Income Tax Appellate Tribunal - Vizag
Simhadri Industries,Vizianagaram vs Income Tax Officer, Ward-1, ... on 24 April, 2026
आयकर अपीऱीय न्यायाधिकरण, विशाखापट्नम बेंच में
IN THE INCOME TAX APPELLATE TRIBUNAL
Visakhapatnam Bench, Visakhapatnam
श्री एस एस विश्िनेत्र रवि, माननीय न्याययक सदस्य एिं श्री ओम्कारे श्िर धचदारा, माननीय ऱेखा सदस्य
SHRI SS VISWANETHRA RAVI, HON'BLE JUDICIAL MEMBER
AND
SHRI OMKARESHWAR CHIDARA, HON'BLE ACCOUNTANT MEMBER
आयकर अपील सं / ITA No.663/Viz/2025
(निर्धा रण वर्ा /Assessment Year:2019-20)
Simhadri Industries Vs. Income Tax Officer
Bobbili Ward-1
Vizianagaram
PAN: ACSFS2747J
(अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)
करदाता का प्रतततितित्व/ : Smt.A.Aruna, Advocate
Assessee Represented by
राजस्व का प्रतततितित्व/ : Shri CVA Rama Rao, Sr.AR
Department Represented by
सुिवाई समाप्त होिे की ततति/ : 22.04.2026
Date of Conclusion of Hearing
घोर्णध की तधरीख/ : 24.04.2026
Date of Pronouncement
ORDER
PER OMKARESHWAR CHIDARA, A.M:
This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ("NFAC"), Delhi in DIN & Order No.ITBA/NFAC/S/250/2025- 2 ITA No.663/Viz/2025 Simhadri Industries 26/1080196189(1) dated 31.08.2025, arising out of order passed by the Ld.AO u/s 147 r.w.s.144 of Income Tax Act, 1961 ("the Act") dated 24.01.2024, pertaining to the assessment year 2019-20.
2. In the above cited appeal, the Income Tax Department has received information relating to Risk Management Strategy formulated by the Board under the head " RMS Non-filing of Return-PAN cases" on ITBA/Insight Portal that the assessee firm made a cash withdrawal of Rs.61.10 crores and also made a cash deposit of Rs.2,200/- during the impugned A.Y.2019-20. The assessee firm has not filed return of income and hence notice u/s 147 of the Act was issued along with show cause notice u/s 148A(b) of the Act was sent through mail. The assessee was requested to file the return and in pursuance of the same, the assessee requested for time of 15 days to file the return of income. But, subsequently, the assessee has not filed any return of income. Subsequent to issuance of notice u/s 147 and 148A, the Ld.AO proceeded with issuance of notices, calling for the purposes of cash withdrawals in their current account to the extent of Rs.61.10 crores. The assessee has failed to furnish any reply to the notices issued by the Ld.AO. As the assessee failed to furnish any explanation with supporting evidences for utilization of cash withdrawals/source of cash deposits in 3 ITA No.663/Viz/2025 Simhadri Industries the bank account maintained with SBI, an addition of Rs.61,10,29,136/- was made while finalizing the assessment.
3. Aggrieved by the addition made by the Ld.AO, an appeal was filed before the Ld.CIT(A), stating that the notice issued u/s 147 is invalid and barred by limitation. In the statement of facts filed before the Ld.CIT(A), the appellant has also stated that the addition towards cash withdrawals/cash deposit are not justified. This appeal was filed before the Ld.CIT(A) with the delay of 129 days. While explaining the delay before the Ld.CIT(A), the appellant has submitted certain copies of medical prescriptions, which are in the name of Ch.Ramesh. Subsequently, there was no response from the appellant despite hearing notices were sent to the appellant. For the final show cause notice, there was not even an adjournment request before the Ld.CIT(A). The Ld.CIT(A) has held that submissions of the appellant were carefully examined and held that there is no substance in the case of the appellant, i.e., the assessee failed to establish "sufficient cause" for delay in filing the appeal in terms of section 249(3) of the Act. The operative portion of the order of the Ld.CIT(A) is reproduced for the sake of clarity as under :
"3.1.2. A careful examination of the submissions of the appellant in this regard indicate that it is the case of the appellant that its 4 ITA No.663/Viz/2025 Simhadri Industries Managing Partner i.e. Sri Ch. Ramesh suffered severe back pain radiating to his legs in the second week of February, 2024 and he was advised by the doctor to take complete bed rest for two months which was subsequently extended to next two months and so he was not able to attend to any other affairs during this period from 10.02.2024 to 15.06.2024 and that as soon as his condition improved he took necessary steps and present appeal was filed on 21.06.2024. Evidently, this submission would have been bearing substantial substance had the case been w.r.t. filing of an appeal in the case of an Individual. But it is a matter of fact that the present case pertains to an entity which is NOT Individual but a Partnership Firm and hence, sole dependence of such entity only on one person is very difficult to comprehend unless the same is fully and conclusively supported by cogent and tangible evidences. A verification in this regard indicates that this claim of the appellant hinges on its submission that it is Partnership Firm with only two partners, however, the appellant has not submitted any evidence in support of this claim. Not even a copy of partnership deed has been submitted. This is very important because, as the relevant evidences in this regard were not brought on record, an attempt was made to look for such details in the ITRs filed by the appellant-firm and, based on the limited details available on record/system it is apparently noticed that the appellant has not filed ITR for any year till date even though it has been submitted that it was constituted in 2014. In addition to this the above mentioned claim of the appellant also hinges on its another submission that its other partner [Sri B K Vatsa] has left to his hometown. However, yet again such claim is noticed to be not supported by any evidence. Hence, the collective consideration of the above details lead to only conclusion that the appellant in the present matter has squarely failed to conclusively establish and substantiate its claim w.r.t. existence of sufficient cause w.r.t. ADMITTED delayed filing of present appeal. Thus, the above details clearly indicate that in the facts and circumstances of the present matter the appellant has squarely failed to establish sufficient cause w.r.t. ADMITTED DELAY in filing of the present appeal.
