences; Principle of natural justice

Judgement Text

"आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SMC’ Bench, Hyderabad Įी ͪवजय पाल राव, उपाÚ य¢ एवं Įी मधुसूदन सावͫडया, लेखा सदè य क े सम¢ । BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.1397/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year 2020-2021) Smt. Nomula Narmada Reddy, Hyderabad. PAN ABLPN5320J vs. The DCIT, Central Circle-3(3), Hyderabad. (Appellant) (Respondent) िनधाŊįरती Ȫारा /Assessee by: CA C. Maheshwar Reddy राज̾ व Ȫारा /Revenue by: Sri R Kumaran, Sr. AR सुनवाई की तारीख/Date of hearing: 11.11.2025 घोषणा की तारीख/Pronouncement: 11.11.2025 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT : This appeal by the Assessee is directed against the order dated 28.06.2025 of learned CIT(A), Hyderabad- 11, Hyderabad, for the assessment year 2020-2021. 2. The assessee has raised the following grounds of appeal : Printed from counselvise.com 2 ITA.No.1397/Hyd./2025 1. “The order of the Ld. CIT(A) in upholding the order of the Assessing Officer is erroneous in law as well as in facts of the case. 2. The Ld. AO has ignored the fact that there is only bank payment made and no cash was involved and erred in treating the amount of Rs.9,00,000/- as unexplained money u/s 69A. 3. The Ld. AO has erroneously arrived at a false conclusion that there is cash payment involved without any supporting material and such action does not have any basis. 4. The Ld. CIT(A) should have observed the that there is no speaking evidence with the Assessing Officer to make the addition u/s 69A as the purchase of property was made through proper banking channel and there is nothing unexplained. 5. The Ld. CIT(A) should have considered that there are sufficient sources for the Appellant to purchase the said property and accordingly erred in confirming the addition made by the Ld. AO. 6. The Ld. CTT(A) without allowing sufficient opportunity has upheld the addition which is bad in law. 7. The Appellant craves to add/leave/alter/modify any other ground of appeal at the time of hearing.” Printed from counselvise.com 3 ITA.No.1397/Hyd./2025 3. At the time of hearing, learned Authorised Representative of the Assessee submitted has that the learned CIT(A) has dismissed the appeal of the assessee while passing the impugned order ex-parte. He has referred to the impugned order and submitted that the assessee requested for adjournment, however, the learned CIT(A) has declined to grant the adjournment of hearing and passed the impugned order ex-parte. Thus, the learned Authorised Representative of the Assessee has submitted that the assessee may be given one more opportunity to present her case before the learned CIT(A) and to explain the source of the payment of Rs.9 lakhs for which the addition is made by the Assessing Officer and confirmed by the learned CIT(A). 4. On the other hand, learned DR for the Revenue has submitted that the learned CIT(A) has given sufficient opportunities to the assessee by issuing three notices, but, the assessee failed to furnish any supporting evidences and consequently, the addition was confirmed by the learned CIT(A). He has relied upon the impugned order of the learned CIT(A). Printed from counselvise.com 4 ITA.No.1397/Hyd./2025 5. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has made the addition of Rs.9 lakhs while passing the assessment order u/sec.147 of the Income Tax Act, 1961 [in short \"the Act\"] on account of unexplained money u/sec.69A of the Act. The assessee challenged the said addition before the learned CIT(A). In response to the notice, the assessee sought adjournment of the hearing for furnishing the required information and supporting evidences. However, on third occasion, the learned CIT(A) declined to grant further opportunity to the assessee and passed the impugned order. The relevant observation of the learned CIT(A) in Paras-6.3 and 6.4.2 are as under : “6.3. To examine the other grounds raised by the appellant, notices u/s. 250 of the IT. Act was issued on 21.04.2025, 26.05.2025 & 12.06.2025, requiring the appellant for written submissions and furnishing the supporting evidences, to which no information or any submissions was filed, except filing requests for adjournments. Instead of furnishing the required information or substantiating the grounds of appeal. the appellant merely filed applications seeking adjournments. The appellant failed to substantiate its grounds of appeal with Printed from counselvise.com 5 ITA.No.1397/Hyd./2025 evidences. Sufficient opportunities have been granted in the interest of natural justice and no further adjournments in this case can be granted. 6.4. xxx xxx xxx 6.4.1. xxx xxx xxx 6.4.2. These submissions are contradictory. The appellant must give a consistent and verifiable explanation regarding the source of cash payment. The appellant has not utilized any opportunities provided during the assessment proceedings or during the appellate proceedings, in explaining the sources for the cash payment with supporting documents. During the appellant proceedings, the appellant was provided 3 opportunities by issue of notices u/s. 250 on 21.04.2025, 26.05.2025 & 12.06.2025. However, no information was filed in response to any of the notices issued apart from seeking adjournment for the notices issued on 26.05.2025 & 12.06.2025. The onus to explain the sources for the cash payment with supporting documents lies with the appellant, which she has failed to discharge. Without any supporting documentary evidences, the cash payment of Rs.9,00,000/-remains unexplained and there is no reason to interfere with the action of the assessing officer and accordingly the addition of the Rs.9,00,000/- is confirmed.” Printed from counselvise.com 6 ITA.No.1397/Hyd./2025 6. Thus, it is clear that the assessee sought adjournment in response to the notice issued by the learned CIT(A). On first 02 occasions the learned CIT(A) has granted adjournment, but, in response to 3rd notice, the assessee filed an application seeking adjournment which was declined by the learned CIT(A). Now, the learned Authorised Representative of the Assessee has pleaded that the assessee would file the requisite supporting evidences and details before the learned CIT(A) in case another opportunity is granted to the assessee. Accordingly, in the facts and circumstances of the case and in the interest of justice, we grant further opportunity to the assessee to submit all the relevant details as well as supporting evidences in support of the claim before the learned CIT(A). Hence, the impugned order of the learned CIT(A) is set-aside and the matter is remanded to the record of the learned CIT(A) for fresh adjudication, after granting one more opportunity to the assessee to submit the necessary details and relevant supporting evidences. Printed from counselvise.com 7 ITA.No.1397/Hyd./2025 7. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on the conclusion of hearing i.e., on 11.11.2025. Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 11th November, 2025 VBP Copy to : 1. Smt. Nomula Narmada Reddy, Hyderabad. C/o. B. Narsing Rao & Co. LLP, Plot No.554, MLA Colony, Rd No.92, Jubilee Hills, Hyderabad-096. 2. The DCIT, Central Circle-3(3), Aayakar Bhawan, Hyderabad – 500 004. 3. The Pr.CIT-(Central), Hyderabad. 4. The DR, ITAT, SMC-Bench, Hyderabad. 5. Guard file. BY ORDER, //True copy// Printed from counselvise.com "