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Facts
The assessee deposited cash of Rs. 11,01,000/- in his bank account. The case was reopened under Section 147 of the Act, but the assessee failed to file a return or respond to notices. The AO completed the assessment under Section 144, adding the cash deposit as unexplained income. The CIT(A) upheld this addition.
Held
The Tribunal found that while the assessee failed to provide sufficient evidence and respond to notices, the CIT(A) did not objectively evaluate the case and dismissed the appeal ex-parte. Therefore, the Tribunal set aside the appellate order and restored the matter to the AO for a fresh assessment.
Key Issues
Whether the reopening of assessment was valid, and whether the CIT(A) erred in rejecting additional evidence and upholding the addition of unexplained cash deposit without proper evaluation.
Sections Cited
147, 148, 144, 69A, 46A
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Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR
Date of Hearing 25.09.2025 Date of Pronouncement 12.11.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 21.06.2024 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147 r.w.s. 144 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 14.12.2019 for the Assessment Year [A.Y.] 2012-13. P a g e | 2 A.Y. 2012-13 Anand Ashok Chandavarkar, Mumbai 2. The grounds of appeal are as under:
1. The Ld. National Faceless Appeal Centre (NFAC) Delhi (hereinafter referred to as the “ld. CIT(A)”] erred in passing the order dated 21.06.2024 upholding the action of the 1d Income Tax Officer-31(1)(1). Mumbai (hereinafter referred to as “Ld. A.O.] in determining the total income of the Appellant at Rs. 11,01,000/- without appreciating the facts and circumstances of the case. The Appellant strongly objects to the impugned order passed by Ld. CIT(A) as the same is illegal, arbitrary and perverse on the following amongst other grounds which are urged without prejudice to one another.
2. Reopening of assessment without serving the notice under section 148 of the Act is bad in law The Ld. CIT(A) fell in error of law in upholding the action of the action of the Ld. AO in reopening the assessment of the Appellant without serving any valid notice issued under section 148 of the Act The Appellant, therefore, prays that impugned order passed by the Ld.CIT(A) upholding the reassessment order passed without serving a valid notice under section 148 of the Act is void ab initio and the same may be quashed.
3. Rejecting the application for admission of additional evidences is unjustified. The Ld.CIT(A) erred in summarily rejecting the application made by the Appellant for admissions of additional evidences as per the provisions of Rule 46A of the Income Tax Rules, 1962 without appreciating that the Appellant was prevented from sufficient cause from not providing the relevant documentary evidences during the course of reassessment proceedings. Hence, the impugned order passed by the Ld. CIT(A) is against the provisions of law and the same may be quashed and set aside.
4. Addition by treating the Cash Deposited in Bank Account as unexplained money under section 69A of the Act is unjustified- Rs.11,01,000/- i. The Ld. CIT(A) erred in upholding the action of Ld. A.O. in making addition of Rs 11,01,000/- under section 69A of the Act by treating the cash deposited in hank account as unexplained money without appreciating the fact and circumstances of the case in proper perspective. Hence, the addition of Rs. 11,01,000/- under section 69A of the Act is unjustified and the same may be deleted. ii. The Ld.CIT(A) failed to appreciate that the Appellant has duly explained the source of cash deposit from its opening cash balance and withdrawal from the banks during the assessment year under consideration. Thus, the Appellant had duly discharged the primary P a g e | 3 A.Y. 2012-13 Anand Ashok Chandavarkar, Mumbai onus cast upon him under section 69A of the Act. Therefore, the addition of Rs.11.01,000/- under section 69A of the Act is against the provisions of law and the same may be deleted. iii. The ld.CIT(A) further failed to appreciate that the Appellant had furnished an explanation with respect to the cash deposited in the bank account which has not been found to be unsatisfactory by the Ld. A.O. Thus, the impugned addition of Rs.11,01,000/- under section 69A of the Act is without any basis and the same may be deleted.
Brief facts of the case are that details available with the Department revealed that the assessee had deposited cash amounting to Rs.11,01,000/- in his bank account during the year under consideration. The case was reopened under section 147 of the Act and notice under section 148 of the Act was duly served. However, he failed to file return of income within the stipulated time. Thereafter, other statutory notices and show cause notices were issued. However, he did not respond to any of them. Accordingly, the AO completed the under section 144 of the Act and added the entire cash deposit of Rs.11,01,000/- u/s 69A of the Act. The assessment was thus completed on a total income of Rs. 11,05,720/-.
In the subsequent appeal, the assessee furnished certain additional evidences. The ld.CIT(A) called for a remand report and finally dismissed the appeal with the observations that the appellant failed to furnish return of income suo moto or in response to notice under section 148 of the Act when the deposit of cash in his account during the year was detected by the Department. He failed to discharge P a g e | 4 A.Y. 2012-13 Anand Ashok Chandavarkar, Mumbai the onus with cogent documentary evidence to prove the source of the cash deposited in the account. He did not avail of the opportunities provided to him during assessment proceedings by the AO through multiple notices and show cause letters issued. Even during appellate proceedings, he failed to substantiate his case with corroborative documentary evidence and explanations. He was not able to show the nexus between cash in hand or cash withdrawn from accounts and that deposited in the account under consideration.
We find that the appellate order has also been passed in ex- parte manner dismissing the appeal as the assessee could not bring on record any corroborative evidence in support of the contentions pertaining to the bank deposit. The ld.CIT(A) also took note of the facts that the assessee neither filed return nor made any compliance before the AO, resulting in passing of assessment order u/s 144 of the Act. However, we find that the ld.CIT(A) did not evaluate the points of consideration so as to give his own decision on objective analysis of all relevant facts and circumstances of the case. It is equally important that the assessee failed to file the return for inexplicable reasons and also did not bother to respond to various notices issued by the AO without any cogent reasons. Now, at this stage the assessee has raised certain new issues which were neither before the AO nor before the ld.CIT(A). It is P a g e | 5 A.Y. 2012-13 Anand Ashok Chandavarkar, Mumbai stated that the reopening was done on an invalid notice. Besides, the ld.CIT(A) did not take proper cognizance of his request for admission of additional evidences in terms of Rule 46A. 5.1 Considering the entirety of the facts and the circumstances of the case and in the interest of principles of natural justice and fair play, we consider it appropriate to send the entire matter back to the file of the AO in the light of above discussion, granting one more opportunity to the assessee to advance his arguments and submissions before him, so as to provide details in connection with the merits of the case. Accordingly, in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.AO for passing the assessment order de novo after allowing adequate opportunity of hearing to the assessee who is also directed to attend the assessment proceedings before the AO without fail and cooperate in furnishing relevant details etc. as sought by him.
In the result, the grounds of appeal and the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 12/11/2025. NARENDER KUMAR CHOUDHRY PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER)