GOPI CHAND,SONARPURA VARANASI vs. ITO-2(2), VARANASI

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ITA 220/VNS/2024Status: DisposedITAT Varanasi09 July 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issues in dispute back to the file of the Assessing Officer. The Assessing Officer was directed to pass a fresh order after providing a reasonable opportunity to the assessee to present their case.

What were the facts?

The assessee's income was determined at Rs. 15,86,780/- by the Assessing Officer under section 144. The assessee's appeal against this order was dismissed by the CIT(A). The assessee contended that the orders were passed without a reasonable opportunity to present their case.

What were the issues?

Whether the assessment and appellate orders were passed without providing a reasonable opportunity to the assessee to present their case and documentation.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 115BBE,Section 271AAC(1),Section 272A(1)(d),Section 142(1),Section 143(2),Section 142(2A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VARANASI BENCH ‘SMC’, VARANASI

Before: SHRI ANADEE NATH MISSHRA

For Appellant: Shri Jai Pradhwani, CA

PER ANADEE NATH MISSHRA:A.M.

(A) This appeal has been filed by the assessee against the impugned appellate order of learned CIT(A)/National Faceless Appeal Centre (NFAC), Delhi vide order dated 18.10.2024 for the AY 2017-18. The assessee has raised the following grounds of appeal: “1. Erroneous Addition as Undisclosed Income: That the learned A.O. has erred in law and on facts in making addition of Rs.12,09,000/- by adding the amount u/s 69A as undisclosed income & taxed u/s 115BBE since the amount was not part of income but was actually deposited by the Assessee in his bank account and full bank details were

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also submitted and hence it should not have been added as undisclosed Income. 2. Interest Imposition: The AO has incorrectly imposed interest under sections 234A and 234B on the additions made under section 115BBE, as the addition was made without evidence of concealment of income. This imposition lacks justification given the facts that were provided concerning the source of funds. 3. Premature Penalty Notices: The learned AO has issued notices to show cause why a penalty should not be levied under section 271AAC(1) and 272A(1)(d) for potential concealment of income and noncompliance with notices, respectively. The appellant maintains that there was no concealment of income, and the grounds for issuing such notices are unwarranted. 4. Lack of Opportunity of Hearing: The AO acted under section 144 of the Act without providing adequate opportunity for the appellant to present his case and furnish the necessary documentation to support the source of cash deposits. The submissions made by the appellant regarding the source of funds and their legitimate nature were not adequately considered in the assessment. 5. Improper Issuance of Show Cause Notice The learned Assessing Officer (A.O.) has erroneously issued a show cause notice regarding the imposition of a penalty under section 272A(1)(d) of the Income Tax Act, 1961, claiming non-compliance with statutory notices issued under section 142(1), section 143(2), and the directions under section 142(2A). The appellant asserts that there was no concealment of income or willful non-compliance with the notices, and all reasonable attempts were made to comply with the requirements within the framework established by the Income Tax Act. Hence, the issuance of this show cause notice is both unwarranted and legally flawed.

6.

Combination of Family Income: The AO has ignored that the appellant, as the head of the family, kept cash for household requisites and managed the financial resources of his dependents, including wife and daughters. The income earned and saved by family members should be taken into account in validating the cash deposits made during the demonetization period.

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7.

Non Consideration of Submissions: The appellant asserts that all relevant bank statements and documentation were submitted to the AO to support the sources of deposits. The AO failed to acknowledge these documents in the assessment order, which is indicative of a procedural lapse in the assessment process. 8. Impact of Unique Circumstances: The nature of the deposits and withdrawal during the demonetization period should be understood within the unique circumstances faced by taxpayers. The deposits were meant for personal and familial obligations, including preparation for the marriage of the appellant's daughter, which demonstrates legitimacy. 9. General Plea: The appellant also submits a general plea for relief and review of the entire assessment process and requests a stay on the demand proceedings until a comprehensive adjudication of the appeal is made Conclusion: The appellant requests the Honorable Authority to reconsider the decision passed by the AO based on the above grounds and to provide a just resolution to the matter, thereby ensuring fair treatment under tax laws and regulations. Prayer: In light of the above grounds of appeal, the appellant humbly requests that the Honorable Tribunal kindly allow this appeal and: 1. Set aside the assessment order dated 03/12/2019 passed by the A.O. under section 144 of the Income Tax Act, 1961. 2. Delete the additions made under section 69A and all consequent issues. 3. Grant a stay on demand proceedings until the appeal is resolved. 4. Provide any further relief as deemed just and appropriate in the interest of justice.”

(B) In this case, assessment order dated 03.12.2019 was passed by the Assessing Officer under section 144 of the Income Tax Act, 1961 (the Act) wherein the assessee’s income was determined at Rs. 15,86,780/-. The

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assessee’s appeal against the assessment order was dismissed by the Learned CIT(A) vide impugned appellate order dated 18.10.2024. The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 18.10.2024.

(C) At the time of hearing, the Learned Authorized Representative for the assessee submitted that the impugned appellate order and the assessment order were passed without providing reasonable opportunity to the assessee. He submitted that the issues in dispute regarding additions made in the assessment order should be restored back to the file of the Assessing Officer with the direction to pass denovo order in accordance with law after providing reasonable opportunity to the assessee. The Learned Departmental Representative for Revenue expressed no objection to this. In view of the foregoing, after hearing both sides and after due consideration of materials on record; the issues in dispute regarding additions made in the assessment order are restored back to the file of the Assessing Officer, with the direction to pass denovo order in accordance with law, after providing reasonable opportunity to the assessee.

(D) All grounds of appeal are treated as disposed off, in accordance with the aforesaid directions. For statistical purposes, the appeal is partly allowed.

(Order was pronounced in the open court on 09/07/2026)

Sd/- (ANADEE NATH MISSHRA) Accountant Member Date: 09/07/2026 SK, Sr.PS

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Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., 5. CIT(A) Senior Private Secretary Income Tax Appellate Tribunal Lucknow

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