GURDEEP SINGH KAHLON,PURANPUR PILIBHIT vs. ITO-2(4),PILIBHIT-1, PILIBHIT

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ITA 31/LKW/2025Status: DisposedITAT Lucknow24 April 2026AY 2015-167 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and admitted additional evidence. Considering the interests of substantial justice, the case was restored to the Assessing Officer for a fresh assessment.

What were the facts?

The assessee did not file an income tax return, and the department had information about significant cash deposits in his bank account. The Assessing Officer treated these deposits as unexplained income, and the CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the cash deposits in the bank account were explained by the sale proceeds of tractors, and whether the assessee was provided adequate opportunity to present evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 68,Section 115BBE,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW

Before: SHRI. SUDHANSHU SRIVASTAVA & SHRI NIKHIL CHOUDHARY

For Appellant: Ms. Gurneet Kaur, Advocate

PER SUDHANSHU SRIVASTAVA, J.M.:

This appeal has been preferred by the Assessee against the order dated 28.10.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2015-16.

2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made cash deposits to the tune of Rs.1,07,22,000/- in his Bank Account No.684320110000080 maintained with Bank of India during the year under consideration. Therefore, the case of the assessee was reopened under section 147 of the Income Tax Act, 1961 (hereinafter called

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“the Act’) after issuing notice under section 148 of the Act to the assessee. In response to the notice under section 148 of the Act, the assessee filed his return of income, declaring a total income of Rs.2,24,882/-. During the course of assessment proceedings, the submission on behalf of the assessee was that the assessee was engaged in buying and selling of Tractors and the cash deposits were from the sale proceeds of the Tractors. However, the Assessing Officer (AO) rejected this version of the assessee by observing that no details are forthcoming to establish any linkage between the cash deposits and the sale of Tractors and, therefore, he treated the cash deposits as unexplained and added Rs.1,07,22,000/- to the income of the assessee under section 68 of the Act. The AO completed the assessment under section 147 read with section 144B of the Act, assessing the total income of the assessee at Rs.1,09,46,880/-.

2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271(1)(c) of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee ex-parte qua the assessee and confirmed the order of the AO.

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2.3 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

1.

Because on the facts and in the circumstances of the case the order of Ld. CIT(A) as also Assessment is bad in law and deserves to be quashed being illegal. 2. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law in dismissing of appeal no merits were dealt with while passing the appellate order even the bills of sales were not been considered whereas it was submitted that all the sales are in cash and the same are as per VAT records, hence liable to be set aside. 3. Because on the facts and in the circumstances of the case Ld. CIT (A) erred on facts and in law in confirming demand created by the learned Assessing Officer without considering the nature of business and proof of sales therefore said addition is liable to be deleted. 4. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) has further erred in sustaining addition made by the Ld. AO without dealing merits of the case that the entire cash deposits in bank accounts transferred to the supplier of tractor. Thus, the addition has been sustained on material and whimsically and the same deserves to be deleted. 5. Because on the facts and in the circumstance of the case, the order of Assessment has been passed in absolute violation of the principles of Natural Justice, without

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providing adequate opportunity of being heard and therefore deserves to be declared a nullity. 6. The appellant craves for leave to add, modify, amend or delete any other and further grounds of appeal with permission. 3.0 The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that there was a delay of 32 days in filing the appeal before the Tribunal. She further submitted that the assessee had filed an application dated 18.02.2025 for condonation of delay, duly supported by an Affidavit and Medical Certificate of the assessee and Death Certificate of the Counsel of the assessee, Shri Surya Singh Lodhi, stating therein that the impugned order dated 28.10.2024 passed by the Ld. First Appellate Authority was served on the e-mail address pertaining to the Counsel of the assessee, Shri Surya Singh Lodhi, who unfortunately died on 27.10.2024 and, therefore, the assessee had no access to the impugned order till December, 2024. It was further submitted that immediately after getting the impugned order, the assessee engaged a new Counsel and filed the appeal before the Tribunal and in this process, there was a delay of 32 days. The prayer of the Ld. A.R. was that the delay caused in filing the appeal was not deliberate, which may please be condoned and the appeal be heard on merits.

3.1 The Ld. Sr. D.R. objected to the delay being condoned.

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3.2 In view of the prayer made by the Ld. A.R., we condone the delay in filing of the appeal and admit the appeal for hearing.

4.0 The Ld. A.R. submitted that the assessee has filed an Application for admission of additional evidences under Rule 29 of the ITAT Rules and prayed that the additional evidences in the form of R.C. of Tractor, copy of Purchase Bills, Copy of statement and Ledger from Escorts Ltd. and Republic Auto Sales and copy of Vat Returns, were being sought to be filed for the first time before the Tribunal, as the same could not be filed before the authorities below. The Ld. A.R. submitted that these documents contain some important facts relating to the case of the assessee and prayed that the same may be admitted under Rule 29 of the I.T.A.T. Rules.

5.0 The Ld. Sr. D.R. had objected to the admission of the additional evidences.

6.0 Having heard both the parties on the issue of admission of additional evidences, we take a strong view against the conduct of the assessee vis-à-vis non-compliance before the AO and we impose a cost of Rs.5,000/- on the assessee to be deposited in the P.M. Care Relief Fund.

7.0 Having gone through the additional evidences filed before us, we are of the view that these evidences go to the very

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root of the matter and are germane to proper determination/assessment in the case of the Assessee. Accordingly, we admit the same.

8.0 The Ld. A.R. further prayed that in the interest of natural justice, the matter may be restored back the file of the AO where all the aforesaid additional evidences shall be produced to prove the transactions entered into by the Assessee during the year under consideration.

9.0 The Ld. Sr. D.R. objected to the restoration of appeal to the AO.

10.0 We have heard both the parties and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the Assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the AO with the direction to provide one more opportunity to the Assessee to present his case. We have already admitted the additional evidences filed by the Assessee in the form of R.C. of Tractor, copy of Purchase Bills, Copy of statement and Ledger from Escorts Ltd. and Republic Auto Sales and copy of Vat Returns under Rule 29 of the I.T.A.T. Rules. The Assessee shall produce them before the AO during the course of set aside

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proceedings. We also caution the Assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the Assessee.

11.0 In the result, the appeal of the Assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 24/04/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:24/04/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Assistant Registrar/DDO

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