RAMESH CHINTAGUMPALA,USA V. ITO., WARD INTERNATIONAL TAXATION, NELLORE

ITA 337/HYD/2025

AI Insights

The case involves Shri Ramesh Chintagumpala, a non-resident Indian (NRI) residing in the USA, who appealed against the order of the Income Tax Officer (International Taxation), Nellore, concerning the Assessment Year 2015-16. The primary issues were the additions made under Section 69 of the Income Tax Act, 1961, which treated certain investments as unexplained, and the inclusion of interest income which was already subjected to TDS. The assessee argued that the investments were made from his foreign salary, which was repatriated to India, and that he had not been given a fair opportunity to present his case during the assessment proceedings. The ITAT found that the Ld. AO and the Dispute Resolution Panel (DRP) had not adequately considered the assessee's submissions and evidence, leading to the decision to remand the case for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708350 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDER KUMAR NAIK
• Assessee Lawyers: KUMAR PAL TATED
• Keywords: Opportunity of being heard; Additional evidence; Unexplained investment; Salary income; Principle of natural justice; TDS
• Section: 147; 148; 69

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad श्री विजय पाल राि, उपाध् यक्ष एिं श्री मिुसूदन सािडिया, लेखा सदस् य क े समक्ष । BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.337/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2015-16) Shri Ramesh Chintagumpala, USA. PAN:AYDPC9280B Vs. Income Tax Officer (International Taxation), Nellore. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri Kumar Pal Tated, C.A. रधजस् व द्वधरध/Revenue by: Shri Narender Kumar Naik, CIT-DR सुिवधई की तधरीख/Date of hearing: 14/07/2025 घोर्णध की तधरीख/Pronouncement: 16/07/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by Shri Ramesh Chintagumpala (“the assessee”), feeling aggrieved by the order passed by the Learned Assessing Officer (“Ld. AO”) u/s. 147 r.w.s. 144 of the Income Tax Act, 1961 (“the Act”) dated 31.01.2025, as per the directions of ITA No.337/Hyd/2025 2 Learned Dispute Resolution Panel (“Ld. DRP”) u/s. 144C(5) of the Act dated 23.12.2024 for the A.Y. 2015-16. 2. The assessee has raised the following grounds of appeal : “ 1. The DRP erred in upholding the addition of Rs.52,39,633/- u/s 69 of the Act to the income of the assessee. 2. The DRP passed the assessment order without considering the submissions made by the appellant during the course of assessment proceedings. Hence, the order is not in accordance with the principles of natural justice. 3. The DRP erred in treating the investment in fixed deposits as unexplained investment u/s 69 of the Act. 4. The DRP ought to have appreciated the fact that the appellant is resident of USA and investment in FD was made by the appellant from his earnings in USA which were repatriated back to India. Henceforth, the source of investment is completely explained. 5. The DRP ought to have appreciated the fact that the appellant is resident of USA and regularly files his tax returns as per the applicable laws of United States for the income earned in USA. 6. The DRP ought to have appreciated the fact that since, the appellant is a non- resident the income earned by him abroad would not taxable in India. Further, appellant had no income which was arising from India and hence, the appellant did not file ITR in India for the year under consideration. 7. The DRP erred in confirming the addition of Rs.5,17,174/- on account of interest income. 8. The DRP ought to have appreciated the fact that tax had already been deducted in the form of TDS from the interest income and this addition will amount to double taxation. 9. The DRP erred by not giving credit of TDS deducted on interest income at the computation of total Demand payable. ITA No.337/Hyd/2025 3 10. The Appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal.” 3. The brief facts of the case are that, the assessee is a non- resident Indian (“NRI”) working in the USA in the Information Technology and Software Sector. For the Assessment Year 2015–16, the Ld. AO on the basis of the information came to know that the assessee had made a fixed deposit (“FDRs”) of Rs.52,39,633/- and also received a payment of Rs.5,17,174/- from ICICI Bank as per the TDS statement. Accordingly, the case of the assessee was reopened under Section 147 of the Act and a notice under Section 148 of the Act was issued to the assessee on 15.04.2022. Since there was no compliance to the statutory notices, the Ld. AO framed a draft assessment order under Section 144C(1) of the Act on 15.03.2024, proposing additions of (i) Rs.52,39,633/- under Section 69 of the Act as unexplained investment, and (ii) Rs.5,17,174/- as interest income. 4. Aggrieved with the draft assessment order of the Ld. AO, the assessee filed objections before the Ld. DRP, which were dismissed. On the basis of the directions of Ld. DRP dated 23.12.2024, the Ld. AO passed a final assessment order dated 31.01.2025 making addition ITA No.337/Hyd/2025 4 of (i) Rs.52,39,633/- under Section 69 of the Act as unexplained investment, and (ii) Rs.5,17,174/- as interest income, computing the total income at Rs.57,56,807/-. 