CHANDNI RAWAT,KOLKATA vs. ITO, WARD 62(1), KOLKATA, KOLKATA

For that the learned Addl./JCIT(A)-1, Chandigarh had erred in law in issuing an appeal order under section 250 by disclosing his name, designation, and location, in contravention of the faceless appellate mechanism established under section 246(5) and 282A(1) of the said Act, the CBDT Notification No.76/2020 (Faceless Appeal Scheme, 2020) and Notification No.33/2023. 2. For that on the facts and in the circumstances of the case, the assessment order passed by the Learned Assessing Officer under section 143(3) is bad in law, void ab initio, and liable to be quashed, being passed in gross violation of the principles of natural justice.

For that The Ld. Assessing Officer erred on the facts and circumstances of the case in making addition of Rs. 12,43,338/- on account of deposit of cash by treating the same as unexplained as amount being questioned is having a double effect as the same is being credited in sale account in the profit and loss account.

For that the Ld. CIT(A) has erred in law as well as on facts in rejecting the additional evidence filed by the Appellant without properly appreciating that the same was vital and goes to the root of the matter for adjudication of the issues involved, thereby violating the principles of natural justice. The Ld. CIT(A) further failed to provide adequate and effective opportunity to the Appellant to explain and substantiate the reasons for non-production of such evidence before the Assessing Officer, rendering the impugned order arbitrary and unsustainable in law.

For that, the appellant craves leave to add, alter or delete all or any ground or grounds on or before the date of hearing."

Brief facts of the case are that the assessee had filed the return of income for AY 2017-18 on 13.03.2018 declaring the total income at ₹2,85,790/-. The case was selected for scrutiny to investigate cash deposits of ₹12,43,338/- made by the assessee in her HDFC Bank account during the demonetization period. The Assessing Officer (hereinafter referred to as Ld. 'AO') observed that the assessee had claimed that the cash was received from debtors and sale proceeds of her nursery business but failed to furnish documentary evidence such as a list of debtors with full names, addresses, and PAN details etc. In the absence of corroborating evidence, the Ld. AO treated the deposits as unexplained and made addition of ₹12,43,338/- to the total income u/s 143(3) of the Act, which was subsequently rectified u/s 154 r.w.s. 143(3) of the Act, determining the total income of the assessee at ₹15,29,128/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. Addl/JCIT(A), who noted that the assessee had again failed to provide the requisite details to verify her claim and submitted no new evidence to substantiate the source of the cash deposits. Accordingly, the Ld. Addl/JCIT(A) confirmed the action of the Ld. AO and dismissed the appeal of the assessee vide his findings as under: “DECISION: Grounds No.2 It is seen from the assessment order dt. 27.12.2019 which was rectified on 23.01.2020 wherein addition was made to the tune of Rs. 12,43,338 u/s 69A of the act.

1 The appellant is a proprietorship Firm in the named of M/S Charitra Vatika which is doing Nursery Business. M/S Charitra Vatika is a biggest nursery projects i.e. agricultural project. The main object of the firm is purchasing plant, sapling, seeds from local nursery and also from out of West Bengal. The appellant filed return of income for AY 2017-18 on 13.3.2018. The case was selected for scrutiny through CASS. During the assessment proceedings, the AO found that the appellant has deposited the cash amounting to Rs. 12,43,338/- during the demonetization period in the account No. 00407630000620 maintained with HDFC bank new Alipore Branch. The relevant paras of Assessment order are as under- Return of income in this case has been filed by the assessee on 13/03/2018 vide acknowledgement No. 443513591130318 dated 24/09/2018 declaring total income of Rs.2,85,790/-. Accordingly notice u/s.143(2) has been issued to the assessee on 24/09/2018 through system. Thereafter notice u/s.142(1) dated 06/05/2019 was issued to the assessee with details questionnaire. After that the juri iction over the assessee has been transferred to the present juri ictional A.O. and notice u/s.142(1) were issued to the assessee on 05/11/2019 and 13/12/2019. In response to the said notices the assessee filed various documentary evidences but did not furnish any documents in relation to cash deposit during the demonetization period to the tune of Rs.1243338/- in account No.00407630000620 maintained with HDFC Bank, New Alipore Branch. In response to notice u/s 142(1) dated 13/12/2019 regarding purchase and sale of nursery goods the assessee furnished some papers but did nor furnish any paper in relation to huge cash deposit in the assessee bank account maintained with HDFC Bank. To verify the same again a notice u/s 142(1) dated 25/12/2019 requesting the assessee to furnish documentary evidences in relation to cash deposit in the HDFC Bank. In ITA No(s). 1467/KOL/2026 Assessment Year(s) 2017-18 response to the said notice the assessee furnished a letter wherein it is stated that the cash duly received by the assessee from debtors out of which the assessee deposited Rs.11,69,000/- to New Alipore Branch and Rs.4,02,500/- was deposited into her personal account. However as per Departmental information it is revealed that the assessee deposited Rs.12,43,338/- during the demonetization period. As list of debtors along with Full name, address for correspondence, PAN No. has been furnished wherefrom the deposit of such huge cash can be verified.

