YELUVAHALLI VENKATESHAPPA LAKSHMAN,BANGARAPET V. INCOME TAX OFFICER, WARD-1, KOLAR

ITA 1530/BANG/2025

AI Insights

The case involves Shri Yeluvahalli Venkateshappa Lakshman, a trader in fresh vegetables, particularly potatoes, who appealed against the order of the National Faceless Appeal Centre (NFAC), which had dismissed his earlier appeal for non-prosecution. The original assessment by the Income Tax Officer (ITO) was based on substantial cash deposits in the assessee's bank account, leading to an estimated addition to his income. The CIT(A) dismissed the appeal due to the assessee's failure to respond to notices, which the assessee later attributed to miscommunication through his accountant. The Tribunal found that the CIT(A) erred in dismissing the appeal without considering the merits and restored the case for a substantive hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773541 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 10-07-2025
• Other Referred Cases: 118 ITR 461
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R. GHALE
• Assessee Lawyers: NADEEM LASANI
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT ITA No.1530/Bang/2025 Assessment year : 2015-16 Shri Yeluvahalli Venkateshappa Lakshman, Yaluvahalli, Bangarpet – 563 114. PAN: AFEPL 6101L Vs. The Income Tax Officer, Ward 1, Kolar. APPELLANT RESPONDENT Appellant by : Shri Nadeem Lasani, Advocate Respondent by : Shri Ganesh R. Ghale, Advocate Date of hearing : 22.09.2025 Date of Pronouncement : 25.09.2025 O R D E R 1. This appeal is filed by Shri Yeluvahalli Venkateshappa Lakshman (the assessee/appellant) for the assessment year 2015-16 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 16.6.2025 wherein the appeal filed by the assessee against the assessment order dated 21.3.2023 passed u/s. 147 r.w.s. 144B of the Income-tax Act, 1961 [the Act] by the Assessment Unit, Income Tax Department was dismissed. Printed from counselvise.com ITA No.1530/Bang/2025 Page 2 of 5 2. The assessee is aggrieved and in appeal before us.. 3. Briefly stated facts of the case show that assessee is a trader in fresh vegetables and owns a mandi at Agricultural Produce Marketing Committee [APMC] Yard, Bangarpet. Assessee is a trader in Potatoes during the year having a turnover of Rs.1,05,37,464 resulting into net profit of Rs.2,33,265. Information was received that assessee has made cash deposit in SB A/c with ICICI Bank Ltd., Kolar of Rs.94,61,122 and therefore notice u/s. 148 of the Act was issued on 30.3.2022. Assessee was issued several notices and a show cause notice to explain the details of cash deposit. It was noted that assessee has not filed any income-tax return during the year. However, in response to notice u/s. 148, assessee has filed return of income declaring total income of Rs.2,34,311. Show cause notice shows that assessee has turnover for 3 years and net profit is also in the range of 8 to 9%. As the assessee failed to make any explanation, it was asked that why profit on the sale of Rs.1,05,37,764 should not be considered at 10% and a sum of Rs.10,53,776 should not be added to the total income of the assessee. 4. The assessee submitted that he is a villager from a small village and doing business of trader in fresh vegetables, particularly Potatoes in the name & style of Laxman Traders. He was having a shop in the Mandi. It was submitted that he has purchased Potatoes of Rs.99,18,381 and sold them for Rs.1,05,37,764 earning a Net Profit of Rs.2,33,265. His income was below taxable limit. He submitted cash book and sales book, purchase register, details of expenditure, etc. The assessee also Printed from counselvise.com ITA No.1530/Bang/2025 Page 3 of 5 submitted the cash summary. He submitted that sale of Potatoes is generally made in cash. He mentioned that he has made sales of Rs.48,78,200 and withdrawn cash from the bank a/c of Rs.57,65,378. He also stated that his expenses are mostly in cash. The ld. AO disbelieved the statement and made an addition of Rs.8,20,511 by estimating the net profit @ 10% of total amount on sale of Rs.1,05,37,765 by reducing the actual profit shown by the assessee at Rs.2,33,265. Accordingly the total income was assessed at Rs.10,54,822. 5. The assessment order was challenged before the ld. CIT(A) who passed the order on 16.6.2025. The ld. CIT(A) noted that assessee has been issued several notices 4 times, but did not respond to any of the notices and therefore he dismissed the appeal of the assessee for non- prosecution by relying on the decision of Hon’ble Supreme Court in 118 ITR 461. 6. The assessee is aggrieved with the same and has preferred this appeal. 7. The assessee reiterated the same facts stating that he is a villager, while filing Form 35 he gave email id of [e-mail], which did not belong to him, but of an Accountant, who neither informed the assessee of any such notice. When the appellate order was passed, he came to know about the dismissal of the appeal ex parte. He submits that the CIT(A) has dismissed the appeal of the assessee for non- prosecution. This appellate order was received by Mr. Nadeem Lasani, Advocate appearing on behalf of the assessee. Printed from counselvise.com ITA No.1530/Bang/2025 Page 4 of 5 8. The ld. DR, Shri Ganesh Ghale, Advocate, vehemently supported the order of ld. lower authorities. 9. We have carefully considered the rival contentions and perused the orders of the ld. lower authorities. Admittedly in this case the appeal of the assessee has been decided by the ld. CIT(A) not on the merits, but stating that assessee is not interested in prosecuting the appeal and therefore it was dismissed. We are of the view that the ld. CIT(A) does not have any power to dismiss the appeal for non-prosecution. He has to decide the appeal only on its own merits. In view of the above facts, we restore this appeal back to the ld. CIT(A) with a direction to the assessee that as soon as window is available, necessary representation before the CIT(A) should be made, if he wants the assessee for hearing, same should also be availed and thereafter the ld. CIT(A) should decide the issue on its merits. 10. Accordingly, the appeal by the assessee is allowed for statistical purposes. Pronounced in the open court on this 25th day of September, 2025. Sd/- ( PRASHANT MAHARISHI ) VICE PRESIDENT Bangalore, Dated, the 25th September, 2025. /Desai S Murthy / Printed from counselvise.com ITA No.1530/Bang/2025 Page 5 of 5 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 "