SUSHIL KUMAR,JIND vs. INCOME TAX OFFICER, WARD-1, JIND

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “बी” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE �ी लिलत कुमार, �ाियक सद� एवं �ी मनोज कुमार अ�वाल, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 140 /Chd/ 2026 िनधा�रण वष� / Assessment Year : 2015-16 Sushil Kumar बनाम The ITO Prop. M/s Basheshar Lal Sushil Kuar Ward-1, Jind Sop No. 47-48, Old Anaj Mandi, Julana, S.O. Jind, Haryana-126101 �ायी लेखा सं./PAN NO: AHJPG6067F अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Ashok Kumar, C.A, Shri I.M Singh, Advocate and Ms. Sonali Aggarwal, C.A राज� की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR(Virtual Mode) सुनवाई की तारीख/Date of Hearing : 29/07/2026 उदघोषणा की तारीख/Date of Pronouncement : 17/08/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 16/12/2025 for the Assessment Year 2015-16.

2 7. That the appellant craves to add, amend, or alter grounds of appeal before the appeal is finally heard and disposed of. 3. The assessee is an individual who did not file his return of income under section 139(1) of the Income-tax Act, 1961 for the assessment year 2015-16. The case was subsequently reopened on the basis of information relating to substantial cash deposits of Rs.1,03,70,000/- in a bank account. In response to notice under section 148, the assessee filed his return declaring total income of Rs.2,44,010/-.

3.1 During the reassessment proceedings, the Assessing Officer called upon the assessee to explain the nature and source of the aforesaid cash deposits. According to the assessee, the bank account in which the cash deposits were reflected pertained to a partnership firm, namely M/s Basheshar Lal Sushil Kumar, and the PAN of the assessee had subsequently been linked with the said bank account due to a clerical error. The assessee further submitted that the partnership firm had been taken over by him as a sole proprietorship after the death of one of the partners.

3.2 The Assessing Officer, however, was not satisfied with the explanation furnished by the assessee and treated the cash deposit of Rs.1,03,70,000/- as unexplained money under section 69A of the Act and subjected the same to tax under section 115BBE. The assessment was accordingly completed determining the total income at Rs.1,06,14,010/- and raising a substantial demand. These facts are borne out from the assessment proceedings and the impugned appellate order.

3 4.1 The Ld. CIT(A), however, rejected the explanation furnished by the assessee, declined to condone the delay and dismissed the appeal as time- barred without adjudicating the grounds raised by the assessee on merits. The Ld. CIT(A) accordingly upheld the addition made by the Assessing Officer.

6.1 The Ld. AR submitted that immediately thereafter the assessee approached his tax professional in the first week of January 2025 and, after obtaining the necessary advice, filed the appeal on 25.01.2025. Thus, there was no deliberate or intentional abandonment of the statutory remedy.

6.2 It was further submitted that the assessee has raised substantial grounds challenging the addition of Rs.1,03,70,000/- under section 69A, including the specific contention that the bank account in question actually belonged to the partnership firm and that the assessee's PAN had been linked with the said account due to a clerical error. The Ld. AR therefore prayed that, in the interest of substantial justice, the matter may be restored to the file of the Ld. CIT(A) for adjudication of the appeal on merits after granting proper opportunity of hearing to the assessee.

4 delay. The Ld. DR therefore submitted that the order of the Ld. CIT(A) dismissing the appeal as time-barred does not call for any interference.

8.1 In our considered opinion, the contention of the assessee that the PAN in question pertains to the partnership firm, if factually established, may have substantial bearing on the sustainability of the impugned addition in the hands of the assessee. However, the assessee cannot be permitted to take advantage of his own omission or lapse. If the assessee was aware that the PAN and the bank account against which the impugned transaction was reflected belonged to the partnership firm, it was incumbent upon him to bring this fact, along with supporting documentary evidence, to the notice of the Assessing Officer during the assessment proceedings itself.

8.2 At the same time, the Revenue also cannot be permitted to suffer on account of such factual confusion or lapse. Considerable time has already elapsed since the relevant assessment proceedings. If the impugned amount in fact pertains to the partnership firm, any further delay may have a bearing upon the Revenue's ability to take appropriate action in the hands of the actual person/entity to whom the PAN and the bank account pertain, subject of course to the provisions of law and limitation. The Revenue cannot be placed in a position where, merely because the matter was wrongly

5 considered in the hands of the assessee, the legitimate tax liability, if any, escapes assessment altogether.

8.3 We, therefore, consider it appropriate that the matter requires a fresh and comprehensive factual verification rather than a decision merely on the basis of the claim made by either party. 8.4 Accordingly, the matter is restored to the file of the Ld. Assessing Officer with the following directions: (i) The Assessing Officer shall verify from the PAN records, bank records and other relevant material whether the PAN against which the impugned amount of Rs.1,03,70,000/- was reflected actually belongs to the assessee or to the partnership firm, as claimed by the assessee. (ii) The Assessing Officer shall examine the relevant books of account, financial statements, bank accounts and other records of the partnership firm to ascertain whether the impugned amount has been duly recorded and accounted for in the books of the firm. (iii) In case the amount is found to pertain to the partnership firm and is duly reflected in its books of account, the Assessing Officer shall take such further action in accordance with law as may be permissible in the appropriate case. (iv) In case the amount is not found to have been duly accounted for in the books of the partnership firm, the Assessing Officer shall examine the matter in the hands of the appropriate person/entity and shall take such action as is permissible under law, subject to the applicable provisions relating to limitation. (v) At the same time, merely because the assessee claims that the PAN belongs to the partnership firm, he cannot be absolved of his obligation to explain the impugned amount in the present proceedings. If, upon verification, the amount is not found to have been accounted for by the partnership firm or if the Revenue finds that the amount is otherwise attributable to the assessee, the Ld. Assessing Officer shall examine the nature and source of the amount, the explanation furnished by the assessee, the supporting evidence, and all other relevant aspects in accordance with law. (vi) The Assessing Officer shall thereafter pass a speaking order after affording reasonable and effective opportunity of being heard to the assessee.

6 8.5 We further note that the Ld. CIT(A) dismissed the appeal principally on the ground of delay of approximately 285 days and did not adjudicate the substantive grounds relating to the impugned addition. The assessee had explained that he became aware of the assessment order only on 27.12.2024 upon accessing the income-tax portal and thereafter consulted his tax professional in the first week of January 2025, following which the appeal was filed on 25.01.2025. 8.6 Considering the peculiar facts of the case, the nature of the substantial addition involved and the specific factual controversy regarding the PAN and the ownership of the bank account, we are of the view that the ends of substantial justice would be met by providing one opportunity to the assessee to have the matter examined on merits. However, such indulgence cannot be unconditional, particularly when the assessee had not brought the relevant factual position to the notice of the Assessing Officer at the appropriate stage.

8.7 Accordingly, subject to payment of cost of Rs. 5,000/- (Rupees Five Thousand only), the matter is restored to the file of the Ld. CIT(A)/Assessing Officer, as applicable, for fresh adjudication in accordance with the directions contained herein. The cost of Rs. 5,000/- shall be deposited by the assessee in the Poor Patient Relief Fund, PGI, Chandigarh, within one month from the date of receipt of this order, and proof of such deposit shall be furnished to the Ld. CIT(A)/Assessing Officer. 8.8 The Ld. CIT(A) shall thereafter adjudicate the appeal afresh, including the issue of limitation, and, if the delay is condoned in accordance with law, decide the grounds on merits after considering the findings of the Assessing Officer pursuant to the aforesaid verification. 8.9 It is made clear that in the event the assessee fails to deposit the cost of Rs.5,000/- within one month from the date of receipt of this order, the order passed by the Ld. CIT(A) shall stand restored and the appeal of the assessee shall stand dismissed.

7 8.10 In case the assessee complies with the aforesaid condition, the impugned order of the Ld. CIT(A) shall stand set aside for the limited purpose of fresh adjudication in accordance with law and the directions contained in this order. 8.11 The assessee shall cooperate with the Assessing Officer and furnish all necessary documents, including the documents relating to the partnership firm, PAN, bank account, books of account and financial statements, so that the issue may be brought to its logical conclusion without any further delay. Accordingly, the appeal of the assessee is allowed for statistical purposes, subject to the aforesaid condition and directions.

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH