SESHAM RAMANAIAH,PRAKASAM V. ITO., WARD-1, ONGOLE

SA 20/HYD/2025

AI Insights

The case involves Sesham Ramanaiah, an agriculturist, who faced an increased tax demand for the assessment year 2016-2017 after his income was reassessed significantly higher than what he declared. Initially, Ramanaiah did not file a return as he believed he had no taxable income. Upon reassessment under sections 147 and 148 of the Income Tax Act, 1961, his income was assessed at Rs.85,43,584, leading to a demand of Rs.1,59,30,799. Ramanaiah contested this demand, citing financial difficulties and arguing that the reassessment was unjust and not supported by adequate consideration of his documents. The Tribunal, while dismissing the stay application, scheduled an early hearing to address the merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705568 (ITAT-HYDERABAD)
• Appeal Type: Stay Application
• Pronouncement Date: 04-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2016-2017
• Other Referred Cases: Soul vs Dy CIT, M/s Valvoline Cummins Ltd vs. CIT and Ors, Tanuja Developers and Infrastructure Ltd vs. Asst CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SACHIN KUMAR
• Assessee Lawyers: VENKATA SUSEELA
• Keywords: Unexplained investment; Principle of natural justice; Recovery proceedings; Application of stay

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER Stay Application No.20/Hyd./2025 Arising out of ITA.No.1062/Hyd./2025 - Assessment Year 2016-2017 Sesham Ramanaiah, Kothamissin Bazar, DARSI. Prakasam Dist. PIN – 523 247. PAN AZIPR0354H vs. The Income Tax Officer, Ward-1, ONGOLE. (Applicant) (Respondent) For Assessee : MS Venkata Suseela Chennuri, Advocate For Revenue : Dr. Sachin Kumar, Sr. AR Date of Hearing : 04.07.2025 Date of Pronouncement : 04.07.2025 ORDER PER MANJUNATHA G. : By this stay application SA.No.20/Hyd./2025 the assessee seeks for stay of collection of outstanding demand. 2. MS. Venkata Suseela Chennuri, Advocate- Learned Counsel for the Assessee, submitted that, the assessee is an agriculturist and having income from commission towards the sale of paddy etc., and that, he was 2 SA.No.20/Hyd./2025 not having taxable income during the assessment year 2016-2017 and as such, he has no obligation to file return of income u/sec.139(1) of the Income Tax Act, 1961. Subsequently, the Assessing Officer has reopened the assessment u/sec.147 of the Act and issued notice u/sec.148 of the Act. In response, the assessee filed his return of income declaring an income of Rs.3,98,584/- . The Assessing Officer completed the assessment u/sec.147 r.w.s.144 r.w.s.144B of the Act vide order dated 15.03.2024 by determining the total income of the assessee at Rs.85,43,584/- by making additions of Rs.25 lakhs u/sec.69A of the Act and addition of Rs.56,45,000/- u/sec.69 of the Act as unexplained investment, without appreciating the relevant documents, details filed by the assessee. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the learned CIT(A) and the learned CIT(A) vide order dated 23.05.2025 sustained the additions made by the Assessing Officer, without considering the explanation submitted by the assessee along with relevant documentary evidences. 3 SA.No.20/Hyd./2025 2.1. The Learned Counsel for the Assessee submitted that, the assessee has been facing huge financial difficulty and a tight liquidity position. The situation is very precarious and the assessee is unable to make any payment of taxes and that the addition made of Rs.85,43,584/- against the taxable income admitted of Rs.3,98,584/- is more than 21 times and the demand raised of Rs.1,59,30,799/- is double to the income assessed which is against to the Principles of natural justice and is against to the financial capacity of the assessee and as per the instructions contained in para-2 of the CBDT Circular No.96 dated 21.08.1969, which would show that, where the income determined is substantially higher than the returned income, (i.e 21 times) and where the collection of tax in dispute may please be considered to keep in abeyance till the decision of the appellant, which view is supported by the decision of (i) Hon'ble Delhi High court in the case of Soul vs Dy CIT(2008) 220 CTR (Del) 211, (ii) M/s Valvoline Cummins Ltd vs. CIT and Ors.(2008) 217 CTR (Del) 292 and (iii) Tanuja Developers and Infrastructure Ltd vs. Asst CIT 4 SA.No.20/Hyd./2025 (Del) (2009) 222 CTR (Del) 521. In view of the aforesaid submissions, the Learned Counsel for the Assessee submitted that, the Hon'ble Tribunal may be pleased to grant stay of recovery of demand till the appeal filed by the applicant is heard and decided by the Hon'ble Tribunal and direct the Commissioner of Income-tax and his subordinates to restrain from taking any further action as regards recovery of tax, interest and penalty leviable for the relevant Assessment Year. In the alternative, the Learned Counsel for the Assessee submitted that, an early hearing may please be granted in the interest of substantial justice. 3. Dr. Sachin Kumar, Learned Sr. AR for the Revenue, on the other hand, strongly opposed for stay of collection of outstanding demand. However, not objected for early hearing of the appeal. 4. We have heard both the parties, perused the material on record and the orders of the authorities below. Considering the facts and circumstances of the case, we reject the stay application filed by the assessee. However, we 5 SA.No.20/Hyd./2025 are inclined to grant an early hearing of the case and direct the Registry to list the appeal for hearing on 17.07.2025. The Department is directed not to take any coercive steps till the date of hearing of the appeal. Since the date of hearing of the appeal is announced in the open Court, no notice will go to the parties. Accordingly, the stay application of the assessee is disposed of. 5. In the result, stay application of the assessee is dismissed. Order pronounced in the open Court on 04.07.2025. Sd/- Sd/- [VIJAY PAL RAO] [MANJUNATHA G] VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 04th July, 2025 VBP Copy to 1. Sesham Ramanaiah, 5-1360, Kurichedu Road, Kothamissin Bazar, Darsi Mandal, Prakasam District. 2. The Income Tax Officer, Ward-1, Ongole. 3. The Pr. CIT, GUNTUR, State of Andhra Pradesh 4. The DR ITAT “B” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// "