SATYA NIRANJANA MURTHY ALLA,HYDERABAD V. INCOME TAX OFFICER, WARD-1, SANGAREDDY

ITA 476/HYD/2025

AI Insights

The case involves Shri Satya Niranjana Murthy Alla, a retired senior citizen with only pension income, who appealed against the order of the CIT (A) confirming the addition of Rs.8,87,948 to his income for the Assessment Year 2017-18. The addition was made by the Assessing Officer, alleging that the deposits in the assessee's bank account were unexplained. The assessee argued that these deposits were from previously withdrawn cash kept for his wife's medical emergencies, particularly during the demonetization period. The Tribunal, after considering the explanations and documents provided, including bank statements showing withdrawals and subsequent deposits, found in favor of the assessee, leading to the deletion of the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 776848 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2025
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2017-2018
• Appeal Filed On: 19-03-2025
• Laws Referred To: Income Tax Act
• Court: TRIBUNAL
• Assessee Lawyers: V. SRIRAMNIVAS
• Keywords: Condonation of delay; Corroborative evidences; Unexplained investment
• Section: 144

Judgement Text

" ITA 476 of 2025 Satya Niranjana Murthy Alla Page 1 of 10 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-B ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.476/Hyd/2025 (िनधाŊरण वषŊ/Assessment Year: 2017-18) Shri Satya Niranjana Murthy Alla, Hyderabad PAN:ABQPA5777R Vs. Income Tax Officer Ward – 1 Sangareddy (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri V. Sriramnivas, Advocate राज̾ व Ȫारा/Revenue by:: Dr. Sachin Kumar, Sr.AR सुनवाई की तारीख/Date of hearing: 10/09/2025 घोषणा की तारीख/Pronouncement: 17/09/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal by the assessee is directed against the order dated 19/07/2024 of the learned CIT (A)/ADDL/JCIT(A)-5 Mumbai, for the A.Y.2017-18. 2. There is a delay of 170 days in filing the present appeal. The assessee has filed a petition for condonation of delay which is supported by an affidavit of the assessee. The learned Counsel for the assessee has submitted that the assessee is a Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 2 of 10 retired senior citizen and having only pension income. The assessee was not aware about the impugned order passed by the learned CIT (A) and came to know only when an SMS alert from the Department was received regarding the settlement of tax dispute under the Direct Tax Vivad-se-Vishwas Scheme (DTVSV) scheme in the month of March, 2025. He further submitted that the Assessing Officer has made the addition of Rs.8,87,948/- on account of deposit in the bank account of the assessee, whereas the source of the said deposit was already explained by the before the learned CIT (A) by furnishing the bank account statement of the assessee as well as the relevant details of withdrawals by the assessee which was redeposited during the demonetization period. The learned CIT (A) has confirmed the additions made by the Assessing Officer for want of any documentary evidence to establish the genuineness of the transaction whereas the assessee produced all the relevant documents and details to explain the source of the deposits in the bank account. The learned Counsel for the assessee has further submitted that if the delay in filing the appeal is not condoned, the assessee would suffer an irreparable loss as the Assessing Officer has made addition of the entire deposits in the bank account without considering the source of the said deposits as withdrawal from the bank account. He has referred to the medical record of the wife of the assessee and submitted that the assessee was required to keep the cash for medical emergency of the wife and during the demonetization period, the cash was deposited in the bank account. Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 3 of 10 3. On the other hand, the learned DR has submitted that the assessee was very much aware about the proceedings pending before the learned CIT (A) and filed the reply from time to time and the last reply was filed on 05/07/2024, therefore, the assessee cannot take the plea of no knowledge of the impugned order passed by the learned CIT (A). 4. In rejoinder, the learned Counsel for the assessee has submitted that the Tax Consultant has filed the reply as well as represented before the learned CIT (A). However, the impugned order was not served on the assessee and therefore, the assessee was not aware about the impugned order passed by the learned CIT (A). 5. We have considered the rival contentions as well as the relevant material available on record. The assessment order was passed by the Assessing Officer ex-parte u/s 144 of the Act thereby the entire deposits in the bank account of the assessee was assessed to tax u/s 69A of the I.T. Act as unexplained investment. The assessee explained the circumstances under which the assessee has withdrawn the cash from the bank account as to meet the emergency medical expenditure of the wife of the assessee undergoing the treatment of cancer. Therefore, in these circumstances when the assessee was attending the wife suffering from cancer and undergoing the treatment and in the absence of any record to show that the impugned order passed by Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 4 of 10 the learned CIT (A) was served upon the assessee, we do not find any reason to disbelieve the cause of the delay explained by the assessee that only in the month of March, 2025, the assessee received an SMS Alert Message from the Department for availing the benefit of DTVV scheme to settle the outstanding tax disputes. Accordingly, in the interest of justice, the delay of 170 days in filing the appeal is condoned. 