BHAVANI DEVI RAMESH,CHENNAI vs. DCIT, NON CORPORATE CIRCLE-7(1), CHENNAI

आयकर अपीलीय अधिकरण ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI माननीय श्री जॉजज जॉजज के., उपाध्यक्ष एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE GEORGE GEORGE K., VICE PRESIDENT AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1377/Chny/2026 ननिाारण वर्ा /Assessment Years: 2017-18 Bhavani Devi Ramesh. v. Deputy Commissioner of No.18/35, Door D, First Floor, Income Tax, Deepika Saroja Apartments, Non-Corporate Circle-7(1), Chitrakulam South Street, Chennai. Mylapore, Chennai-600 004. [PAN: AOGPB3531D] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. S. Girish Kumar, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. Biplab Gangopadhyay, JCIT Ld. DR सुनवाईकीतारीख/Date of Hearing : 29.06.2026 घोषणाकीतारीख /Date of Pronouncement : 16.07.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld.CIT(A)’), Nashik dated 23.02.2026 for the assessment year (hereinafter referred as the ‘AY’) 2017-18.

GROUNDS OF APPEAL 1. The order of the NFAC, Delhi dated 23.02.2026 vide DIN & Order No. ITBA/NFAC/S/250/2025- 26/1086410348(1) for the above-mentioned Assessment Year is contrary to law, fact and in circumstances of the case. 2. The NFAC, Delhi erred in confirming the assumption of jurisdiction under Section 147 of the Act and consequently erred in confirming the passing of the re-assessment order under Section 147 of the Act without assigning proper reasons and justification.

ITA No.1377/Chny/2026 (2017-18) Bhavani Devi Ramesh. 3. The NFAC, Delhi failed to appreciate that the re-assessment order was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 4. The NFAC, Delhi failed to appreciate that the assumption of jurisdiction under Section 147 of the Act was without sanction of law and ought to have appreciated that the consequential re- assessment order accordingly should be reckoned as bad in law. 5. The NFAC, Delhi failed to appreciate that having not followed the prescription of law/procedure for framing the re-assessment, the consequential re-assessment order passed should be reckoned as nullity in law for want of jurisdiction. 6. The NFAC, Delhi failed to appreciate that the passing of the order under Section 148A(d) of the Act by the JAO as against the passing of the such order by the FAO would completely defy the prescription of law / procedure in relation there to and hence ought to have appreciated that in the absence of valid foundation for issuance of notice under Section 148 of the Act in view of issuance of such notice by JAO instead of FAO, the consequential re-assessment should be considered as nullity in law. 7. The NFAC, Delhi failed to appreciate that the proposal made in the Finance Bill, 2026 forming part of the Budget documents by inserting a new Section 147A of the Income Tax Act, 1961 by creating two stages in the process of commencing and completing re-assessments, even if it is approved by both the houses as well getting the Presidential assent, the action taken earlier by the JAO in initiating the re-assessment could not be cured, while on the contrary to be reckoned as fatal to the proceedings of re-assessment. 8. The NFAC, Delhi erred in sustaining the addition of Rs.3,22,000/- being the cash deposits made by the appellant during the assessment year under consideration as unexplained money in terms of Section 69A of the Act in the computation of taxable total income without assigning proper reasons and justification. 9. The NFAC, Delhi failed to appreciate that the provisions of Section 69A r.w.s 115BBE of the Act had no application to the present facts and in circumstances of the case and ought to have appreciated that the pre-requisite conditions required for making an addition in terms of Section 69A r.w.s 115BBE of the Act were absent in the present case and in circumstances, there by negating the findings in relation there to. 10. The NFAC, Delhi failed to appreciate that in any event provisions of Section 115BBE of the Act had no application in view of the law declared by the Madras High Court on its applicability from Assessment Year: 2018-19 only, there by negating the findings in relation there to. 11. The NFAC, Delhi failed to appreciate that the addition made on the first component of the disputed addition to tune of Rs. 69,000/- was wrong. erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law and further ought to have appreciated that the explanation offered by the appellant was not considered in proper perspective, there by vitiating the findings forming part of the impugned order. 12. The NFAC, Delhi failed to appreciate that the addition made on the second component of the disputed addition to tune of Rs. 1, 45,000/- was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law and further ought to have appreciated that the explanation offered by the appellant was not considered in proper perspective, there by vitiating the findings forming part of the impugned order.

ITA No.1377/Chny/2026 (2017-18) Bhavani Devi Ramesh. 13. The NFAC, Delhi failed to appreciate that the addition made on the third component of the disputed addition to tune of Rs. 1, 08,000/- was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law and further ought to have appreciated that the explanation offered by the appellant was not considered in proper perspective, there by vitiating the findings forming part of the impugned order. 14. The NFAC, Delhi failed to appreciate that there was no independent examination of the bank statements of the appellant and further ought to have appreciated that the cash withdrawals made during the assessment year under consideration were completely over looked and brushed aside, while making the addition on the cash deposits, there by vitiating the disputed addition in its entirety. 15. The NFAC, Delhi failed to appreciate that in any event, having not independently examined the nature and source of the cash deposits/credits in the bank account maintained during the assessment year under consideration, the assessment of the entire value of cash deposits / credits as unexplained money of the appellant was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 16. The NFAC, Delhi failed to appreciate that the entire re-computation of taxable total income was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 17. The NFAC, Delhi failed to appreciate that having not adhered to the prescription of faceless regime, the consequential re-assessment and appellate order passed should be reckoned as bad in law. 18. The NFAC, Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 19. The Appellant craves leave to file additional grounds/arguments at the time of hearing. 2. The brief facts of the case are that the assessee was amongst the non-filers of the return u/s. 139 of the Act. As per the information through inside portal in accordance with the Risk Management Strategy, the assessee had made transaction regarding (i) Purchase of immovable Property of Rs. 75 Lacs, (ii) Sale of Equity Shares of Rs. 14,70,523/-, (iii) Interest on securities of Rs. 70,633/- and (iv) purchase of equity shares of Rs. 1,60,690/-. Based on above information and considering the reply of the assessee u/s. 148A(b) of the Act, a notice u/s. 148 of the Act was issued to the assessee on 28.03.2024. In response to the same the assessee filed her return of income on 10.04.2024 declaring total income of Rs. 81,830/-. Ultimately, the case of the assessee was assessed u/s. 147 r.w.s. 144B of the Act and addition u/s. 69A of the Act r.w.s. 115BBE of the Act amounting to Rs. 3.22 Lacs was made. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn

ITA No.1377/Chny/2026 (2017-18) Bhavani Devi Ramesh. dismissed the appeal of the assessee. The assessee being further aggrieved preferred the present appeal before us.

SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - GENERAL - STANDARD OPERATING PROCEDURE (SOP) TO BE FOLLOWED BY ASSESSING OFFICERS IN VERIFICATION OF CASH TRANSACTIONS RELATING TO DEMONETISATION INSTRUCTION NO.3/2017 [F.NO.225/100/2017/ITA-II], DATED 21-2-2017

ANNEXURE

Source Specific General Verification Guidelines 1. 1. Cash out of earlier income or savings 1.1 In case of an individual (other than minors) not having any business income, no further verification is required to be made if total cash deposit is up to Rs. 2.5 lakh. In case of taxpayers above 70 years of age, the limit is Rs. 5.0 lakh per person. The source of such amount can be either household savings/ savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut-off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc. 1.2 In case the individual claims that cash deposit includes savings of other person(s), the necessary information is required to be submitted under Para 4 or Para 5 below, as the case may be. 1.3 In case of an individual having no business income, if the cash out of earlier income or savings exceeds the above mentioned threshold, the AO needs to consider the remarks provided by the person under verification and seek further relevant information. During verification, the AO needs to consider the information provided by the person concerned, income earned during past years, source of such income, filing of ROI and income shown therein, cash withdrawals made from accounts etc. before quantifying the undisclosed amount, if any. In case the person under verification has filed return of Income, a reasonable quantum can be considered as explained while quantifying the undisclosed amount, if any. 4. Cash received from identifiable persons (with PAN) 4.1 No additional information is required to be submitted by the person under verification as the information will be pushed to the AO of the identifiable persons (with PAN). 4.2 In case the identifiable person (with PAN) does not confirm the transaction, the response will be referred back for further verification.

ITA No.1377/Chny/2026 (2017-18) Bhavani Devi Ramesh. 4.3 In case of a gift, it may be seen whether the same is taxable in the hands of the recipient under section 56(2) of the Act. 5. Cash received from identifiable persons (without PAN) 5.1 The AO needs to verify if the cash receipts are not in line with the normal practices of concerned business as mentioned in the earlier returns of Income after considering the remarks provided by the taxpayer, nature of business and earlier history before seeking additional information. 5.2 In case of other cash receipts, strategies for verification may be made in consultation with the Pr. CIT so that consistency is maintained in the entire charge based on nature of transaction.

(i) From perusal of the reply / details / documents submitted by the assessee, it is noticed that the assessee has received following credits in her bank account no. 32150795280 held with State Bank of India: Sr. No. Date Credit Description by the assessee 1. 03.06.2016 20000/- Not able to identify 2. 22.06.2016 49000/- Not able to identify Total 69,000/-

(ii) On perusal of statement of the SBI bank account No.00000032150795280, following credit entries of cash deposit were found: Sr. No. Date Credit Description by the assessee 1. 02.06.2016 40,000/- Cash deposit 2. 02.06.2016 40,000/- Cash deposit 3. 02.06.2016 40,000/- Cash deposit 4. 17.06.2026 25,000/- Cash deposit Total 1,45,000/-

(iii) In addition to the above, the assessee received Rs. 1.08 lakhs from her sister as loan.

ITA No.1377/Chny/2026 (2017-18) Bhavani Devi Ramesh. assessee u/s. 68 and 69A of the Act respectively. Grounds raised by the assessee are Partly Allowed with the relief of Rs. 2.5 lakhs in view of the Board instruction mentioned (supra).

Sd/- Sd/- (जॉजज जॉजज के) (गगन गोयल ) (GEORGE GEORGE K.) (GAGAN GOYAL) लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष /VICE PRESIDENT चेन्नई/Chennai, ददनाांक/Dated: 16th July, 2026. KB आदेश की प्रततललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रतततनधि/DR Digitally signed 5. गार्ड फाईल/GF K BABU by K BABU Date: 2026.07.27 10:45:26 +05'30'