THIBBANAHALLI APPAJI GAYATHRI,BANGALORE V. DCIT, CENTRAL CIRCLE-1(3), BENGALURU

ITA 2939/BANG/2025

AI Insights

The case involves Smt. Thibbanahalli Appaji Gayathri, the appellant, contesting an assessment order from the Assistant Commissioner of Income Tax, which added a substantial amount as unexplained cash credit under section 68 of the Income Tax Act. The primary contention was the non-receipt of proper notice, as the notices were sent via email despite the assessee's explicit instruction in Form No. 35 not to receive communications this way. The Income Tax Appellate Tribunal found merit in the appellant's argument regarding the notice procedure and restored the case to the CIT 3 A for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846289 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Bangalore
• Assessment Year: 2017-2018
• Appeal Filed On: 15-12-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN
• Assessee Lawyers: SUMAN LUNKAR
• Keywords: Unexplained cash credit
• Section: 144; 68; 133A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE – PRESIDENT AND SHRI SOUNDARARAJAN K., JUDICIAL MEMBER ITA No. 2939/Bang/2025 Assessment Year: 2017-18 Smt. Thibbanahalli Appaji Gayathri, 121 Madilu, 1st Main Road, 1st Block, 2nd Stage, Nagarabavi, Bangalore – 560 072. PAN: ACKPG7423R Vs. The DCIT, Central Circle – 1 (3), Bangalore. APPELLANT RESPONDENT Assessee by : Smt. Suman Lunkar, Advocate Revenue by : Shri Subramanian – JCIT DR Date of Hearing : 12-02-2026 Date of Pronouncement : 25-03-2026 ORDER PER PRASHANT MAHARISHI, VICE – PRESIDENT 1. ITA No. 2939/Bangalore/2025 is filed by Smt. Thibbanahalli Appaji Gayathri (the assessee/appellant) against the appellate order passed by The Principal Commissioner Of Income Tax (Appeals) – 11, Bangalore (The Learned CIT – A ) on 29th of October 2025 wherein the appeal filed by the assessee against the assessment order passed by The Assistant Commissioner Of Income Tax, Central Circle – 1 (3), Bangalore (the learned AO) Printed from counselvise.com ITA No. 2939/Bang/2025 Page 2 of 6 passed under section 143 (3) of The Income Tax Act [ The ACT] on 25 December 2019 wherein the total income of the assessee was assessed at ₹ 10,081,590 against the returned income of ₹ 1,847,730/–, was dismissed 2. The assessee is in appeal aggrieved with the confirmation of addition of ₹ 8,233,860 as unexplained cash credit under section 68 of the act holding that a sum of ₹ 7,173,864 is excessive cash and the source of ₹ 1,060,000 was not properly explained without proper hearing opportunity. 3. The brief fact of the case shows that the assessee is an individual who filed her return of income on 31st of March 2018 at a total income of ₹ 1,847,730/–. The return of income was picked up for scrutiny. The notice under section 143 (2) of the act was issued on 4 September 2018. The learned assessing officer raised questionnaire to the assessee, which was not replied, and further notice was also issued on 26 November 2019 proposing to complete the assessment under section 144 of the act, the assessee did not reply. 4. During the assessment proceedings the AO noted that in bank account No. 143 of the assessee, a sum of ₹ 3,973,000 is deposited. The notice under section 133 (6) was sent to the respective bank branches to obtain the details. One of the branches has reported that there is a wrong reporting cash deposited but there is no such deposit. One of the banks also stated that one bank account is shown twice in the report. 5. However, the learned assessing officer held that a sum of ₹ 4,473,000 is deposited in account No. 249 during demonetization period and ₹ 5,893,000 has been deposited during the year other than demonetization period. Further sum Printed from counselvise.com ITA No. 2939/Bang/2025 Page 3 of 6 of ₹ 1,75,000 has been deposited in account No. 291. Further cause notice was issued. 6. In response to the show cause notice, assessee submitted a reply stating that the assessee has shown a cash of Rs 1, 40,36,197 on hand as on 31st of March 2016, a sum of ₹ 55 lakhs is received on 26 October 2015 from Nagarjuna Srinivasa and Venkata Ramaiah and sum of ₹ 50 lakhs was received on 15 December 2016 as land advance from another party. 