YEDDULA VENKATA NARAYANA REDDY vs. ITO

Parties Involved

Facts Summary

The Income Tax Department received information that the late assessee had deposited ₹4,057,000 in his HDFC Bank account No. 83 to 57 at Hospet during the demonetisation period. As the assessee had not filed a return of income, a notice under section 143(1) of the Act was issued, followed by a notice under section 142(1) sent by speed post. The assessee did not file a return. The Assessing Officer then obtained the assessee’s bank statement under section 133(6) of the Act. It showed cash deposits of ₹1,555,844 during the demonetisation period and total cash deposits of ₹4,688,345 during financial year 2016–17. Despite several notices issued during the assessment proceedings, the assessee did not respond. A reference was therefore made under section 144A for directions, and the Additional Commissioner directed that the assessment be completed after issuing a show-cause notice. The Assessing Officer accordingly issued a show-cause notice, but received no response. The Assessing Officer therefore added ₹4,658,345 under section 69A read with section 115BBE of the Act and passed the assessment order on 30 September 2019.…

Legal Issues

• 1. The Order of the Authorities below, in so far as these are against the appellant, is opposed to law, weight of the evidence, probabilities, facts and circumstances of the Appellant’s case.
• 2. The appellant denies himself to be liable to be assessed on a total income of Rs. 46,88,345/- as against the actual income of Rs. Nil as per the facts and circumstances of the case.
• 3. A. The Learned authorities erred in treating cash deposits of Rs. 46,88,345/- as unexplained money under Section 69A, completely ignoring the documented evidence of the Appellant's 75.77 acres of land and the exempt nature of his agricultural income under Section 10(1). B. The Learned authorities erred in law by treating the entire deposit as current year income, failing to appreciate that a sum of Rs.31,32,501/- was deposited prior to the demonetization period and Rs.15,55,844/- during the said period, both of which originated from accumulated agricultural savings of the current and preceding years C. The Learned authorities erred in classifying the agricultural receipts as "Income from Other Sources" despite the Appellant providing RTC records for 75 Acres and 77 Cents of irrigated land, which clearly substantiate the capacity to generate the impugned agricultural income.
• 4. The learned authorities erred in dismissing the appeal on technical grounds of delay without considering the "sufficient cause" caused by the Appellant’s serious illness, his subsequent demise, and the Representative Assessee’s lack of technical knowledge in filing the revised Form 35.

Judgment Outcome

Decided in favour of Assessee.

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