SARVADA SHIKSHA SAMITI,DELHI vs. ITO WARD EXEMPTION 2(1), DELHI

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ITA 933/DEL/2026Status: DisposedITAT Delhi25 May 2026AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that while the notice under Section 142(1) was issued appropriately, there was inadequate fact-finding by the CIT(A). Therefore, the matter was set aside and remanded to the AO for a fresh assessment.

What were the facts?

The assessee, engaged in school education, failed to file a return of income for AY 2017-18. The AO proceeded with a best judgment assessment, adding cash deposits and other credit entries under Section 69A due to non-compliance with notices.

What were the issues?

Whether the assessment framed without issuing a notice under Section 148 was illegal, and whether the additions made under Section 69A were justified given the lack of proper verification of accounts.

Which sections of the Income-tax Act were involved?

Section 69A,Section 142(1),Section 144,Section 148,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F” NEW DELHI

Before: SHRI MAHAVIR SINGH & SHRI SANJAY AWASTHI

For Appellant: Shri Sanjeev Saxena, FCA
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 25.05.2026

ITA No.933/Del/2026 SARVADA SHIKSHA SAMITI IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A No.933/Del/2026 Assessment Year: 2017-18 SARVADA SHIKSHA SAMITI, Vs. ASSESSING OFFICER, Sadat Pur Extension, Ward Exemption 2(1), Karawal Nagar, Main Road, Civic Centre, JLN Marg, Delhi 110094. New Delhi, PAN No. AAATS4236J Delhi 110001. Appellant Respondent Assessee by Shri Sanjeev Saxena, FCA Revenue by Ms. Harpreet Kaur Hansra, Sr. DR Date of hearing: 25.05.2026 Pronouncement on 25.05.2026 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1.

This appeal arises from order dated 26.11.2025, passed by Ld. CIT(A)-NFAC, Delhi u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”). In this case, the assessee is engaged in imparting school education. However, it was noticed by the Ld. AO that the assessee did not file any return of income for AY 2017-18 and thereafter, the Ld. AO issued a notice u/s 142(1)(i) of the Act requiring the assessee to file a return of income (ROI). It is recorded in the Ld. AO’s order dated 30.12.2019 that the assessee failed to furnish ITR in response to the said notice u/s 142(1)(i) of the Act. Thereafter, the Ld. AO utilized

ITA No.933/Del/2026 SARVADA SHIKSHA SAMITI information gathered from dedicated Income Tax resources to discover that Rs.18,96,500/- was deposited in cash during the demonetization period. The Ld. AO has recorded that notices u/s 142(1)(i) and 142(1)(ii) of the Act issued between 6.3.2018 and 21.12.2019 were delivered but there was no response from the side of the assessee. Thereafter, the Ld. AO proceeded to pass a “best judgment” assessment order and added Rs.71,45,110/- u/s 69A of the Act, representing cash deposits and other credit entries in the bank accounts of the assessee.

1.1 The assessee approached the first appellate authority, where also he could not succeed on the basis of findings given on pages 4 to 6 of the impugned order. Briefly, the assessee filed fresh evidence before the Ld. CIT(A) which was admitted under Rule 46A but after a remand report from the Ld. AO it was held by the Ld. CIT(A) that the assessee has failed to produce any books of account or any document in support of his claim about the cash and other deposits representing fees collected from students. It has been held by the Ld. CIT(A) that the new evidence filed before him could not be independently verified. The Ld. CIT(A) has adversely commented on the documentation available with the assessee in para 6.7 to 6.10 of the impugned order.

1.2 Further aggrieved, the assessee has approached the ITAT with grounds of appeal which are detailed and argumentative, hence, are not extracted here. However, the assessee has also filed additional grounds

ITA No.933/Del/2026 SARVADA SHIKSHA SAMITI of appeal which were requested to be considered. These additional grounds may be extracted as under: -

1.

