FR. SUNIL PRAKASH MATHIAS LEGAL HEIR OF LATE AJAY KUMAR,VARANASI vs. A.O., INCOME TAX DEPARTMENT, VARANASI

PER BENCH: These appeals have been preferred by the Assessee against respective orders, all dated 30.09.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Years 2013-14 to 2016-17.

2.0 Since the facts and the issues involved in the above captioned appeals are almost identical, therefore, they were taken up together for hearing and are being disposed of through this common order for the sake of convenience.

2.1 First, we will deal with the issues involved in the case of the assessee in ITA No.96/VNS/2025 for assessment year 2013- 14.

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2.2 The brief facts of the case are that the Income Tax Department was in possession of information that, during the year under consideration, the assessee had deposited an amount of Rs.4,30,84,400/- in his Saving Bank Account maintained with Bank of India and the assessee had received an amount of Rs.3,77,444/- as salary during the year under consideration. But no return of income for the year under consideration was filed by the assessee under section 139 of the Income Tax Act, 1961 (hereinafter called 'the Act’). On the basis of these facts, the case of the assessee was reopened under section 147 of the Act after issuing notice under section 148 of the Act to the assessee. However, in response to notice under section 148 of the Act, there was no response from the side of the assessee. Thereafter, the AO issued statutory notices to the assessee, requiring the assessee to explain the source of cash deposits with supporting evidence. However, there was still no response from the side of the assessee. The AO, subsequently, issued a show cause notice along with draft assessment order to the assessee for completion of assessment under section 144 of the Act, vide which assessee was required to furnish the details of source of cash deposits. Since again there was no response from the side of the assessee, the AO treated the entire cash deposits of Rs.4,30,84,400/- as unexplained money of the assessee and

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added the same to the total income of the assessee under section 69A of the Act.

2.3 The AO also noted from Form 26AS that the assessee had received an amount of Rs.3,77,444/- as salary during the year under consideration. Since there was no explanation from the side of the assessee pertaining to the salary received by the assessee, the AO treated the same as undisclosed income of the assessee and the same was added to the total income of the assessee.

2.4 The AO completed the assessment under section 147 read with sections 144/144B of the Act, assessing the total income of the assessee at Rs.4,34,61,840/-.

2.5 The AO also initiated penalty proceedings under sections 271(1)(c), 271(1)(b) and 271F of the Act, separately.

2.6 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee and confirmed the order of the AO.

2.7 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

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3.0 On identical set of facts, as narrated above for assessment year 2013-14, in assessment year 2014-15 also, the AO treated the entire credits of Rs.5,09,23,345/- in the bank account as unexplained money of the assessee and was added to the total income of the assessee. The AO completed the assessment under section 147 read with sections 144/144B of the Act, assessing the total income of the assessee ate Rs.5,09,23,350/-.

3.1 The AO also initiated penalty proceedings under sections 271(1)(c), 271(1)(b) and 271F of the Act, separately.

4.0 Likewise, in assessment year 2015-16 also, the AO treated the entire credits of Rs.6,31,32,314/- in the bank account as unexplained money of the assessee and added the same to the total income of the assessee. The AO completed the assessment under section 147 read with sections 144/144B of the Act, assessing the total income of the assessee ate Rs.6,31,32,310/-.

4.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271(1)(c), 271(1)(b) and 271F of the Act, separately.

5.0 Likewise, in assessment year 2016-17 also, the AO treated the entire credits of Rs.6,28,94,460/- in the bank account as unexplained money of the assessee and added the

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same to the total income of the assessee. The AO completed the assessment under section 147 read with sections 144/144B of the Act, assessing the total income of the assessee ate Rs.6,6,28,94,460/-.

5.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271(1)(c), 271(1)(b) and 271F of the Act, separately.

6.0 Aggrieved with the orders of the AO for assessment years 2014-15, 2015-16 and 2016-17 also, the Assessee preferred appeals before the NFAC, which dismissed the appeals of the assessee and confirmed the orders of the AO.

7.0 Now the assessee has approached this Tribunal challenging the orders of the NFAC, by raising the following grounds of appeals:

GROUNDS IN ITA NO.97/VNS/2025:

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was deposited into Bank of India, Bhadohi as supported by the bank account statement. 3. That the amount of addition of Rs.5,09,23,345/- has been inadvertently arrived at by the learned AO by adding the deposits and withdrawals of the transactions of the bank as evident by the bank statement. 4. That the entire addition is based on a mistaken identity as the bank account was incorrectly linked with the PAN of the individual Principal (Late Shri Ajay Kumar), instead of the Society running the school. 5. That the learned CIT(A) erred in not considering the verifiable evidence of ownership, bank account statements and organizational control showing that the funds belonged to the Diocese of Varanasi and not to the late assessee. 6. That the order passed by the Ld. Commissioner of Income Tax (Appeals), NFAC, Income Tax Department, Delhi dated 30/09/2024 is void ab initio and deserves to be quashed, having been passed in the name of a deceased assessee, rendering the entire appellate proceedings invalid in the eyes of law. 7. That the appellant craves leave to add, alter, amend or withdraw any ground(s) of appeal at the time of hearing. GROUNDS IN ITA NO.98/VNS/2025:

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Kumar) but was the total turnover of the school administered by parent society i.e., Diocese of Varanasi (PAN: AAATD2112Q), and whereas, the actual receipt received by the school was only Rs.2,85,18,830/- and the part of that was deposited into Bank of India, Bhadohi as supported by the bank account statement. 3. That the amount of addition of Rs.6,31,32,314/- has been inadvertently arrived at by the learned AO by adding the deposits and withdrawals of the transactions of the bank as evident by the bank statement. 4. That the entire addition is based on a mistaken identity as the bank account was incorrectly linked with the PAN of the individual Principal (Late Shri Ajay Kumar), instead of the Society running the school. 5. That the learned CIT(A) erred in not considering the verifiable evidence of ownership, bank account statements and organizational control showing that the funds belonged to the Diocese of Varanasi and not to the late assessee. 6. That the order passed by the Ld. Commissioner of Income Tax (Appeals), NFAC, Income Tax Department, Delhi dated 30/09/2024 is void ab initio and deserves to be quashed, having been passed in the name of a deceased assessee, rendering the entire appellate proceedings invalid in the eyes of law. 7. That the appellant craves leave to add, alter, amend or withdraw any ground(s) of appeal at the time of hearing. GROUNDS IN ITA NO.99/VNS/2025:

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A.R. further submitted that the impugned orders of the NFAC be set aside and the matter be remanded back to the AO to examine the records in line with the subsequent years' assessments and the correct PAN of the Diocese of Varanasi.

9.0 Per contra, the Ld. CIT(DR) submitted that the assessee/legal heir failed to respond to the statutory notices issued under sections 148 of the Act, 142(1) of the Act, and show-cause notices issued during the assessment proceedings, leaving the AO with no alternative but to complete the best- judgment assessment under section 144 read with section 147/144B of the Act. It was further submitted that substantial cash deposits running into crores were identified in the savings bank account linked to the PAN profile accessible by the Department during the relevant financial years, with no return of income filed initially by the individual. The Ld. CIT (DR) submitted that while the Department acknowledges the subsequent consistency pleaded by the assessee for assessment years 2017-18 and 2018-19, the claim that the bank account exclusively belongs to the Diocese of Varanasi (PAN: AAATD2112Q) and pertains to school receipts requires factual verification at the assessment level. The Ld. CIT (DR) submitted that if the matter is remanded, it should be subject to strict

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verification of documentary evidence establishing the ownership of the bank account and school financial statements.

10.0 We have heard the rival submissions and have also perused the material on record. It is an undisputed that the late assessee, Shri Ajay Kumar, served as the Principal of a school run by the Diocese of Varanasi (PAN: AAATD2112Q), a registered charitable society. The core additions under section 69A of the Act arose due to cash transactions routed through a Bank of India account at Bhadohi, which was (as per the submissions of the Ld. A.R.) inadvertently linked with the individual PAN of the late Shri Ajay Kumar, Principal of a school run by the Diocese, Varanasi instead of the PAN of the Diocese, Varanasi. We have noted the fact that for subsequent assessment years (assessment years 2017-18 and 2018-19), the Revenue authorities evaluated similar facts and accepted that these bank deposits did not constitute the personal undisclosed income of the individual assessee. Since the assessment orders passed under section 144 were completed ex-parte due to lack of representation, we are of the considered view that an opportunity should be granted to the legal heir (Fr. Sunil Prakash Mathias) to present the correct factual matrix before the Assessing Officer.

10.1 In this view of the matter, the impugned orders of the Ld. First Appellate Authority (NFAC), all dated 30.09.2024 are set

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aside and all the four appeals (ITA Nos. 96 to 99/VNS/2025) are remanded back to the file of the Assessing Officer for de novo adjudication. The Assessing Officer is directed to verify the institutional relationship of the bank account with the Diocese of Varanasi (PAN: AAATD2112Q), cross-examine the school turnover records, and align the assessment with the approach adopted by the Department in the assessee's own case in subsequent years, i.e. assessment years 2017-18 and 2018-19. The assessee is directed to furnish all necessary bank statements and other evidences and proofs before the AO. We also caution the Assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the orders in accordance with law, based on material available on record even if it is ex-parte qua the Assessee.

11.0 In the result, all the appeals of the Assessee stand allowed for statistical purposes.

Order pronounced in the open Court on 16/09/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED:16/09/2026 JJ:

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