5. Aggrieved with the final assessment order of the Ld. AO, the assessee has preferred this appeal before the Tribunal. The Ld. Authorised Representative (“Ld. AR”) submitted that the assessee is a NRI working in the United States in the IT sector and regularly files his return of income in USA. He maintained a bank account with ICICI Bank in India, from where the impugned FDRs were made. The Ld. AR invited our attention to the FDR certificates issued by ICICI Bank (page no. 79 of the paper book) and the relevant ICICI Bank statements (page no. 89 of the paper book), showing two FDRs made on 07.08.2014 amounting to Rs.13,00,000/- and Rs.20,00,000/-, totalling Rs.33,00,000/-. The Ld. AR also submitted that, the Ld. AO has alleged that the assessee has made FDRs of Rs.52,39,633/- without providing any details of such FDRs. It was also explained that the source of the FDRs was the assessee’s foreign salary, which was first credited to his US bank account and then transferred to his ICICI Bank account. The Ld. AR referred to the salary certificate issued by ITA No.337/Hyd/2025 5 the assessee’s US employer (page no. 80 of the paper book), evidencing the foreign salary income. 6. The Ld. AR further submitted that non-compliance before the Ld. AO was due to the fact that the statutory notices were sent to the email ID of the tax consultant of the assessee, who failed to inform the assessee about the proceedings. It was only upon receipt of the draft assessment order that the assessee became aware of the reassessment and filed a detailed response along with evidence explaining the source of FDRs. The Ld. AR also submitted that the Ld. DRP had called a remand report from the Ld. AO. During the remand proceedings before the Ld. AO, the assessee again filed his explanation before the Ld. AO. However, the Ld. AO failed to appreciate the assessee’s reply and documentary evidence in his remand comments. Thus, the Ld. DRP proceeded to dismiss the objections without adequate consideration of the evidence. Finally, the Ld. AR prayed that the entire matter may be restored to the file of the Ld. AO for proper examination of the FDRs and source of investment, after giving due opportunity to the assessee to explain the same. ITA No.337/Hyd/2025 6 7. Per contra, the Learned Departmental Representative (“Ld. DR”) relied upon the orders passed by the Ld. AO and the Ld. DRP. It was submitted that despite multiple opportunities, the assessee did not respond during the original assessment stage, leading to framing of ex-parte draft order. However, the Ld. DR fairly submitted that if the Tribunal deems it fit, the matter may be remanded to the Ld. AO for proper verification of the FDRs and explanations provided by the assessee during Ld. DRP proceedings. 8. We have carefully considered the rival submissions and perused the material available on record, including the Paper Book filed by the assessee. We have also gone through the FDR certificates (page no. 79 of the paper book), bank statement (page no. 89 of the paper book), and salary certificate of the assessee (page no. 80 of the paper book). It is seen that the assessee had made only two FDRs during the year aggregating to Rs.33,00,000/-, whereas the Ld. AO has made an addition of Rs.52,39,633/- under Section 69 of the Act without giving any details of his workings. From the documentary evidence filed before the Ld. DRP and again before us, it appears that the source of investment in the FDRs is duly explained to be foreign salary, which ITA No.337/Hyd/2025 7 has been routed through the assessee’s ICICI Bank account. We further note that the assessee could not respond during assessment proceedings due to failure of the tax consultant to inform him about the notices. However, upon receiving the draft order, the assessee responded promptly with documentary evidence, and the same was placed before the Ld. DRP and the Ld. AO through the remand report mechanism. Despite this, the Ld. DRP has summarily rejected the objections without appreciating the merits of the submissions and supporting documents. In our considered view, this is a fit case where the matter requires verification and re-examination by the Ld. AO, particularly regarding the actual FDRs made during the year and the source thereof. Accordingly, we deem it appropriate to restore the matter to the file of the Ld. AO with the directions that the Ld. AO shall verify the assessee’s claim that only FDRs of Rs.33,00,000/- were made during the year and the source of such investment from foreign salary may be verified based on evidence submitted by the assessee. Further, the assessee shall be given due opportunity of being heard and to file any additional evidence in support of his claim ITA No.337/Hyd/2025 8 and the Ld. AO shall pass a speaking order after proper consideration of all submissions and evidence. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 16th July, 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad. Dated: 16.07.2025. * Reddy gp Copy of the Order forwarded to : 1. Shri Ramesh Chintagumpala, 23110, Mistflower, Dr Clarksburg, Montgomery, USA – 999999 2. ITO, (International Taxation), Nellore. 3. Pr.CIT, Tirupati. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, "