“That on the facts and in the circumstances of the case and in law, the impugned assessment is illegal, void and non-est as it being a case of escaped income, the AO ought to have framed assessment by issuing notice u/s 148 followed by notice u/s 143(2) which is sine qua non to assume jurisdiction. 2. That the illegal and ad hoc additions of cash and other deposits u/s 69A by the Ld. AO and upheld by Ld. CIT(A)-NFAC, Delhi were incorrect under the law and to the facts of the case as the correctness, completeness and bona fides of books of accounts maintained on basis of which audited financials were prepared and held on record were neither doubted nor controverted nor rejected by AO u/s 145(3) while making assessment of the Income Ax Act, 1961 or during remand proceedings. Explanation 2(1) of section 147 Where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income tax.”

2.

Before us the Ld. AR argued that once an assessee had not filed the return of income then the only recourse available with the AO would be to issues a notice u/s 148 of the Act. In this case, this was not done and therefore the assumption of jurisdiction was illegal. The Ld. AR further argued on merit and stated that the assessee was under a genuine belief that it was not required to file any return of income since his income would be exempt under the Act. It was the submission that the assessee was maintaining records and other documents which would be required for establishing the veracity of the income/expenditure. The Ld. AR

ITA No.933/Del/2026 SARVADA SHIKSHA SAMITI relied on a number of authorities ostensibly in support of his claim and alleged illegal assumption of jurisdiction.

2.1 The Ld. DR argued that the AO had issued a notice on 6.3.2018, which for AY 2017-18 would be covered u/s 139(4) of the Act since it was within AY 2017-18. Since the AO had issued the 142(1)(i) notice within the assessment year under consideration, hence, there was no requirement to initiate proceedings u/s 147/148 of the Act. Regarding the merit it was mentioned that neither was any ROI filed nor was any compliance made before the Ld. AO. Even the new evidence filed before the Ld. CIT(A) was not capable of being independently verified.

3.

We have considered the Ld. AR/DR. We find that the additional ground 1 is not maintainable on the ground that notice u/s 142(1) was issued appropriately by the Ld. AO and thereafter, since no compliance whatsoever was made, hence, the Ld. AO correctly passed an order u/s 144 of the Act. Regarding additional ground no.2 it is felt that there is inadequate fact finding at the level of Ld. CIT(A) to enable any meaningful adjudication at our level. In the interest of substantive justice, we set aside the impugned order and remand this matter back to the file of Ld. AO for fresh assessment. The assessee would be expected to provide complete set of accounts to the Ld. AO and all other relevant documents so that the correct income of the assessee can be determined. It may also be mentioned that the Ld. AR has pointed out

ITA No.933/Del/2026 SARVADA SHIKSHA SAMITI that the ITO, Ward 60(7), Delhi was his Assessing Officer and to avoid any confusion, the matter may be remitted back to this Officer. On this issue, we need to only mention that it is a settled position that an Assessing Officer having jurisdiction must frame the assessment order. We would expect the Revenue Authorities to be mindful of this fact in this case.

4.

In the result, appeal is allowed for statistical purposes.

Order pronounced in the open court on 25.05.2026

Sd/- Sd/- (MAHAVIR SINGH) (SANJAY AWASTHI) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 01.06.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

ITA No.933/Del/2026 SARVADA SHIKSHA SAMITI Sr. No. Particulars Date 1 Date of dictation of Tribunal Order 25.05.2026 2 Date on which typed draft Tribunal Order is placed before the 26.05.2026 Dictation Member 3 Date on which typed draft Tribunal Order is placed before the 01.06.2026 other Member (in the case of DB) 4 Date on which the approved draft Tribunal Order comes to the 01.06.2026 Sr. P.S. /P.S. 5 Date on which the fair Tribunal Order is placed before the 01.06.2026 Dictating Member for sign 6 Date on which the fair Order is placed before the other Member 01.06.2026 for sign (in the case of DB) 7 Date on which the signed order comes back to the Sr. P.S. /P.S 01.06.2026 for uploading on ITAT website 8 Date of uploading, if not, reason for not uploading 01.06.2026 9 Date on which the file goes to the Bench Clerk 01.06.2026 10 Date on which order goes for xerox 11 Date on which the file goes for endorsement 12 Date on which the file goes to the Superintendent/O.S. for checking 13 Date on which the file goes to the Assistant Registrar for signature on the order 14 Date on which the file goes to dispatch section for dispatch the Tribunal Order 15 Date of dispatch of order 16 Date on which file goes to Record Room after dispatch the order

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