In the case of Perfect Circle India Ltd. V. ACIT [2020] 120 taxmann.com 262 (Bombay), the Hon'ble High Court, Bombay has held that-period of delay is a factor to be considered while considering a delay condonation application; but more importantly it is the explanation for the delay which is relevant. In the present matter, evidently the submission of the appellant w.r.t. delay condonation 5 ITA No.663/Viz/2025 Simhadri Industries request is found to be inadequate, non-specific and not backed by any specific details and evidences. Hence, the same lacks merit for consideration.
For condonation of delay the existence of "sufficient cause" is sine-qua- non and a condition precedent. In the facts and circumstances of the matter, by no stretch of imagination, it can be said that the appellant, in the present matter, has successfully discharged the statutory onus cast upon it in respect of the admissibility of delayed appeal-which is explicitly required in terms of the provisions of section 249(3) of the Act for a successful condonation thereof. In this regard reliance is placed on the judgement dated 05.08.2024 of the Hon'ble Apex Court in the case of Mool Chandra V. Union of India & Anr. in Civil Appeal Nos. 8435 - 8436 OF 2024 (@S. L. P. (CIVIL) Nos. 2733-2734 of 2024) wherein the Hon'ble Apex Court has held that-if the cause of delay shown is insufficient, irrespective of the period of delay, same would not be condoned.
Under such circumstances, the aforesaid appeal cannot be considered for admission in terms of provisions of section 249(3) and accordingly, it is DISMISSED, in-limine, as NOT ADMITTED, without any discussion on merits or any other aspect, owing to appellant's failure to discharge the statutory onus cast upon it in terms of the provisions of section 249(3) of the Act."
4. From the above, it can be seen that the appeal of the assessee was not considered for admission in terms of provisions of section 249(3) of the Act and accordingly, the same was dismissed in-limine, not admitted without any discussion on merits because, there is failure on the part of the appellant to discharge statutory onus cast upon him in terms of section 249(3) of the Act. Holding so, the Ld.CIT(A) dismissed the appeal of the assessee.
5. The appellant has escalated its appeal to the ITAT and took the following grounds of appeal :
6ITA No.663/Viz/2025
Simhadri Industries
1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
2. The learned Commissioner of Income Tax (Appeals) is not justified in dismissing the appeal in-limine by refusing to condone the delay of 119 days in filing of the appeal.
3. The learned Commissioner of Income Tax (Appeals) ought to have quashed the notice issued u/s 148 of the Act as invalid and the consequent reassessment proceedings as void ab initio.
4. The learned Commissioner of Income Tax (Appeals) ought to have directed the assessing officer to delete the addition of Rs.61,10,29,136 made u/s 69C of the Act towards unexplained cash withdrawals and the addition of Rs.2200 made u/s 69A of the Act towards unexplained cash deposits in bank accounts.
5. Any other grounds may be urged at the time of hearing.
6. From the above, it is observed that the appellant was challenging issuance of notice u/s 148 as well as addition made u/s 69A/69C of the Act. During the appeal proceedings before ITAT, the Ld.AR of the appellant firm filed a paper book containing all the notices issued by the Ld.AO and a copy of the bank statement. The Ld.AR of the appellant has argued that the assessee firm is from a semi urban area and not well versed with the computer system operated notices issued to them. A copy of the bank account of the assessee firm was also filed to demonstrate that the total deposits/withdrawals are less than Rs.1 crore and not Rs.61 crore as held by the Ld.AO. It was argued by the Ld.AR that if a 7 ITA No.663/Viz/2025 Simhadri Industries proper opportunity is given to the appellant, they could substantiate the sources of deposits and withdrawals, which are nothing but the regular business transactions of its jute business. them. The Ld.AR of the appellant has also submitted that the assessee firm is having continuous losses and hence, there was no staff also to attend to the accounts. In view of the same, the assessee could not submit the required details before the Ld.AO/Ld.CIT(A) and this is the reason for filing of appeal before the First Appellate Authority with the delay of 129 days.