2 Now during the appellate proceedings the appellant has filed detailed written submissions which was sent to the AO and a remand report was called for which is as under: The instant case was selected for scrutiny on the following: "Cash deposit to the tune of Rs.1243338/- was made in account No.00407630000620 of the assessee maintained with HDFC Bank, New Alipore Branch during the demonetization period." In response to notice u/s.142(1) dated 13/12/2019 regarding purchase and sale of nursery goods the assessee furnished some papers but did not furnish any paper in relation to huge cash deposit in the assessee bank account maintained with HDFC Bank. To verify the same again a notice u/s.142(1) dated 25/12/2019 requesting the assessee to furnish documentary evidences in relation to cash deposit in the HDFC Bank. In response to the said notice the assessee furnished a letter wherein it is stated that the cash duly received by the assessee from debtors out of which the assessee deposited Rs.11,69,000/- to New Alipore Branch and Rs.4,02,500/- was deposited into her personal account. However as per Departmental information it is revealed that the assessee deposited Rs.12,43,338/- during the demonetization period. No list of debtors along with Full name, address for correspondence, PAN has been furnished wherefrom the deposit of such huge cash can be verified. As the assessee failed to provide aforesaid details during assessment proceedings which is required to verify her claim that she deposited the cash out of realisation from debtors and sale proceeds and also offered for taxation by way of crediting the sale amount in the Profit and loss account.

3 I have considered the submission made by the appellant and also the remand report submitted by the Assessing officer. It is understood that the appellant has failed to furnish the documents regarding purchase and sale of nursery goods also did not furnish any paper in relation to cash deposit in the bank during demonetization period. The AO in his remand report has stated that the appellant did not provide the list of debtors alongwith full name, address for correspondence, PAN wherefrom the deposit of such huge cash can be verified. The appellant failed to provide details during assessment proceedings as well as the appellate proceedings which is required to verify her claim that cash deposited out of realization from debtors and sale proceeds and also offered for taxation by way of creating the sale amount in the profit and loss account. Further, as stated by the AO the appellant has not submitted any new evidence and all the documents are the same which were submitted during the assessment proceedings. Therefore, in my view there is no interference needed in the Assessment order as the appellant has not substantiated his claim with any new evidences. Hence the ground raised by the appellant is dismissed.

Grounds no 1& 3 are general in nature.

In result, the present appeal is DISMISSED.”

Aggrieved with the order of the Ld. Addl/JCIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. Addl/JCIT(A). Ground No. 1 is dismissed as it could not be established as to how the assessee was prejudiced by mention of the name and designation of the appellate authority. Ground No. 2 is also dismissed as it is general in nature. In Ground No. 3, the assessee as furnished a list of 3 debtors including the amount received, from whom cash was received and it is mentioned in Ground No. 4 that the Ld. Addl./Joint CIT(A) failed to provide adequate and effective opportunity to the assessee to explain and substantiate the reasons for non-production of ITA No(s). 1467/KOL/2026 Assessment Year(s) 2017-18 such evidence before the Ld. AO. The assessee has requested, in the alternative, to restore the matter to the file of the Assessing Officer for fresh adjudication after considering the additional evidence and grant adequate opportunity of being heard. In the interest of justice and fair play, it was considered by the Bench that the additional evidence ought to have been admitted as per rule 46A of the I.T. Rules, 1962 and the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. Addl/JCIT(A) and remit the matter to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission she wants to make in support of her grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are partly allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 18th August, 2026. [Yogesh Kumar US] [Rakesh Mishra] Judicial Member Accountant Member Dated: 18.08.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order