ARTI KASODHAN,DELHI vs. ITO PRATAPGARH NEW, LUCKNOW

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ITA 693/LKW/2025Status: DisposedITAT Lucknow24 April 2026AY 2018-197 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the case to the AO, granting the assessee one more opportunity to present her case and evidence for the cash deposits. The assessee was cautioned to fully comply with the AO's directions.

What were the facts?

The assessee declared an income of Rs. 3,84,510, but the AO found large cash deposits of Rs. 14,14,46,000 in bank accounts. The assessee failed to provide explanations, leading to a best judgment assessment and addition under Section 68.

What were the issues?

Whether the assessee was denied a proper opportunity of hearing by the lower authorities and if the addition under Section 68 for unexplained cash deposits was justified without proper inquiry.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(2),Section 142(1),Section 144,Section 143(3),Section 144B,Section 115BBE,Section 271AAC

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: Shri Ravi Pratap Mall, Advocate

PER SUDHANSHU SRIVASTAVA, J.M.:

This appeal has been preferred by the Assessee against the order dated 24.07.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2018-19.

2.0 The brief facts of the case are that the assesse had e- filed her return of income for the year under consideration on 09.10.2018, declaring a total income of Rs.3,84,510/-. The case of the assessee was selected for Limited Scrutiny under CASS for the reason of “large cash deposits in bank account(s)”. The Assessing Officer (AO) issued statutory notices to the assessee along with questionnaire, requiring the assessee to furnish the complete details of bank transactions entered into by the

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assessee during the year under consideration along with documentary evidences. However, there was no response from the side of the assessee. As per information gathered from the Insight Portal Data of the Department, the assessee had made cash deposits, totaling to Rs.14,14,46,000/- in various Bank Accounts during the year under consideration. The AO issued notices under sections 143(2) and 142(1) of the Income Tax Act, 1961 (hereinafter called “the Act’), requiring the assessee to furnish the requisite details, but there was still no response from the side of the assessee. The AO, therefore, proceeded to complete the assessment on the basis of Best Judgment Assessment. Accordingly, the AO issued show cause notice dated 23.04.2021 to the assessee, requiring the assessee to show cause as to why the provisions of section 144 of the Act may not be invoked, on the basis of material on record. The assessee vide reply dated 27.05.2021 submitted that all the required documents have been uploaded as on 25.04.2021. After examining the reply of the assessee, the AO held that the assessee had failed to furnish any explanation regarding the cash deposits and, therefore, the AO added Rs.14,14,46,000/- to the income of the assessee under section 68 of the Act. The AO completed the assessment under section 143(3) read with section

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144B of the Act, assessing the total income of the assessee at Rs.14,18,30,510/-.

2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271AAC of the Act.

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.

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

1.

That on the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), New Delhi has grossly erred in upholding the assessment order dated 01.06.2021 passed u/s 143(3) r.w.s. 144B of the Act, without granting adequate and meaningful opportunity of hearing which is in violation of the principles of natural justice. 2. That the learned NFAC has grossly erred in passing the impugned order without providing to the assessee a fair and proper and meaningful opportunity of being heard, violating the principles of natural justice and thus the impugned order is unsustainable both on fact and in law. 3. That in the facts and circumstances of the case and in law, the Ld. NFAC has grossly erred in confirming the

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addition 3 made by the learned assessing officer in respect of cash deposit made in the bank accounts of Rs.14,14,46,000/- under section 68 of the Income Tax Act, 1961. 4. The learned NFAC has grossly erred both in law as well as on facts in failing to appreciate that cash deposit made in the bank account was out of the business receipts which has duly been credited in the books of accounts of the appellant and hence addition made of the said sum under the provisions of section 68 of the Income Tax Act 1961 is unsustainable in law. 5. That learned NFAC has grossly erred both in law as well as on facts in failing to appreciate that since cash deposit made in the bank account of the appellant is business receipt which has already been credited in the profit and loss account, as such, addition of the said sum again would tantamount to taxing the same income twice which is impermissible in law. 6. That in the facts and circumstances of the case and in law, the learned NFAC has grossly erred in confirming the 6 assessment framed without proper enquiry OR verification, solely on the basis of alleged non-compliance, and without rejecting the books of account of the Appellant. 7. The learned NFAC has grossly erred in upholding the impugned addition by overlooking the submissions and relevant evidence on record, and without bringing any adverse material and hence the addition made is unsustainable in law.

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8.

That the learned NFAC has grossly erred in upholding the additions made by the learned Assessing Officer, which 8 additions have been made purely on suspicion, assumptions, and presumptions without bringing on record any adverse material, consequently, such findings are vitiated in law. 9. The appellant craves leave to add, amend, modify, OR withdraw any of the above grounds at the time of hearing. 3.0 The Ld. A.R. submitted before us that the NFAC has passed an order ex-parte qua the assessee, arbitrarily upholding the order passed by the AO without providing reasonable opportunity of hearing to the assessee. The Ld. A.R. further submitted that the AO had not allowed adequate opportunity of being heard to the assessee and had passed the impugned assessment order under section 143(3) read with 144B of the Act. It was submitted that the assessment was completed during peak Covid period and, therefore, the assessee could not furnish complete details before the AO. The Ld. A.R., therefore, prayed that, in the interest of justice, the matter may be restored to the file of the AO for deciding the same afresh after providing reasonable opportunity of being heard to the assessee. He submitted that the assessee undertakes to produce all the relevant documents in support of the cash deposits made in his bank accounts, before the AO.

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4.0 The Ld. CIT(DR) objected to the restoration of appeal to the file of the Assessing Officer and submitted that the appeal of the assessee be dismissed.

5.0 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 her 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 her case along with necessary evidences in support of the cash deposits of Rs.14,14,46,000/- in her bank accounts. 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 the material available on record even if it is ex-parte qua the assessee.

6.0 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:

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