SRINIVASAMURTHY ARKUNDA NIRANJAN,ARKUNDA VILLAGE V. ITO WARD 1, CHICKBALAPUR

ITA 2133/BANG/2024

AI Insights

The case involves Srinivasamurthy Arkunda Niranjan, a small vegetable vendor and an uneducated individual from a village in Gauribidanur Taluk, who appealed against the orders of the National Faceless Appeal Centre (NFAC) and the AO regarding the assessment of his income for the year 2017-18. The AO had made an addition of Rs.2,55,39,640 to the assessee's income, which was deemed unexplained cash deposit in his bank accounts. The assessee contended that the deposits were from his business transactions and not unexplained income. The Tribunal found that the assessee had not been given a proper opportunity to explain his case at earlier stages and thus restored the matter to the AO for a fresh assessment after considering the necessary documents and explanations from the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711203 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHIVAKUMAR G.; ASSESSMENT
• Section: 148; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.2133/Bang/2024 Assessment year: 2017-18 Srinivasamurthy Arkunda Niranjan, 57, Arkunda Village, Pura Post, Gauribidanur Taluk, Chikkaballapura – 561 208. PAN: ASFPN 7345C Vs. The Income Tax Officer, Ward 1, Chikkaballapura. APPELLANT RESPONDENT Appellant by : Shri Shivakumar G., CA Respondent by : Shri Subramanian, Jt.CIT (DR)(ITAT), Bengaluru. Date of hearing : 02.07.2025 Date of Pronouncement : 23.07.2025 O R D E R Per Prashant Maharishi, Vice President 1. This appeal is filed by Srinivasamurthy Arkunda Niranjan (the assessee/appellant) for the assessment year 2017-18 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 12.8.2024 wherein the appeal filed by the assessee against the assessment order passed on 16.3.2022 was dismissed. Printed from counselvise.com ITA No. 2133/Bang/2024 Page 2 of 5 2. The assessee is aggrieved and is in appeal before us. 3. The solitary ground in this appeal is that the assessee did not get proper opportunity to explain the case before the ld.AO and before the ld. CIT(A). It was submitted that the amount of cash deposit by the assessee in Axis Bank & HDFC Bank are also withdrawn for payment to the agriculturists for purchase of vegetables & fruits and whole of the deposit could not have been deemed to be the income of the assessee chargeable to tax u/s. 69A of the Income Tax Act, 1961 [the Act]. It was further stated that non-compliance of the assessee is not wilful. The assessee is an uneducated residing in a small village in Gauribidanur Tq. of Chikkaballapur Dist. and does not have any advisor to guide him for the income tax issue. 4. The brief facts show that AO was in possession of information that assessee has made deposit of Rs.2,55,39,640 in his bank account during the year. The assessee did not file any return of income and therefore notice u/s. 148 was issued on 25.8.2021. Subsequently notices were issued u/s. 142(1) of the Act with detailed questionnaire to explain the source of huge cash deposit. The assessee did not furnish any information, accordingly a show cause notice was also issued, but assessee did not remain present. Therefore assessment order u/s. 144B r.w.s. 144 of the Act was passed wherein the addition of Rs.2,55,39,640 was made to total income of assessee by assessment order dated 16.2.2022. Printed from counselvise.com ITA No. 2133/Bang/2024 Page 3 of 5 5. The assessee preferred appeal before the ld. CIT(A). However no information was furnished before the ld. CIT(A) and therefore the order was passed by the ld. AO was confirmed. 6. The appeal was filed before us late by 8 days for which the assessee submitted that as assessee is a small vegetable vendor and is not educated and also not computer savvy, he was not aware that the order of the ld. CIT(A) is not sent by post, but by putting into ITBA portal. The assessee therefore could not take further action, but came to know only when he was made aware that tax of Rs.3.39 crores is to be paid. He immediately filed the appeal which has caused the delay of 8 days. 7. The ld. DR objected to delay in filing of appeal. 8. We have carefully considered the rival contentions and find that the delay is nominal and looking to the facts and circumstances of the case, it cannot be malafide or intentional. Accordingly we condone the delay of 8 days and admit the appeal of the assessee. 9. The only ground of appeal is that he did not get proper opportunity of hearing before the ld. AO and further before the ld. CIT(A). The ld.AR submits that assessee is an illiterate and a small vegetable vendor who makes payment to agriculturists for purchase of vegetables & fruits. Further the sale realisation is also deposited in the bank account. He therefore submitted that addition of above sum is not proper. He further explained that assessee is carrying on the business of vegetable vendor. We find that assessee was issued several notices, but assessee Printed from counselvise.com ITA No. 2133/Bang/2024 Page 4 of 5 did not respond. Even when one of the notices was sent by registered post which was received by the assessee. Notices were also issued to the assessee through email. This resulted non-compliance by the assessee resulting into addition of Rs.2,55,39,640. Even before the ld. CIT(A), assessee was issued notices, but no response was received and therefore both the assessing and appellate authorities passed the order ex parte. 10. We find that the ld. CIT(A) issued 3 notices within 2 months and disposed of the appeal of the assessee. The assessee also stated before the ld. CIT(A) in Form 35 that the Advocate of the assessee has passed away. This was considered by the ld. CIT(A) in condoning the delay in filing of the appeal before him of 383 days. Therefore there is no cause with assessee to not to represent his case before ld. CIT (A). Assessee also did not represent his case before the ld. AO. But he has made representation before us. Thus , there is no point in restoring appeal to the file of the ld. CIT (A). Thus, we restore the appeal back to the file of the ld. AO and direct the assessee to deposit Rs 1000/- [ Rs. One Thousand Only] as cost to the Prime Minister’s National Relief Fund within 30 days from the date of receipt of this order. 11. Looking to the nature of activities of the assessee, in the interest of justice, the issue is restored to the file of the ld. AO with a direction to the assessee to furnish details of deposit of cash in his bank account within 90 days from the date of this order. The ld. AO may consider the explanation of the assessee by examining the bank statement which Printed from counselvise.com ITA No. 2133/Bang/2024 Page 5 of 5 was not called for by the AO during the course of assessment proceedings also and then decide the issue afresh. The bank statement of the assessee will show that what for the cash is deposited in the bank account and where it is used. Thereafter giving an opportunity of hearing to the assessee, the issue of taxability of the above sum may be decided afresh. 12. In the result, the appeal of the assessee is allowed for statistical purposes. Pronounced in the open court on this 23rd day of July, 2025. Sd/- Sd/- (KESHAV DUBEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE PRESIDENT Bangalore, Dated, the 23rd July 2025. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. Printed from counselvise.com "