RAMDASS SARAVANAN,PUDUKKOTTAI vs. ITO, WARD-1, PUDUKKOTTAI

The brief facts of the case are that the assessee, an individual engaged in the business of plying, hiring and leasing of goods carriages, did not file the return of income for the assessment year under consideration within the time prescribed u/s.139 of the Act. Based on information available with the Department that the assessee had deposited cash aggregating to Rs.21,49,700/- in his account maintained with M/s. Equitas Small Finance Bank and Rs.51,82,000/- in his account maintained with M/s.Syndicate Bank, besides having received insurance commission of Rs.18,679/- from M/s.Religare Health Insurance Company Limited and interest income of Rs.14,631/- from M/s.Kumbakonam Mutual Benefit Fund Nidhi Limited, the Jurisdictional Assessing Officer ("JAO") formed a prima facie belief that income chargeable to tax had escaped assessment. Accordingly, a notice u/s.148A(b) of the Act was issued on 05.01.2024 calling upon the assessee to explain as to why proceedings u/s.148 of the Act should not be initiated. Since no response was received from the assessee, the JAO passed an order u/s.148A(d) of the Act on 26.02.2024 holding that it was a fit case for issuance of notice u/s.148 of the Act. Consequent thereto, notice u/s.148 of the Act was issued on the same date. In compliance therewith, the assessee filed his return of income on 25.05.2024 declaring a total income of Rs.6,98,690/-, wherein income from the business of plying and hiring of goods carriages was offered under the presumptive scheme of taxation prescribed u/s.44AE of the Act.

During the course of reassessment proceedings, the AO called upon the assessee to explain the source of the aggregate cash deposits amounting to Rs.73,31,900/- made in the aforesaid bank accounts. In response, the assessee submitted that the cash deposits represented transport receipts generated in the course of his business of operating goods carriages and recoveries of loans advanced in the ordinary course of his money-lending business. It was further contended that having opted for the presumptive scheme of taxation u/s.44AE of the Act, the assessee was not statutorily required to maintain regular books of account. The AO, however, was not

Aggrieved by the reassessment order, the assessee preferred an appeal before the Ld.CIT(A). The Ld. CIT(A), vide the impugned order dated 25.11.2025, dismissed the appeal and affirmed the action of the AO in treating the cash deposits of Rs.73,31,900/- as unexplained money u/s.69A r.w.s 115BBE of the Act.

Aggrieved by the order of the Ld.CIT(A) in dismissing the appeal, the assessee is in further appeal before us.

At the time of hearing, the Ld.AR appearing for the assessee, at the outset, filed a petition under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 seeking admission of certain additional evidences. It was submitted that the additional evidences pertain to the source of the cash deposits in the bank accounts and are crucial for proper adjudication of the controversy involved. The ld.AR stated that it is evident from the assessment order that the AO has not disputed that the assessee owned 7 vehicles declared in the ROI, In fact, after preliminary verification he accepted that the details of the vehicle declared in the ROI belong to the assessee; the above documents are being supplementary and supportive in nature to prove that the appellant indeed is involved in the plying and hiring of goods carriages from the aforesaid vehicles. Thus, in view of the same, the assessee prays to delete the cash deposit of Rs.39,37,500/- being gross receipts received from hiring and plying goods carriages. The Ld. AR further submitted that the assessee is engaged not only in the business of plying and hiring of goods carriages but also in money-

Per contra, the Ld.DR strongly opposed the admission of the additional evidences. Placing reliance upon the orders of the lower authorities, the Ld. DR submitted that the assessee had failed to avail sufficient opportunities before the AO as well as the Ld.CIT(A) and no sufficient cause had been shown for producing the documents at the appellate stage. It was, therefore, prayed that the petition filed under Rule 29 of the ITAT Rules, 1963 be rejected and the order of the Ld. CIT(A) confirming the addition of Rs.73,31,900/- u/s.69A r.w.s 115BBE of the Act be sustained.

We have heard the rival submissions, perused the orders of the authorities below and carefully considered the material available on record, including the petition filed by the assessee under Rule 29 of the ITAT Rules, 1963 seeking admission of additional evidences.

The primary controversy involved in the present appeal relates to the addition of Rs.73,31,900/- made by the AO by invoking the provisions of section 69A of the Act in respect of the cash deposits found in the bank accounts maintained by the assessee with M/s.Equitas Small Finance Bank and M/s.Syndicate Bank. The explanation consistently put forth by the assessee before the lower authorities is that the cash deposits represented transport receipts arising from the business of plying, hiring and leasing of goods carriages coupled with recoveries of loans advanced in the course of his money- lending business. It is also the specific case of the assessee that he had opted for the presumptive scheme of taxation u/s.44AE of the Act and, therefore, was not under any statutory obligation to maintain regular books of account.

Before us, the assessee has filed an application under Rule 29 of the ITAT Rules seeking admission of certain additional evidences. The documents, as stated by the Ld.AR, consist of records relating to the transport business carried on by the assessee as well as documents evidencing the money-lending transactions and recovery of loans, which, according to the assessee, would establish the source of the impugned cash deposits. It has been submitted that the said evidences could not be produced before the lower authorities due to the circumstances explained in the petition and that unless the same are considered, the real controversy involved in the appeal cannot be effectively adjudicated.

It is well settled that the powers of the Tribunal under Rule 29 of the ITAT Rules, 1963 are wide enough to admit additional evidence where the Tribunal considers such evidence necessary to enable it to pass orders or for any other substantial cause. The object of the Rule is to ensure that substantial justice is not defeated on account of technical or procedural lapses and that the correct tax liability of an assessee is determined on the basis of complete and relevant material. At the same time, where the additional evidence sought to be produced requires detailed factual verification, the proper course would ordinarily be to restore the matter to the file of the AO so that the Revenue is not deprived of an opportunity to examine the authenticity and evidentiary value of such documents.

Having carefully considered the rival submissions, we find that the additional evidences sought to be produced by the assessee have a direct bearing on the issue in dispute. The explanation offered by the assessee regarding the source of the cash deposits has been rejected primarily for want of supporting evidence. The documents now sought to be placed on record are

Accordingly, we set aside the impugned order of the Ld.CIT(A) on this issue and restore the matter to the file of the Jurisdictional Assessing Officer(JAO). The JAO shall examine the additional evidences filed by the assessee, verify the nature and source of the cash deposits, and consider whether the deposits are relatable to the transport business carried on by the assessee, the alleged money-lending activities, or any other explained source, after conducting such enquiries as may be considered necessary in accordance with law. The JAO shall also examine the applicability of the provisions of section 69A r.w.s 115BBE of the Act in the light of the evidence that may be produced and the explanations that may be offered by the assessee during the remand proceedings.

We make it clear that we have not expressed any opinion on the merits of the addition and all the contentions available to both the parties are left open. The assessee is directed to extend full cooperation in the remand proceedings and shall produce all relevant books of account, bank statements, transport

In the result, the appeal of the assessee stands allowed for statistical purposes.