7. It was argued by the Ld.AR before ITAT that the Ld.CIT(A) has simply dismissed the appeal in-limine, without adjudicating the issues on merits. Heavy reliance was placed by the Ld.AR on the decision of Hon'ble Bombay High Court in the case of CIT Vs.Prem Kumar Arjundas Luthra (HUF) 297 CTR 614 for the proposition that the Ld.CIT(A) shall compulsorily adjudicate the grounds of appeal on merits also and this First Appellate Authority does not have power to dismiss the appeal in-
limine. Finally, the Ld.AR of the appellant has requested for giving one more opportunity and the appellant will definitely furnish all the required details before the Ld.AO. Prima facie, it can be seen that the total cash deposits/withdrawals are less than Rs.1 crore and it is not known where from, the department has got the information that the appellant 8 ITA No.663/Viz/2025 Simhadri Industries withdrew Rs.61 crore. In view of the same, the Ld.AR of the appellant requested the Bench to remit the issue back to the Ld.AO to meet the ends of justice, where all the facts and details would be furnished.
8. The Ld.DR opposed the plea of sending it back to the file of the Ld.AO and also argued that the appellant does not have any right to explain the issues in the second round, because there is total non- compliance on the part of the assessee with regard to furnishing the details regarding cash deposits and withdrawals. Apart from that there is delay in filing the appeal before the Ld.CIT(A). Thus, there is no compliance of provisions of Income Tax Act by the assessee before the lower authorities. Hence, it was submitted by the Ld.DR that the addition should be confirmed.
9. After hearing both sides, it was decided to remit the issue back to the file of the Ld.AO, because, prima facie the huge addition made by the Ld.AO appears to be incorrect. The Revenue did not give the source of information relating to such huge withdrawal and copy of bank account to the appellant to make such addition of more than Rs.61 crore. A copy of the bank account filed by the Ld.AR of appellant clearly shows that the total deposits/withdrawals during the impugned assessment year are 9 ITA No.663/Viz/2025 Simhadri Industries less than Rs.1 crore. It is a fact that the appellant did not furnish the required details and hence huge addition was made by the Revenue after giving sufficient number of opportunities. But the fact remains that the Revenue could not establish the source of information nor a copy of the bank account was given to the appellant to demonstrate that there are cash deposits/withdrawals of more than Rs.61 crores. In view of the same, the Bench decides to remit the issue back to the file of the Ld.AO, with a direction to get all the details from the appellant with regard to cash deposits/withdrawals. The Revenue is also directed to furnish the information to the appellant with regard to the information received from CBDT with respect to the cash withdrawals of more than Rs.61 crores. An effective opportunity should be given to the appellant to explain all the deposits/withdrawals. The Ld.CIT(A) does not have power to dismiss the appeal in-limine and he has to discuss all the issues on merits, in view of the decision of Hon'ble Bombay High Court in the case of CIT Vs.Prem Kumar Arjundas Luthra (HUF) (supra). The Bench decides to condone the delay of 129 days before Ld.CIT(A), in view of the medical prescriptions filed by the appellant. But the fact remains that there is non-compliance of notices by the appellant. Hence, the Bench decides to impose a cost of Rs.25,000/-, which should be paid within a month to AP 10 ITA No.663/Viz/2025 Simhadri Industries State Legal Services Authority. The appeal is remitted to the file of the Ld.AO and the Ld.AO is directed to give an effective opportunity to the appellant and complete the assessment afresh in view of the above observations.
10. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on 24th April, 2026.
Sd/- Sd/-
(एस एस विश्िनेत्र रवि) (ओम्कारे श्िर धचदारा)
(SS VISWANETHRA RAVI) (OMKARESHWAR CHIDARA)
न्याययक सदस्य /JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER
Visakhapatnam,
dated 24.04.2026.
L.Rama/Sr.PS
11
ITA No.663/Viz/2025
Simhadri Industries
आदे शकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:-
1. निर्धा ऩरती/The Assessee : M/s Simhadri Industries, D..No.22-93, Old Bobbili, Bobbili Municipality, Vizianagaram Dist.
2. रधजस्व/ The Revenue : The Income Tax Officer, Ward-1, Vizianagaram
3. The Principal Commissioner of Income Tax, Visakhapatnam
4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, विशाखापट्नम / DR, ITAT, Visakhapatnam
5. गधर्ा फ़धईल / Guard file आदे शधिुसधर / BY ORDER LOKIREDDI RAMA cn=LOKIREDDI RAMA c=IN o=INCOME TAX APPELLATE TRIBUNAL ou=INCOME TAX APPELLATE TRIBUNAL 2026-04-28 10:47+05:30 Sr. Private Secretary ITAT, Visakhapatnam