RAMESHA DODDAPPA,DAVANGERE V. INCOME TAX OFFICER, WARD-1, DAVANGERE

ITA 425/BANG/2025

AI Insights

This case involves an appeal by Shri Ramesha Doddappa against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2017-18. The primary issue in the appeal was the treatment of cash deposits made during the demonetisation period, which the AO had treated as income under section 69A of the Income Tax Act, 1961. The assessee argued that these deposits were from known sources, specifically the sale of liquor, and sought an opportunity to present his case and supporting documents before the lower authorities. The Tribunal found merit in the assessee's request for a re-examination of the case, considering the procedural lapses by the previous tax consultant and the lack of legal knowledge on the part of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716892 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 28-02-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE; GANESH R GHALE
• Assessee Lawyers: RAKSHA
• Keywords: Set aside
• Section: 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 425/Bang/2025 Assessment Year : 2017-18 Shri Ramesha Doddappa, Adhishakthi Prasanna Bar & Restaurant, Khata No. 299, Nuggehalli Village, Chennagiri Taluk, Davangere District – 577 215. PAN: AHPPD3229E Vs. The Income Tax Officer, Ward – 1, Davangere. APPELLANT RESPONDENT Assessee by : Ms. Shree Raksha, Advocate Revenue by : Shri Ganesh R Ghale, Advocate, Standing Counsel for Revenue Date of Hearing : 17-07-2025 Date of Pronouncement : 20-08-2025 ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER This is an appeal filed by the assessee challenging the order of NFAC, Delhi dated 18/09/2023 in respect of the A.Y. 2017-18. 2. The present appeal has been filed by the assessee with a delay of 456 days. The assessee in support of the said delay had filed an application to condone the said delay. In the application, the assessee submitted that the previous tax consultant who has filed the appeal before the Ld.CIT(A) had Printed from counselvise.com Page 2 of 4 ITA No. 425/Bang/2025 not brought to his notice about the hearing notices issued by the Ld.CIT(A) and in fact he has also not furnished any written submissions before the Ld.CIT(A). The assessee, having no legal knowledge to follow up the appeals, had mainly relied on the said tax consultant. The tax consultant miserably failed to appear before the Ld.CIT(A) and also not informed about the disposal of the appeal ex-parte. The assessee came to know about the ex- parte order of the Ld.CIT(A) only when the assessee received a call from the local income tax officer for recovery of the demand during the first week of February, 2025. Thereafter necessary arrangements were made and the appeal was filed before this Tribunal. 3. We have heard the arguments of both sides and also perused the reasons stated in the delay condonation application and in the interest of justice, we have decided to allow the said application for the reason that the assessee should not be suffered for the mistakes committed by the tax consultant. 4. At the outset, we find that the order of the Ld.CIT(A) is an ex-parte order. Similarly, the AO had also made an assessment u/s. 144 of the Act. The only dispute involved in this appeal is the cash deposits made during the demonetisation period. The assessee filed his reply only to the show cause notice issued by the AO and enclosed the copy of the statement of affairs and the VAT return copies. In the reply, the assessee submitted that the cash deposits are from out of the sale of liquor. The AO not satisfied with the reply had treated the said deposits as income u/s. 69A of the Act. The appeal filed by the assessee was also not decided on merits. 5. At the time of hearing, the Ld.AR submitted that the assessee is having all the documents to show that the cash deposits made during the demonetisation period are only from the known sources and prayed an opportunity to put forth his case before the authorities below. Printed from counselvise.com Page 3 of 4 ITA No. 425/Bang/2025 6. The Ld.DR relied on the order of the lower authorities. 7. We have heard the arguments of both sides and perused the materials available on record. 8. As seen from the materials available on record, the assessee had known source of income through selling the liquor. The assessee instead of filing the relevant records before the AO, had filed the statement of affairs and the VAT return copies. Therefore we are of the view that the assessee had valid explanations for the deposit of cash during the demonetisation period but unfortunately, the assessee had not properly responded before the AO as well as before the Ld.CIT(A). 9. Considering the said facts and circumstances of the case, we are of the view that one more opportunity may be granted to the assessee to appear before the AO and furnish the required documents in support of his claim that the cash deposits during the demonetisation period were earned from the sale of liquor. We, therefore, set aside the orders of both the authorities and remitted this issue to the file of the AO. We also direct the assessee to pay a cost of Rs. 5,000/- to the income tax department and produce the receipt before the AO for adjudicating the issue afresh. 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 20th August, 2025. Sd/- Sd/- (LAXMI PRASAD SAHU) (SOUNDARARAJAN K.) Accountant Member Judicial Member Bangalore, Dated, the 20th August, 2025. /MS / Printed from counselvise.com Page 4 of 4 ITA No. 425/Bang/2025 Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. Guard file 6. CIT(A) By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "