MR. VISHAL,YAMUNANAGAR vs. INCOME TAX OFFICER, WARD-5, YAMUNANAGAR

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ITA 194/CHANDI/2026Status: DisposedITAT Chandigarh06 August 2026AY 2012-137 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the explanation regarding withdrawals and redeposits required proper examination. Therefore, the matter was remanded back to the CIT(A) for a fresh adjudication of the addition.

What were the facts?

The assessee appealed against the CIT(A)'s order upholding an addition of Rs. 51,19,340/- on account of unexplained cash deposits. The assessee claimed the cash originated from an agreement to sell land and was deposited, withdrawn, and redeposited in the bank.

What were the issues?

Whether the cash deposits in the bank account were adequately explained by the assessee's claim of funds from a land sale agreement and subsequent withdrawals/redeposits. The validity of the reopening of assessment and levy of penalty were also issues.

Which sections of the Income-tax Act were involved?

Section 69A,Section 271(1)(b),Section 234A,Section 234B,Section 234C,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI VIJAY VARMA

For Appellant: Shri Tarandeep Singh, Advocate
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr.DR
Hearing: 04.08.2026Pronounced: 06.08.2026

PER LALIET KUMAR, JM

The present two appeals have been filed by the assessee feeling aggrieved by the separate orders passed by the ld. Commissioner of Income Tax (Appeals) NFAC [in short ‘the CIT (A)’] dated 22.12.2025 and 26.05.2025 respectively for assessment year 2012-13. Both the appeals were heard together and are being disposed of by this common order for the sake of convenience and brevity.

ITA 193 & 194/CHD/2025 A.Y. 2012-13 2 2. In ITA 193/CHD/2026, the assessee has raised the following grounds of appeal :

That on facts and in law the impugned order dated 22n d 1. December 2025 passed by the Commissioner of Income Tax (Appeals) {hereinafter referred to as the "CIT(A)"} and order dated 30t h October 2019 passed by the Assessing Officer {hereinafter referred to as the "AO"} are bad in law and void ab initio. 2. That on facts and in law the CIT(A) has erred upholding an addition to total income of Rs. 51,19,340/- alleging that nature and source of cash deposits in bank remains unexplained. 2.1 That on facts and in law the CIT(A) has erred in upholding an addition to total income of Rs. 51,19,340/- invoking provisions of section 69A of the Act. 3. That on facts and in law the AO / CIT(A) have erred in not appreciating that nature and source of money deposited in bank account by the appellant was fully explained and substantiated. 4. That on facts and in law the AO / CIT(A) have erred in making / upholding the impugned addition premised suspicion, conjectures and surmises. 5. That on facts and in law the levy of interest u/s 234A, 234B and 234C are bad in law. 6. That on facts and in law the CIT(A) has erred in not appreciating that the action of AO in assuming jurisdiction to assess invoking provisions of section 147 of the Act is void ab initio and bad in law. 7. That on facts and in law the impugned orders is bad in law inter alia violative to the principals of natural justice. That the appellant prays for leave to add, alter, amend and/or vary the ground(s) of appeal at or before the time of hearing.

3.

In ITA 194/CHD/2026, the assessee has raised the following grounds of appeal :

1.

That on facts and in law the impugned order dated 26, hMay 2025 passed by the Commissioner of Income Tax (Appeals) {hereinafter referred to as the "CIT(A)"} and order

ITA 193 & 194/CHD/2025 A.Y. 2012-13 3 dated 30 t hJuly 2021 passed by the Assessing Officer {hereinafter referred to as the "AO"} are bad in law and void ab initio. 2. That on facts and in law the CIT(A) has erred upholding levy of penalty u/s 271 (1)(b) of the Act of Rs 50,000/- 3. That on facts and in law the impugned orders is bad in law inter alia violative to the principals of natural justice. That the appellant prays for leave to add, alter, amend and/or vary the ground(s) of appeal at or before the time of hearing.

4.

The ld. AR for the assessee has submitted that the assessee was ex-parte before the ld. AO and therefore, the matter may be remitted back to the file of the AO. However, it was submitted that the AO had issued the re-opening notice for an amount of Rs.50,96,000/- in the hands of the assessee. It was the contention of the assessee that against the ex-parte order passed by the AO, the assessee preferred the appeal before the ld.CIT (Appeals). The ld.CIT (Appeals) at page 8 of the order has deleted the addition of Rs.48 lacs in the hands of the assessee, however, has confirmed the addition of Rs.51,19,340/-.