7. The learned assessing officer noted that there is no confirmation available with the assessee about theses transaction and there is no evidence about the opening cash on hand as on 31st of March 2016. The learned assessing officer also noted that with respect to the sum of ₹ 50 lakhs on 15/12/2016 received by the assessee as land advance is shown in the sale deed of the transaction, Therefore, he accepted the cash deposited in the bank account to that extent. 8. The learned AO thereafter noted that that assessee was covered in the survey proceedings under section 133A of the act on 10 May 2018 wherein certain incriminating documents were found. It was found that there is an excess amount of cash in relation to value shown in the balance sheet amounting to ₹ 7,173,864. Further the learned assessing officer noted that out of the cash deposit of ₹ 6,060,000 in the bank account the assessee could explain the source of only ₹ 50 lakhs and therefore the balance sum of ₹ 1,060,000 is to be added under section 68 of the act. Accordingly in assessment order, total addition of ₹ 8,233,860 was made in the hands of the assessee. 9. The assessment order was challenged before the learned CIT – A. Wherein the learned CIT – A noted that assessee has been Printed from counselvise.com ITA No. 2939/Bang/2025 Page 4 of 6 issued four notices but none of them is complied with and therefore he dismissed the appeal of the assessee stating that there is no infirmity in the addition made by the learned assessing officer. 10. Therefore, assessee is in appeal before us. The learned authorized representative submitted that all these notices have been received through email by the assessee perhaps. But in form No. 35 the assessee did not opt for receiving notices through email. Therefore, none of these notices were received by the assessee and in absence of any receipt of such notices the assessee could not respond to them and therefore the assessee did not get proper opportunity of hearing. 11. The learned departmental representative Shri Subramaniam S, The Joint Commissioner of Income Tax, vehemently submitted that the learned CIT – A is only authorized to issue the notice through email. The notices have been issued on the email address provided by the assessee in form No. 35. Therefore, there is no merit in the contention of the assessee. As the assessee has remained non-compliant before the learned CIT – A, the assessee does not deserve any relief. 12. We have carefully considered the rival contention and perused the orders of the learned lower authorities. We find that in form No. 35 the assessee has mentioned the email address however whether the notices and communication may be sent an email, the assessee has specifically stated “no\". Despite the above fact, the learned CIT – A has issued notices to the assessee on email address. Though the notices are successfully delivered on the email ID of the assessee, but as per form No. 35 as the assessee has stated that she does not want to receive the Printed from counselvise.com ITA No. 2939/Bang/2025 Page 5 of 6 notices through email, therefore, the learned CIT – A should have made another provision for issue of such notices. If there is no provision for issuing notices in such cases to the assessee through email, then there is no reason for giving such an option. The assessee cannot be found fault in such circumstances. 13. In view of the above facts, we restore the whole appeal back to the file of the learned CIT – A with a direction to the assessee to submit the reply and information in support of grounds of appeal raised. The learned CIT – A may consider the same on its merit and then decide the issue afresh. As agreed by the ld AR, The Notices may be served to the assessee in accordance with the law through email mentioned in Form No 35 now. 14. In the result appeal filed by the assessee is allowed for statistical purposes Order pronounced in the open court on 25th March, 2026. Sd/- (SOUNDARARAJAN K.,) Sd/- (PRASHANT MAHARISHI) JUDICIAL MEMBER VICE-PRESIDENT Bangalore, Dated, the 25th March, 2026. *TNTS* Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR, ITAT, Bangalore 5. CIT(A) Printed from counselvise.com ITA No. 2939/Bang/2025 Page 6 of 6 By order Assistant Registrar, ITAT, Bangalore Printed from counselvise.com "