No Revision of Returns through Appeals: Kerala HC on Additional Evidence in 69A Cases
SRAVAN KUMAR NEELA vs. Assistant Commissioner of Income Tax. (ITA Nos.58 and 59 of 2024)
Facts:
1. On 19 July 2016, during an excise operation at Muthanaga Check Post, a sum of ₹ 2,39,57,500 was seized from three passengers (Sravan Kumar Neela, Uma Maheshwara Rao Chinni, and K. Ganesh Kumar) traveling by a private bus from Hyderabad to Kozhikode.
2. Subsequently, assessee submitted letters declaring the entire cash seized (Sravan’s share: ₹ 1,62,47,500; Uma’s share: ₹ 77,10,000) as income from “other sources” for the financial year 2016-17.
3. The assessing authority treated these amounts as “unexplained income” under Section 69A of the Income Tax Act and levied tax under Section 115BBE.
4. The assessee tried to bring on record additional evidence: bank/financial statements of a partnership firm, returns of certain family members etc., to explain the source of the cash.
5. The appellate authorities declined to accept that additional evidence, on the ground that doing so would amount to effectively revising the voluntarily filed return. Therefore, the appeal was rejected.
Hon Kerala HC held as under:
1. Under Rule 46A of the Income Tax Rules, additional evidence can be admitted in appellate proceedings only under specific circumstances (e.g., where the AO prevented assessee from producing evidence earlier, or the evidence was not available at that time).
2. In this case, the assessees had voluntarily declared the cash as income in their returns. Only later did they attempt to retract and explain sources via affidavits.
3. Once the assessees themselves admitted the cash as their income, the Department was justified in treating it as unexplained money u/s 69A.
4. The belated attempt to shift the ownership of cash to third parties was an afterthought and lacked credibility. The seized amounts were unexplained income u/s 69A, subject to 115BBE. The affidavits and additional documents were rightly rejected as inadmissible evidence at the appellate stage.
The copy of the order is as under:
