SANDIP JANARDAN PATIL,AIROLI, NAVI MUMBAI vs. ITO WARD 28(3)(1), MUMBAI, VASHI, NAVI MUMBAI

IN THE INCOME-TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.3966/MUM/2026 (A.Y. 2019-20) Sandip Janardan Patil v/s. Income Tax Officer, Ward – Kshay Plaza Shop No. 11, बनाम 28(3)(1), Income Tax Office, Opp. NHP School, Sec-19, Vashi, Railway Station Airoli, Navi Mumbai – Building, Opposite Raghuleela 400708, Maharashtra Mall, Vashi, Thane – 400 703, Maharashtra स्थायी लेखा सं./जीआइआर सं./ PAN/GIR No: BJUPP8772N Appellant/अपीलार्थी .. Respondent/प्रतिवादी

Assessee by : None Revenue by: Ms. Kanakia Naroola,DR

Date of Hearing 30.06.2026 Date of Pronouncement 19.08.2026 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The instant appeal emanating from the appellate order dated 05.02.2026 is preferred 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 r.w.s. 144B of the Income- tax Act, 1961 [hereinafter referred to as “Act”] dated 04.03.2025 for the Assessment Year [A.Y.] 2019-20.

P a g e | 2 ITA No. 3966/Mum/2026 A.Y. 2019-20 Sandip Janardan Patil 2. The grounds of appeal are as under: 1. On the facts and in law, the reassessment proceedings are bad in law for non-compliance with the mandatory procedure prescribed under section 148A of the Income-tax Act, 1961 (‘Act’), inasmuch as the order under section 148A(d) was not duly served upon the Appellant. 2. The reassessment proceedings are void ab initio as no valid notice under section 148 of the Act was issued or served upon the Appellant in accordance with the provision of law. 3. On facts and in law, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in invoking the provisions of Section 69A of the Income-tax Act, 1961, without appreciating that the Appellant was never found to be the owner of any unexplained money, bullion, jewellery or other valuable article not recorded in the books of account. 4. Without prejudice to the above, the Ld. CIT(A) has erred in sustaining the addition under Section 69A of Act, without appreciating that the very applicability of Section 69A presupposes that the impugned amount is not recorded in the books of account, whereas in the present case the transactions along with their source are duly recorded in the books of account and have already been subjected to tax, and therefore, the impugned addition results in double taxation of the same income. 5. On facts and in law, the Ld. CIT(A) erred in confirming the disallowance of cash payments totalling Rs. 9,12,974/-, without appreciating that there are payments which are made below the limit specified under section 40A(3). Disallowance under section 40A(3) of the Act, applies only to individual payments exceeding Rs. 10,000 made to a person in a single day, and not to the entire cash payments made during the year. 3. Briefly stated facts of the case are that the assessee filed Return of Income declaring total income at Rs.3,41,720/-. Subsequently, as per specific information with the Department, the assessee had made cash payment of Rs.9,12,974/- to M/s National Liquors. Notice under section 148 of the Act was accordingly issued requiring the assessee to furnish the return of income for the relevant year which was not

P a g e | 3 ITA No. 3966/Mum/2026 A.Y. 2019-20 Sandip Janardan Patil responded as also the subsequent notices, although these were communicated by issuing to the email ID of the assessee, as provided by the assessee in the e-filing profile of the Income Tax Department and as made available in the database of the Department. It was confirmed that the communications were duly delivered. In the absence of response from the assessee, the total cash payment amounting to Rs.9,12,974/- was treated as Unexplained money u/s 69A of the Act.

P a g e | 4 ITA No. 3966/Mum/2026 A.Y. 2019-20 Sandip Janardan Patil purposes, no supporting bank reconciliation, day-wise cash flow statement, or invoices were furnished to directly link the source of cash and itsutilization. Ledger confirmations alone did not establish the genuineness of the cash transaction or the sufficiency of funds from recorded business sales. The AO has duly followed statutory procedures, including issuing notices under sections 142(1), 144B(1)(xii)(b), and repeated reminders, which he did not respond to. The mere assertion of pandemic-related difficulties cannot replace the requirement of documentary evidence to substantiate cash payments, especially when such payments are treated as unexplained under Section 69A. 6.1.3 The appellant’s reliance on Rule 6DD exceptions and the cash threshold under Section 40A(3) was misplaced. Section 40A(3) and Rule 6DD provide safeguards for cash payments up to Rs.20,000/- per day per party, but the applicability depends on proper documentation and verification. The AO had rightly observed that the appellant failed to provide any verifiable evidence linking the source of the Rs.9,12,974/- cash to legitimate business receipts. Revenuefriendly precedents, including CIT v. Ramesh Chand (1983) 140 ITR 505 (Del) and CIT v. Smt. Shanti Devi (1999) 238 ITR 458 (Del HC), establish that cash payments without adequate documentary proof can be treated as unexplained under Section 69A. In the absence of sufficient evidence,

P a g e | 5 ITA No. 3966/Mum/2026 A.Y. 2019-20 Sandip Janardan Patil the addition of Rs.9,12,974/- under Section 69Aof the Act was justified and was confirmed. The assesseehad not provided any documentary evidence to demonstrate compliance with Rule 6DD, such as prior approval for cash payments, ledger reconciliation, or detailed cash sales accounting. Assertions regarding pandemic-related difficulties, without supporting proof, could not substitute the statutory requirement. The AO had rightly completed the assessment under Section 144 of the Act and made the addition under Section 69A due to the absence of verifiable explanation. All grounds raised by the appellant, including alleged violations of Section 40A(3), non-consideration of COVID-19 circumstances, best judgment assessment, and double taxation, werefound to be without merit. Consequently, the addition and the assessment order passed by the AO were confirmed in entirety.

P a g e | 6 ITA No. 3966/Mum/2026 A.Y. 2019-20 Sandip Janardan Patil after allowing necessary opportunity of hearing to the assessee who would ensure proper compliance and in case of further laxity in this regard,the AO would be at liberty to take any view of the matter as per law. 6. In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the open court on 19/08/2026.

Sd/- Sd/- (SANDEEP GOSAIN) (PRABHASH SHANKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

Place: म ुंबई/Mumbai ददनाुंक /Date 19.08.2026 Lubhna Shaikh / Steno आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतधकरण/ ITAT, Bench, Mumbai.