SATISH KUMAR JAISWAL,GHAZIPUR vs. INCOME TAX OFFICER - 3(5), GHAZIPUR

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ITA 40/VNS/2025Status: DisposedITAT Varanasi20 August 2026AY 2017-20188 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the case to the Assessing Officer for fresh adjudication. The assessee was granted one last opportunity to present their case with supporting evidence, with a caution to comply with the AO's directions.

What were the facts?

The assessee failed to file an income tax return for AY 2017-18. The Income Tax Department had information about cash deposits totaling Rs. 14,11,290/- in the assessee's bank accounts during the demonetization period. The Assessing Officer made additions to the income under Sections 69A and 68 of the Income Tax Act.

What were the issues?

Whether the additions made by the Assessing Officer were justified without providing adequate opportunity to the assessee. The assessee's claim of being a Banking Correspondent and the nature of transactions in his bank accounts.

Which sections of the Income-tax Act were involved?

Section 69A,Section 68,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CIRCUIT BENCH (SMC

Before: SHRI. SUDHANSHU SRIVASTAVA

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.40/VNS/2025 Assessment Year: 2017-18 Satish Kumar Jaiswal v. Income Tax Officer 3(5) Pachokhar Zamania Ghazipur Ghazipur (U.P) TAN/PAN:AIFPJ0890G (Appellant) (Respondent) Applicant by: Shri Ashutosh Varnwal, Advocate Respondent by: Shri Deepak Yadav, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 13.12.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.

2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee, during the demonetization period, had made cash deposits totaling to Rs.14,11,290/- in his Bank Accounts No.6577010100050000 and 6577010100050010, both maintained with Union Bank of India (UBI), Sarahula, Ghazipur. The Assessing Officer (AO) issued statutory notices, requiring the assessee to furnish the details of source of cash deposits. The assessee furnished reply dated 10.10.2019, stating therein that

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the assessee was working as Banking Correspondent for UBI, Sarahula, Ghazipur through CSC and MP CON Agencies and was maintaining three Bank Accounts, viz. No.65770101000500, 6577010100050010 and 657701010005710 with Union Bank of India and the transactions carried out pertained to deposits and withdrawals by the customers and commission income received from the above Agencies. Subsequently, the JCIT, Range 1, Varanasi vide letter dated 04.12.2019 issued a direction under section 144 of the Act to the assessee as under:

"It is directed that before passing the assessment order, it should be ensured that whether the assessee is engaged in business activity or not. If the assessee is found engaged in any business activity, which will be apparent from the bank account statement of the assessee, you are advised to apply provisions of section 44AD by applying NP rate in such cases which varies according to the nature of business activity and profitability therein." 2.1 The AO also collected the KYC Certificate and Bank details of the assessee from the Manager, Union Bank of India under section 133(6) of the Income Tax Act, 1961 (hereinafter called 'the Act’) wherefrom the AO noticed that the assessee was engaged in the work of Banking Correspondent/Bank Mitra. The AO held that since the assessee had neither filed any return of income in response to notice under section 142(1) of the Act nor

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furnished any document to prove the source of the aforementioned cash deposits, he had been left with no option but to pass an ex-parte assessment order based on the facts available on record and tax the entire sum of Rs.14,11,290/- deposited in the Bank Accounts of the assessee as unexplained money. He, accordingly, made the addition of Rs.14,11,290/- to the total income of the assessee under section 69A of the Act.

2.2 The AO further noticed that the assessee had received credit deposits other than cash deposits, totaling to Rs.10,11,076/- during the year under consideration in his Bank Accounts No.65770101000500 and 657701010005710 maintained with Union Bank of India. The AO also noticed from Form 26AS that during the year under consideration the assessee had received Rs.72,044/- as Commission from different companies in lieu of service provided by the assessee. Out of the total credit deposits of Rs.10,11,076/-, the commission of Rs.72,044/- received by the assessee was reduced and the remaining amount of Rs.9,39,032/- (Rs.10,11,076 – Rs.72,044) was added to the total income of the assessee under section 68 of the Act.

2.3 The AO also treated the commission of Rs.72,044/- received by the assessee during the year under consideration as

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undisclosed income of the assessee and added the same also to the total income of the assessee.

2.4 The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.23,50,322/-.

2.5 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 270A, 271AAC 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 by passing an order ex-parte qua the assessee.

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

1.

Because the learned authority has erred in law as well as on facts in framing a high pitched assessment without appreciating the facts and circumstances of the case in correct prospective. 2. Because appellate order was passed by learned appellate authority without giving proper opportunity to the appellant. Appellant was ill also on the date fixed. Medical Certificate is enrolled herewith.

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3.

Because learned appellate authority has erred in law as well as on facts in passing a high pitched order at Rs.2350322/ without considering the fact that the semi- literate appellant was working as Bank Mitra and customer service center (C.S.C.) earning commission and trading of simcard, coupons etc. Almost entire transactions in account represented deposits and withdrawals with the client. Trading, profit and loss account is enclosed herewith. 4. Because the learned authority has erred in adding entire credit entries in the bank accounts aggregating to Rs.2350322/(being cash deposits Rs. 1411290/ and credit transfer Rs.939032/) plus commission income Rs.72044/ without appreciating that almost entire credits has corresponding debits and accounts had meagre cash balances at year end. 5. Because the addition of Rs.939032/ being credit/transfer deposits in bank account have been added under section 68 of the Act without appreciating that bank account is not a books of accounts, where the entries are made. 6. Because the credit entries in the same bank accounts are partially added u/s.68 and partially u/s 69A which is ad- initio bad-In-law. 7. Because even after having full knowledge and information that the assessee was working as Bank Mitra and customer service center (C.S.C.) for facilitating banking transactions in rural areas and trading of simcard, coupons etc. the injudicious, astronomical and illegal order has been passed simply to create a huge tax liability instead of making fair and reasonable order.

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8.

Because any other and further ground of appeal may be made which will be part and partial of grounds of appeal. 3.0 The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted before me that the NFAC has passed the impugned order ex-parte qua the assessee, arbitrarily upholding the order passed by the AO. The Ld. A.R. further submitted that the AO had not allowed adequate opportunity of being heard to the assessee and had passed the impugned assessment order under section 144 of the Act, without bringing on record any material in support of the additions which were made on the basis of presumption and surmises only. The Ld. A.R., therefore, prayed that, in the interest of justice, the matter may be restored to the file of the AO for deciding the same afresh after providing reasonable opportunity of being heard to the assessee. He submitted that the assessee undertakes to produce all the relevant documents in support of the cash deposits made in his bank accounts and other transactions entered into by the assessee during the year under consideration, before the AO.

4.0 The Ld. Sr. D.R. objected to the restoration of appeal to the file of the Assessing Officer and submitted that the appeal of the assessee be dismissed.

5.0 I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of

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the considered view that the assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the AO with the direction to provide one more opportunity to the assessee to present his case along with necessary evidences in support of the cash deposits in his bank accounts and other transactions, as noted by the AO, and entered into by the assessee during the year under consideration. I 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 order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.

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

Order pronounced in the open Court on 20/08/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:20/08/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR

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By order

Assistant Registrar/DDO

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