5.

Against the confirmation of the addition of Rs.51,19,340/- the assessee is in appeal before us.

6.

It was submitted by the ae that the AO has failed to reconcile the bank statement which clearly shows that there was a withdrawal immediately after deposit of the amount of Rs.40 lacs by the assessee and the same amount has been re-deposited by the assessee in the bank. The assessee has drawn our

ITA 193 & 194/CHD/2025 A.Y. 2012-13 4 attention to the bank account and the bank statement filed before us. He had also drawn our attention to the Agreement to Sell entered between Shri Joga Singh and Shri Inderjeet Singh dated 12.04.2011 under which the father of the assessee allegedly has received Rs.80 lacs from the buyer and therefore, there was explanation for availability of cash of Rs.40 lacs and its subsequent deposit in the bank account of the assessee.

7.

The ld. DR has submitted that the matter should not have been remanded back to the file of the AO as all the evidences were filed by the assessee before ld.CIT (Appeals).

8.

We have heard the rival submissions of both the parties and carefully perused the material available on record. The principal plank of the assessee's case rests upon an unregistered Agreement to Sell dated 12.04.2011, whereby it is claimed that the assessee's father had agreed to sell his land for a total consideration of Rs.80,00,000/- and had received the entire sale consideration in cash. It is the specific case of the assessee that, out of the said amount, a sum of Rs. 40,00,000/- was handed over by his father to him, which constituted the source of the cash deposits made in his bank account. The assessee has further explained that, after the initial deposit of the said amount, he had made withdrawals from time to time for business and personal requirements and, upon non-utilisation of such

ITA 193 & 194/CHD/2025 A.Y. 2012-13 5 cash, it was subsequently redeposited into the same bank account. Thus, the availability of cash arising from the alleged agreement to sell, together with subsequent withdrawals and redeposits in the bank account, constitutes an integrated and inseparable chain of events. The correctness of the explanation regarding the withdrawals and corresponding re-deposits, therefore, requires a proper examination of the bank statements and the cash flow maintained by the assessee.

9.

Having considered the totality of the facts and circumstances of the case, we are of the considered opinion that the ends of justice would be adequately served by remanding the matter to the file of the learned CIT(A) and not to the Assessing Officer. If the matter were to be restored to the Assessing Officer for a de novo assessment, it may expose the assessee to the possibility of reopening the entire addition of Rs. 91,00,000/-, including the relief already granted by the learned CIT(A). Such a course would place the assessee in a worse position than he was before filing the present appeal, which is impermissible in law, as an appellant cannot be placed in a position more prejudicial than that arising from the impugned order merely because he has exercised his statutory right of appeal.

10.

Accordingly, we restore the matter to the file of the learned CIT(A) with a limited direction to examine afresh the assessee's

ITA 193 & 194/CHD/2025 A.Y. 2012-13 6 explanation regarding the withdrawals and subsequent re- deposits reflected in the bank account, after duly considering the relevant bank statements, cash flow and any other supporting evidence that may be furnished by the assessee. It is clarified that the relief already granted by the learned CIT(A) in respect of Rs.40,00,000/- shall remain undisturbed and shall not form part of the remand proceedings. The scope of the remand shall be confined exclusively to the sustainability of the addition of Rs.51,19,340/-, and no other issue shall be reopened. The above-said exercise shall be carried out by the ld. CIT(A) without being influenced by any of our observation or of the earlier order passed by the CIT(A). Needless to say, the assessee shall provide a full cash-flow statement and other evidence demonstrating that the same very amount which was withdrawn from the bank was re-deposited in the bank.

11.

In the result, the quantum appeal filed by the assessee is treated as allowed for statistical purposes.

ITA No. 194/CHD/2026

12.

As we have remanded the quantum appeal to the file of the ld.CIT (Appeals), therefore, we do not deem it appropriate to adjudicate the present appeal which is the penalty appeal and the same is also remanded back to the file of ld.CIT (Appeals) for

ITA 193 & 194/CHD/2025 A.Y. 2012-13 7 fresh adjudication that shall be undertaken by the ld.CIT (Appeals) alongwith the quantum appeal.

13.

Accordingly, both the appeals are allowed for statistical purposes.

Order pronounced on 06 th August,2026.

Sd/- Sd/-

(VIJAY VARMA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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