NANAJI KARBHARI HIRE,NASHIK vs. ITO WARD 1, MALEGAON, NASHIK

PDF · subscribers
ITA 431/PUN/2026Status: DisposedITAT Pune25 May 2026AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter to the CIT(A) to decide afresh on merits, considering the additional evidence filed by the assessee and the legal ground challenging the reopening. The penalty appeal was also set aside to be decided after the quantum appeal.

What were the facts?

The assessee failed to file an income tax return for AY 2013-14. The Assessing Officer (AO) reopened the case and added cash deposits of Rs. 1,02,83,980/- to the assessee's income under Section 69A for being unexplained. The CIT(A) upheld the addition.

What were the issues?

Whether the cash deposits in the bank account were satisfactorily explained, and the validity of the reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 69A,Section 271(1)(c),Section 147,Section 148,Section 142(1),Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA

For Appellant: Shri Piyush Bafna &, Shri Aakash Parakh
For Respondent: Smt. Saumya Pandey Jain

Heard together (2 matters)

ITA No.2507/PUN/2025
ITA No.431/PUN/2026

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपीलीय अधिकरण “बी” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE

BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2507/PUN/2025 धििाारण वर्ा / Assessment Year : 2013-14 Mr. Nanaji Karbhari Hire, ITO,Ward-1, Malegaon At Post Dhavli Vihiir, Tal.-Malegaon Nashik-423203 Vs. PAN : AFYPH3308D अपीलार्थी / Appellant प्रत्यर्थी / Respondent

आयकर अपील सं. / ITA No.431/PUN/2026 धििाारण वर्ा / Assessment Year : 2013-14 Mr. Nanaji Karbhari Hire, ITO,Ward-1, Malegaon At Post Dhavli Vihiir, Tal.-Malegaon Nashik-423203 Vs. PAN : AFYPH3308D अपीलार्थी / Appellant प्रत्यर्थी / Respondent

Assessee by : Shri Piyush Bafna & Shri Aakash Parakh Department by : Smt. Saumya Pandey Jain Date of hearing : 20-05-2026 Date of 25-05-2026 Pronouncement : आदेश / ORDER PER ASTHA CHANDRA, JM : The above two appeals filed by the assessee are directed against the separate orders dated 18.08.2025 and 27.11.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Years (“AY”) 2013-14. In ITA No. 2507/PUN/2025, the assessee has challenged the quantum addition made by the Ld. Assessing Officer (“AO”) whereas ITA No. 431/PUN/2026 is filed against the levy of penalty u/s 271)1)(c) of the Income Tax Act, 1961 (the “Act”). For the sake of convenience, these appeals were heard together and are being disposed of by this common order.

2 ITA Nos.2507/PUN/2025 & 431/PUN/2026, AY 2013-14

ITA No. 2507/PUN/2025 2. Briefly stated, the facts of the case are that the assessee is an individual and did not file his return of income for the AY 2013-14. Based on the information available with the Department, it was found that the assessee had deposited cash of Rs.1,02,83,980/- in his saving bank account maintained with Bank of Baroda. The case of the assessee for AY 2013-14 was reopened u/s 147 of the Act by issue of notice u/s 148 of the Act on 31.03.2020. The assessee failed to file compliance in response to the said notice. Subsequently, notice(s) u/s 142(1) of the Act issued by the Ld. AO also remained un-complied with by the assessee. Due to lack of any compliance from the side of the assessee, the Ld. AO completed the assessment proceedings ex-parte determining the total income of the assessee at Rs.1,02,83,980/- adding the same to the total income of the assessee u/s 69A of the Act vide his order dated 13.09.2021 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act.

3.

On appeal, the Ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing as under : “5.3 Ground no. 3: Vide this ground of appeal, the appellant has challenged the addition made u/s 69A of the IT Act on account of unexplained money being deposited in the bank account. The appellant has stated that AO has erred in making addition of Rs. 1,02,83,980/- as unexplained deposit u/s 69A of the IT Act without considering the nature /source of the deposit and destination / withdrawal thereof. 5.4 I have duly examined and considered the facts of the case, Grounds of appeal, findings of the A.O with regard to addition of Rs. 1,02,83,980/- made u/s 69A of the IT Act, reply/submission of the appellant filed during appellate proceedings. From the perusal of assessment order, it is seen that cash deposits in the appellant's bank account totalling Rs. 1,02,83,980/- during FY 2012-13 was made during the year and the consideration. During the re-assessment proceedings, it is noted that no explanation, supporting documents, or evidence were provided by the appellant during assessment, despite repeated notices and opportunities. In this back ground, the AO invoked section 69A of the IT Act and treated the cash deposit in the bank account as unexplained money. 5.5 The appellant has strongly oppose the findings of the AO with regard to addition made u/s 69A of the IT Act in his written submission filed a furnished during the appellate proceedings. The appellant has stated that he is an agriculturist and also engaged in the trading of business and agricultural produce. Further, it has been stated that he purchases produce from nearby farmers and sold the same in the whole sale/ retail markets. All the transactions are cash based and routed through the bank account. These amounts are not in the nature of unaccounted income or undisclosed asset but business received from the rural agricultural activities. Further it has been submitted that AO, in the absence of any explanation or submission due to lack of compliance(during reassessment proceedings) presumed the

3 ITA Nos.2507/PUN/2025 & 431/PUN/2026, AY 2013-14

cash deposit to be unexplained and made the addition u/s 69A of the IT Act, 1961. The appellant attached the gram panchayat certificate with regard to his agricultural activities and trading (sale and purchase) of agricultural produces. The appellant has also cited several case law in support of his contention that the cash deposit in the bank account is sourced from trading of agricultural produce. 5.6 From the proper appreciation and evaluation of the findings of the AO with regard to addition of Rs. 1,02,83,980/- made u/ s 69A and reply /submission of the appellant in support of his contention. It is seen that AO invoked section 69A because there was no explanation offered /submitted during reassessment proceedings with regard to source of cash deposits in the bank account of the appellant. It is pertinent to note that "Unexplained cash deposits in bank accounts can be taxed as income unless satisfactorily explained." (Dhanalakshmi Bank v. CIT (2016) 387 ITR 409 (Ker):) Once a substantial cash deposit is established, burden of proof shifts to the assessee to satisfactorily explain the nature and source. (CIT v. P.K. Noorjahan (1999) 237 ITR 570 (SC)). Further, it is seen that although the appellant now claims in appeal that the cash deposits were business receipts (rural agricultural sales/trading), no documentary evidence, bank statements linking withdrawals/sales, or relevant books of account, sales bills, mandi receipts, or even affidavits were filed at appellant stage. While it is claimed that the agricultural sector is largely informal, even then, basic supporting evidence such as mandi receipts, details of land holding, crop records, or sales vouchers could be provided. This was not done at any stage. Even during appellate proceedings, the appellant has failed to furnished any documentary evidence with regard to trade receipts, mandi sale and purchase records of agricultural produce. Thus, it is held that the appellant has failed to provide any satisfactory explanation or supporting evidence regarding the source of cash deposits. In view of the legal position (Sumati Dayal, Smt. Shanta Devi, Roshan Di Hatti), the unexplained cash deposit is liable to be taxed as income and best judgment assessment is justified. Accordingly, the addition of Rs. 1,02,83,980/- u/s 69A as unexplained income is confirmed. Therefore, this ground of appeal is dismissed.”

4.

Aggrieved, the assessee is in appeal before the Tribunal challenging the addition made by the Ld. AO which has been confirmed by the Ld. CIT(A)/NFAC and also challenging the validity of the reassessment proceedings.

5.

The Ld. AR submitted that the assessee made due submissions before the Ld. CIT(A)/NFAC explaining the source of cash deposits, however, there was failure on the part of the assessee to file the relevant documentary evidences in support of its claim. He, further submitted that before Ld. CIT(A)/NFAC, the assessee had raised legal ground challenging the reopening of the case by issuing the notice u/s 148 of the Act, however, the Ld. CIT(A)/NFAC has not adjudicated the legal ground raised by the assessee and simply upheld the action of the Ld. AO in reopening the assessment proceedings without any proper adjudication on the legal ground. The Ld. AR filed certain additional evidence before the Tribunal

4 ITA Nos.2507/PUN/2025 & 431/PUN/2026, AY 2013-14

under Rule 29 of the Income Tax Rules, 1962 (the “I.T. Rules”) and requested for admission of the same as the same goes to the root of the matter and relevant for deciding the impugned issues in hand.

6.

The Ld. DR, on the other hand, supported the order of the Ld. CIT(A)/NFAC and the Ld. AO.

7.

We have heard the Ld. Representatives of the parties and perused the material available on record. The facts of the case are not in dispute. We find that the Ld. AO completed the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act vide his order dated 13.09.2021 determining the total income of the assessee at Rs.1,02,83,980/- on account of unexplained cash deposits u/s 69A of the Act. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee for the reasons reproduced in the preceding paragraphs. Admittedly, although, the assessee made due submissions explaining its case before the Ld. CIT(A)/NFAC, however, he failed to file supporting documentary evidence to substantiate its claim. Before the Tribunal, the assessee has filed additional evidence under Rule 29 of the Income Tax Rules to substantiate its claim with regard to the nature and source of the alleged cash deposits. It is also the grievance of the assessee that the Ld. CIT(A)/NFAC has not adjudicated the legal ground raised by the assessee before him challenging the validity of reopening proceedings properly. Considering the totality of the facts and in the circumstances of the case we deem it fit, in the interest justice, to restore the matter back to the file of the Ld. CIT(A)/NFAC to decide the impugned issue afresh on merits in light of the additional evidences filed by the assessee including the legal ground as per fact and law, after affording due opportunity of hearing to the assessee. Needless to say, the assessee shall provide full support in terms of filing the requisite details/ documents as may be required/called upon by the Ld. CIT(A)/NFAC on the appointed date, without seeking any adjournment under any pretext, unless required for a sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We direct and order accordingly. The grounds raised by the assessee are thus allowed for statistical purposes.

5 ITA Nos.2507/PUN/2025 & 431/PUN/2026, AY 2013-14

8.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

ITA No. 431/PUN/2026

9.

Since we have set aside the quantum appeal in ITA No. 2507/PUN/2025 to the file of the Ld. CIT(A)/NFAC with a direction to decide the impugned issue afresh on merits in light of the additional evidences filed by the assessee including the legal ground, we set aside the impugned penalty appeal also to the file of the Ld. CIT(A)/NFAC to decide the same afresh once the quantum appeal of the assessee is decided. The grounds raised by the assessee are accordingly allowed for statistical purposes.

10.

To sum up, both the appeals of the assessee in ITA No. 2507/PUN/2025 and ITA No. 431/PUN/2026 are allowed for statistical purposes.

Order pronounced in the open court on 25th May, 2026.

Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; दिन ांक / Dated : 25th May, 2026. रदि Ravi Kumar Digitally signed by Ravi Kumar Date: 2026.05.27 11:11:51 +05'30' आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, 4. पुणे / DR, ITAT, “B” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,

सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Recent GST High Court judgments

Search GST case law →