6. The assessee has raised the following grounds of appeal: Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 5 of 10 7. The learned Counsel for the assessee has submitted that the assessee has already explained the source of the deposits as withdrawal made from the bank account which was kept by the assessee for emergency medical requirement of cancer treatment of the wife, but once the demonetization was declared, the assessee deposited a sum of Rs.5,55,000/- on 10/11/2016. He has referred to the statement showing the details of withdrawals and deposits of cash in the bank account placed at page No.20 of the paper book as well as the bank account statement of the assessee where all the transactions of the withdrawal and deposits are reflected. He has further submitted that when there is no other source of income of the assessee except the pension income and the past savings, the source explained by the assessee cannot be denied. Thus, he has pleaded that the addition made by the Assessing Officer and confirmed by the learned CIT (A) should be deleted. 8. On the other hand, the learned DR has submitted that the assessee has not filed any return of income and also not produced any evidence before the Assessing Officer to explain the source of the cash deposits in the bank account. He has further submitted that the learned CIT (A) has also recorded the fact that the assessee failed to produce the evidence to substantiate the source of deposits in the bank account. The learned DR has referred to the bank account statement of the assessee and submitted that the explanation of the assessee that the cash was Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 6 of 10 kept for the medical emergency treatment of his wife is not acceptable when immediately after the deposits of Rs.5,55,000/-, the same was transferred to fixed deposit. He has relied upon the orders of the authorities below. 9. We have considered the rival contentions as well as the relevant material available on record. Before the Assessing Officer, the assessee has explained the source of the deposits as the earlier withdrawal from the bank account. These details including the copy of the bank account were also filed before the Assessing Officer as recorded in para 3 of the assessment order as under: Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 7 of 10 10. Thus, the assessee clearly explained the source that there was a withdrawal of Rs.5,00,000/- from the SBI Account on 04/03/2016 out of which a deposit of Rs.1,70,000/- was made on 02/08/2016. The assessee also explained that due to his wife’s old age, she could not go to the Bank and did not deposited the same in the bank account. Before the learned CIT (A), the assessee filed all the relevant details and evidence including the bank account statement as well as the detailed statement of the cash withdrawals and deposits. The learned CIT (A) has given the details of the reply filed by the assessee in para 3 of the impugned order as under: Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 8 of 10 11. We further note that the assessee filed these details vide his reply dated 05/07/2024. Earlier also, the assessee filed the details in response to the notice vide reply dated 25/08/2020, the acknowledgement of the same is placed at page Nos. 35 & 36 of the paper book. Thus, from these replies and documents filed by the assessee, it is clear that all the relevant details were available before the learned CIT (A). The assessee has also filed the statement showing the cash withdrawn and cash deposits placed at page No.20 of the paper book read as under: Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 9 of 10 12. The Assessing Officer has not disputed the transactions of withdrawals from the bank account by the assessee on the previous occasions. The learned CIT (A) has declined to accept the source of the earlier withdrawal for the subsequent deposits on the ground that the assessee failed to furnish the return of income and also failed to furnish the relevant supporting evidence to explain the source of the deposits. It is pertinent to note that when the transactions in the bank itself reflect the nature of the transaction of withdrawal as well as deposits, then in the absence of any other source of income of the assessee, the prior withdrawal from the bank account cannot be denied as a source of subsequent deposits and that too when the specified bank notes (SBN) after demonetization were mandatorily required to be deposited in the bank account. Accordingly, in the facts and circumstances of the case, when the withdrawals as reflected in the bank account of the assessee are not in dispute, then the source of the said money available with the assessee cannot be disputed for the subsequent deposits in the bank account. As regards the non-filing of the return of income, it is also not in dispute that the income of the assessee from pension is below the threshold limit of taxable income and therefore, the non-filing of return of income cannot be taken adversely against the assessee. Hence, we are satisfied that the assessee was able to explain the source of the deposits and consequently, the addition made by the Assessing Officer is deleted. Printed from counselvise.com ITA 476 of 2025 Satya Niranjana Murthy Alla Page 10 of 10 13. In the result, appeal filed by the assessee is allowed. Order pronounced in the Open Court on 17th September, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 17th September, 2025. Vinodan/sps Copy to: S.No Addresses 1 Shri Satya Niranjana Murthy Alla, LIG 873, BHEL, RC Puram, Sangareddy, Hyderabad 503032 2 Income Tax Officer Ward -1 Aayakar Bhavan, Veerbhadranagar, Sangareddy 50200 Hyderabad 3 Pr. CIT – Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order Printed from counselvise.com "