DHARAMPUR TALUKA RAMESHWAR ADIVASI PRAGATI MANDAL MALANPADA,VALSAD vs. ITO, WARD-5, VALSAD

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ITA 1267/SRT/2025Status: DisposedITAT Surat06 July 2026AY 2019-205 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee had not furnished bank statements and justifications for government grants during reassessment proceedings. To ensure natural justice, the matter was set aside to the AO for fresh verification and assessment.

What were the facts?

The assessee, an Association of Persons, failed to file its return of income for AY 2019-20. The Assessing Officer (AO) made an addition of Rs. 79,16,411/- on account of unexplained cash withdrawals, invoking Section 69A. The CIT(A) dismissed the assessee's appeal ex parte.

What were the issues?

Whether the addition made by the AO under Section 69A for unexplained cash withdrawals was justified without proper verification. Whether the ex-parte dismissal by the CIT(A) was appropriate.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 69A,Section 271AAC,Section 139(1),Section 80AC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (PHYSICAL HEARING) Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member ITA No: 1267/SRT/2025 Assessment Year: 2019-20 Dharampur Taluka Income Tax Officer Rameshwar Adivasi Ward-5, Pragati Mandal Vs Valsad Malanpada, Tal.Dharampur Dist: Valsad-396050 (Respondent) Gujarat PAN: AACAD7619M (Appellant) Assessee Represented: Shri Kiran K Shah, CA Revenue Represented: Shri Ajay Uke, Sr. D.R. Date of hearing : 28-04-2026 Date of pronouncement : 06-07-2026

O R D E R Per TR Senthil Kumar, Judicial Member: This appeal is filed by the assessee as against the ex-parte appellate order dated 24.10.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”), arising out of the reassessment order passed under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), relating to the Assessment Year 2019-20.

P a g e | 2 ITA No.1267/SRT/2025 Dharampur Taluka Rameshwar Adivasi Pragati Mandal Malanpada 2. Brief facts of the case are, the assessee is an Association of Persons, has not filed the return of income under section 139(1) of the Act, for the AY 2019-20. Whereas, information received by the Department, that the assessee made cash withdrawal of Rs.74,42,080/-, during the year and not filed the return, which remained the source unexplained. Therefore, notice u/s 148 of the Act dated 27.03.2023 was issued to the assessee. In response, the assessee filed a return of income on 24.04.2023 declaring NIL income. The return was taken up for scrutiny assessment, during the re-assessment proceedings, the assessee replied vide letter dated 09.02.2024 that the assessee is managing various Ashramshala and Chhatralayas in backward area. The Government gives the grant to these Ashramshala and Chhatralayas, which are situated in Tribal areas, which do not have banking facility. Since all the grants and expenditure are relating to Ashramshala and Chhatralayas, there was no income as declared in the return of income. 2.1. This explanation was not satisfied with the Assessing Officer thereby, he made an addition on account of entire cash withdrawal of Rs.79,16,411/- as unexplained money u/s 69A of the Act and also initiated penalty proceedings u/s 271AAC of the Act. 3. Aggrieved against reassessment order, the assessee filed an appeal before Ld. CIT(A), who had given three opportunities of hearing on 26.05.2025, 16.09.2025 and 06.10.2025. The assessee sought for an adjournment in the second hearing, however, the Ld. CIT(A) without granting further adjournment, dismissed the appeal ex parte.

P a g e | 3 ITA No.1267/SRT/2025 Dharampur Taluka Rameshwar Adivasi Pragati Mandal Malanpada 4. Aggrieved against the same, assessee is in appeal before us, raising following grounds of appeal:- 1) The learned CIT (A) grossly erred in confirming the addition of Rs. 79,16,411/- as per section 69A of the Act as the appeal proceedings could not be attended in the second notice as discussed in para 5 of the appeal order. 2) The appellant reserves right to add, alter and withdraw any grounds of appeal.

5.

Ld. Counsel appearing for the assessee submitted that, AO passed the impugned order on the ground that the assessee is not eligible for deduction under Section 80AC of the Act, as the assessee has not filed the return of income, as per provisions of Section 139(1) of the Act. 5.1. Ld. Counsel further submitted that, it is the case of trust that the grants received from the Government and out of which expenses were incurred by the Trust. The assessee had already explained the source of expenditure (Government grants) in para 8 of the order passed under Section 148A(d) of the Act and therefore, no addition is justified in invoking the Section 69A of the Act. Thereby, ld. Counsel appearing for the assessee, pleaded to allow the appeal. 6. Per contra, ld. Sr. DR brought to our attention to page No.8 of the assessment order, wherein Ld. A.O. categorically held that the source of cash withdrawals made in the Bank account were not furnished by the assessee, inspite of multiple opportunities given to the assessee. Thus, the initial onus cast upon the assessee is not discharged and therefore, sustained the addition made by the Ld. A.O.

P a g e | 4 ITA No.1267/SRT/2025 Dharampur Taluka Rameshwar Adivasi Pragati Mandal Malanpada 7. We have heard rival submissions and perused the materials available on record. Perusal of the order passed under Section 148A(d) of the Act dated 27.03.2023, the assessee made reply, that it has not withdrawn Rs.1,49,24,350/- as mentioned in the show cause notice and few details were produced before the Assessing Officer with audited balance sheet. However, during re-assessment proceedings, the assessee has not furnished the bank statements, wherein cash withdrawals were made by the assessee and not justified the grants received from Government. 8. Therefore, in the interest of natural justice, we deem it fit to set aside the matter back to the file of Jurisdictional Assessing Officer to verify the Bank statements maintained by the assessee and pass fresh assessment order in accordance with the provision of law by granting fair opportunity of hearing to the assessee. Needless to say, the assessee should cooperate by filing all necessary details and Bank statements before the Ld. J.A.O. to pass the order afresh. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 06/07/2026.

Sd/- Sd/- (Annapurna Gupta) (T. R. Senthil Kumar) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 06.07.2026 Mittali, Sr. PS

P a g e | 5 ITA No.1267/SRT/2025 Dharampur Taluka Rameshwar Adivasi Pragati Mandal Malanpada Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Surat

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