CIT(A) cannot recharacterise s.68 as s.69A without notice (ITAT Hyderabad)
The Tribunal held it has no such power: in the absence of any power vested in the Commissioner (Appeals) to treat a section 68 addition as a section 69A addition, the recharacterised confirmation was deleted.
CA Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Order: ITA No. 196/Hyd/2024 (ITAT Hyderabad), Assessment Year 2014-15, against the CIT(A) order dated 02.02.2024, pronounced 10.10.2025.
Facts
The dispute concerns credits of Rs.80,53,411 in three bank accounts, which the assessee was held to have left unexplained as cash deposits.
The Assessing Officer added the amount as unexplained cash credit under section 68; on appeal the Commissioner (Appeals) confirmed it recharacterised as unexplained money under section 69A.
Issue
Whether an appellate confirmation that converts a section 68 addition into section 69A, without putting the assessee to notice, survives.
Holding
The Tribunal held it has no such power: in the absence of any power vested in the Commissioner (Appeals) to treat a section 68 addition as a section 69A addition, the recharacterised confirmation was deleted.
Coordinate decisions supported the view, including one where a section 69C sustenance failed for want of a show-cause notice, resting on the jurisdictional High Court's rule against such conversion.
Having vacated the addition on this ground, the Tribunal left the other assailed aspects open, allowed the appeal on these observations, and pronounced the order on 10.10.2025.
Why a client would care
Where the Assessing Officer chose section 68 and the Commissioner substituted section 69A, the fight is not the credits but the conversion — without notice, the recharacterisation falls and the addition goes with it.
Questions clients ask
Q1. The Commissioner (Appeals) confirmed a section 68 addition by converting it into a section 69A addition. Did that survive?
No — the Tribunal held it has no power to recharacterise in that way and deleted the confirmed addition.
Q2. Does the absence of a show-cause notice matter?
The coordinate decisions it followed included one where a section 69C sustenance failed for want of a show-cause notice.
Q3. Did the Tribunal decide the other grounds?
It left the other assailed aspects open.
Disclaimer
This note summarises a Tribunal order for general information. It is not professional advice and does not predict the outcome of any other case. Tax and company-law positions depend on facts and dates; take a written opinion before you act. Harun Raaj & Associates is a Chartered Accountants firm in Visakhapatnam.
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