INCOME TAX OFFICER, WARD-1, PANIPAT , PANIPAT vs. NAVEEN RATHI, PANIPAT

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ITA 2618/DEL/2026Status: DisposedITAT Delhi17 July 2026AY 2017-184 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found that the financial transactions required proper verification by the AO. The CIT(A)'s order to set aside the issue and direct a fresh assessment with opportunities to the assessee was deemed just and proper.

What were the facts?

The Revenue appealed against the CIT(A)'s order which set aside the assessment to the AO. The issue involved was unexplained cash deposits of Rs. 1,22,50,000/- during demonetization.

What were the issues?

Whether the CIT(A) was justified in setting aside the assessment for proper verification of cash deposits and providing an opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH‘SMC’: NEW DELHI

For Respondent: Shri Manoj Kumar, Sr. DR
Hearing: 13/05/2026Pronounced: 17/07/2026

The instant appeal filed by the Revenue is directed against the

order dated 21.01.2026 passed by the National Faceless Appeal

Centre (NFAC), Delhi [hereinafter referred to as ‘the Ld. CIT(A)]

arising out of the assessment order dated 21.11.2019 passed by the

AO under Section144 of the Income Tax Act, 1961 (hereinafter

referred as ‘the Act’) for Assessment Year 2017-18 wherein the Ld.

CIT(A) has been pleased to set aside the issue to the file of the Ld.

AO with a direction to make a fresh assessment order upon giving

ITA No.2618/Del/2026 2 ITO vs. Naveen Rathi

adequate opportunities to the assessee/appellant and complying

with extent Rules and provisions oflaw and the principle of nature

justice too. It is an admitted fact that the Ld. AO has passed orders

under Section 144 of the Act whereas issue involved in this case is

cash deposit of Rs.1,22,50,000/- which was treated as unexplained

under Section 69A of the Act. It is the case made out of the

assessee that sufficient opening cash balance as on 01.04.2026

supported by prior bank withdrawals and agricultural receipts were

though made available to explain the deposits, even during the

demonetization, the same was not verified, by the authorities below.

2.

Having regard to the nonexamination of the financial

transactions in the present facts and circumstances of the case,

whichin our considered opinion needs proper verification, which

ought to have been done by the Ld. A.O; the order impugned by

setting aside the issue to the Ld. AO with a direction for fresh

consideration of the issue upon granting opportunities of being

heard to the assessee and upon considering the evidence on record

is found to be truly just and proper so as not to warrant

ITA No.2618/Del/2026 3 ITO vs. Naveen Rathi

interference. The appeal, therefore, filed by the Revenue is found to

be devoid of any merit, and, thus dismissed.

3.

In the result, the appeal filed by the Revenue is, thus, dismissed.

Order pronounced in the open Court on 17.07.2026.

Sd/- S Sd/- (MADHUMITA ROY) JUDICIAL MEMBER Dated: 17.07.2026 *PK/ R.N, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

ITA No.2618/Del/2026 4 ITO vs. Naveen Rathi

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