RAMINENI VENKATESWARULU,GUNTUR V. INCOME TAX OFFICER, WARD-1, NARASARAOPET

ITA 538/VIZ/2024

AI Insights

The case involves an appeal by the assessee, Ramineni Venkateswarlu, against the order of the Commissioner of Income-Tax (Appeals), which upheld the addition of Rs.80,81,995 as unexplained credits in the assessee's bank accounts under Section 69A of the Income Tax Act, 1961. The Assessing Officer had initially made this addition after the assessee failed to explain the credits during the assessment proceedings. The CIT(A) dismissed the appeal ex-parte as the assessee did not participate in the proceedings. The Tribunal found that the CIT(A) had not addressed the additional documentary evidence submitted by the assessee and directed a re-adjudication of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46529 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Unexplained cash credit
• Section: 147; 148; 13; 69A

Judgement Text

"आयकर अपीलीय अधिकरण, विशाखापटणम पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench श्री रिीश सूद, माननीय न्याययक सदस्य एिं श्री मिुसूदन सािडिया, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.538/Viz/2024 (निर्धारण वर्ा/ Assessment Year : 2015-16) Ramineni Venkateswarlu, Guntur. PAN : AKVPR3349C The Income Tax Officer, Ward – 1, Narasaraopet. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri GVN Hari, Advocate (HYBRID) राजस्व का प्रतततितित्व/ Department Represented by : Dr.Aparna Villuri, Sr.AR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 24.03.2025 घोर्णध की तधरीख/ Date of Pronouncement : 26.03.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 08.10.2024 2 ITA No.538/Hyd/2024 which in turn arises from the order passed by the Assessing Officer under Section 147 r.w.s. 144 of the of the Income Tax Act, 1961 (in short “the Act”) dt.29.01.2024 for A.Y. 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before us: “1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in dismissing the appeal ex-parte. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.80,81,995 made by the assessing officer u/s 69A of the Act towards unexplained credits of Rs.39,05,382 in Axis Bank and Rs.41,76,613 in SBI.” 2. Succinctly stated, the Assessing Officer based on information that the assessee during the subject year had carried out certain financial transactions, but had not filed his return of income, initiated proceedings under Section 147 of the Act. Order u/s 148A(d) of the Act dated 21.04.2022 was passed by the Assessing Officer. Thereafter, the Assessing Officer issued notice u/s 148 of the Act, dated 21.04.2022 wherein the assessee was called upon to file his return of income. 3 ITA No.538/Hyd/2024 3. During the course of assessment proceedings, the Assessing Officer observed that there were credits aggregating to Rs.85,81,995/- in the bank accounts held by the assessee, as under: Name of the Bank Account Account Holder Name Total Credit in A/c (Rs.) Axis Bank 476010100038623 Ramineni Venkateswarlu 39,05,382/- Canara Bank 1323101006233 Ramineni Venkateswarlu 5,00,000/- State Bank of India 62014486651 Ramineni Venkateswarlu 41,76,613/- Total 85,81,995/- As the assessee had failed to come forth with an explanation regarding the credits appearing in his two bank accounts, viz. (i) Axis Bank Account No.4760101000038623: Rs.39,05,382/-; and (ii) State Bank of India, Account No.62014486651: Rs.41,76,613/- ; therefore, the Assessing Officer held the same as the assessee’s unexplained money under Section 69A of the Act. Accordingly, the Assessing Officer vide his order passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 29.01.2024 determined the income of the assessee at Rs.80,81,995/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success. Ostensibly, as the assessee had 4 ITA No.538/Hyd/2024 failed to participate in the proceedings before the first appellate authority, therefore, the latter was constrained to proceed with and dispose of the appeal on an exparte basis. The CIT(A) after referring to the facts involved in the case before him, held a firm conviction that as the assessee had failed to discharge the primary onus/burden that was cast upon him as regards explaining the credits in his subject bank accounts, therefore, no infirmity did emerge from the addition made by the Assessing Officer u/s 69A of the Act. Accordingly, the CIT(A) based on his deliberations dismissed the appeal. 5. The assessee being aggrieved with the order of CIT(A) has carried the matter in appeal before us. 6. We have heard the learned Authorized Representatives of both the parties, perused the orders of lower authorities and the material available on record. 7. Shri G.V.N. Hari, the learned Authorized Representative for the assessee (who has joined virtually), (for short “LD.AR”) at the threshold of hearing of the appeal, submitted that the CIT(A) had most arbitrarily dismissed the appeal. Elaborating on his 5 ITA No.538/Hyd/2024 contention, the ld. AR submitted that not only the CIT(A) had failed to deal with the grounds of appeal raised by the assessee before him but also, there is no whisper in the body of his order, as regards the “additional documentary evidences” that the assessee had filed with him under Rule 46A of the Income-tax Rules, 1962. The ld. AR submitted that the assessee had at Sr.No.12 of his Memorandum of Appeal in “Form No.35”, after stating in affirmative that he sought to file additional documentary evidence under Rule 46A, had enclosed 11 documents for consideration by the CIT(A). The ld. AR to fortify his contention had drawn our attention to Sr. No.12 & 13 of Memorandum of Appeal i.e., “Form No.35” which revealed that the assessee after answering in the affirmative that he sought to rely upon the additional documentary evidence under Rule 46A, had uploaded/filed with the CIT(A) 11 documents marked as Annexure “A” to Annexure “K”, which reads as under: S.No. Document Name Description Documentary Evidence 1. Annexure-A Copy of Sale Deed, Purchase Deed along with capital gain computation 2. Annexure-B Copy of Promissory Notes along with KYC and Confirmation Letter for Loan from Ramineni Pedda Srinivasa Rao 3. Annexure-D Copy of ledger from Muthoot Securities Ltd. 6 ITA No.538/Hyd/2024 4. Annexure-E Axis Bank statement highlighting copy of reversal of expenses 5. Annexure-F Copy of Cash book 6. Annexure-G Ledger copy of M.Narayana Reddy, affidavit and confirmation 7. Annexure-H Ledger copy of Tella Lakshman Rao. Affidavit and Confirmation. 8. Annexure-I SBI Bank statement highlighting copy of reversal of expenses 9. Annexure-J Coy of ledger and confirmation from GV Narayana regarding unsecured loan 10. Annexure-K Copy of computation of income tax liability 11. Annexure-C Copy of promissory Notes along with KYC and Confirmation Letter for Loan from Ramineni Pedda Srinivasa Rao 8. Carrying his contention further, the ld.AR submitted that as the CIT(A) has grossly erred in law and facts of the case in not dealing with the additional documentary evidence that was filed by the assessee under Rule 46A and had summarily dismissed the appeal vide a non-speaking order, therefore, the same in all fairness be set aside with a direction to him to re-adjudicate the appeal after addressing the assessee’s application for admission of additional evidence and affording of a reasonable opportunity of being heard to him. 7 ITA No.538/Hyd/2024 9. Per contra, the learned Departmental Representative (for short the “DR”) had relied upon the orders of lower authorities. The Ld. DR on being confronted with the fact that there was no whisper in the order of CIT(A) about the additional documentary evidence that was uploaded/filed by the assessee under Rule 46A, failed to come forth with any answer. 10. We have thoughtfully considered the issue involved in the present appeal in the backdrop of the observations of the lower authorities and the material available on record. 11. Admittedly, it is a matter of fact borne from the record that as the assessee had failed to participate in the proceedings before the CIT(A), therefore, the latter was constrained to proceed with and dispose of the appeal vide an exparte order. Although, we are principally in agreement with the CIT(A) that in case an assessee/ appellant fails to participate in the appellate proceedings, then, the appellate authority being left with no other option has to proceed with and dispose of the appeal based on the material available on record. At the same time, we are unable to comprehend that now when the assessee in the present case had in his Memorandum of 8 ITA No.538/Hyd/2024 Appeal/Form No.35 had filed the aforementioned documents as “additional evidence”, viz., Annexure A to Annexure K, then why the said application of the assessee for admission of the same, had not been dealt with and disposed of by the CIT(A) vide a speaking order. We are of the firm conviction that now and when the assessee had filed the aforementioned documents as “additional evidence” before the CIT(A), then the latter ought to have taken up a call as to whether or not the same were to be admitted by him. Be that as it may, we are of the view that even in case, the aforesaid additional documentary evidence were not to be admitted by the CIT(A), he was obligated to have recorded his observations to the said effect in the body of his order. 12. Considering the totality of the facts involved in the present case before us, we are of the view that as the CIT(A) had disposed of the appeal by adopting a half-hearted approach i.e., brushing aside the assessee’s request seeking liberty for admission of additional documentary evidence, therefore, the matter in all fairness required to be revisited by him. We thus, restore the matter to the file of CIT(A) with a direction to re-adjudicate the same. Needless to say, the CIT(A) shall in the course of the set-aside 9 ITA No.538/Hyd/2024 proceedings, deal with and dispose of the assessee’s request for admission of the aforesaid documentary evidence vide a speaking order and adjudicate the matter afresh after affording a reasonable opportunity of being heard to the assessee. 13. Resultantly, the appeal filed by the assessee is allowed for statistical purposes, in terms of our aforesaid observations. 26th मार्च, 2025 को खुली अदालत में सुनाया गया आदेश। Order pronounced in the Open Court on 26th March, 2025. Sd/- Sd/- (श्री मिुसूदन सािडिया) (MADHUSUDAN SAWDIA) लेखा सदस्य/ACCOUNTANT MEMBER S Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Sd Hyderabad, dated 26.03.2025. *TYNM/sps 10 ITA No.538/Hyd/2024 आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Ramineni Venkateswarlu, Gonuguntlavari Palem Vilalge, Pedakancherla Post, Vinukonda Mandalam, Guntur. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward – 1, Narasaraopet. 3. The Principal Commissioner of Income Tax, Visakhapatnam. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, ववशाखापटणम / DR, ITAT, Visakhapatnam. 5. गधर्ाफ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "