GANESH RAMRAO KENJALE,PUNE vs. ITO WARD -3(3), PUNE

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ITA 3173/PUN/2025Status: DisposedITAT Pune23 June 2026AY 2011-127 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and, considering the assessee's plea for an opportunity to present their case, set aside the CIT(A)'s order. The matter was restored to the CIT(A) for a fresh decision after granting the assessee a reasonable opportunity of hearing.

What were the facts?

The assessee, an individual deriving agricultural income, did not file a return of income for AY 2011-12. The Assessing Officer (AO) reopened the case based on information about bank deposits and property sale, making additions for Long Term Capital Gain and unexplained cash deposits. The CIT(A) dismissed the appeal due to non-compliance by the assessee.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal without granting a sufficient opportunity to the assessee to present their case and evidence, and whether the additions made by the AO were correctly confirmed.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 142(1),Section 133(6),Section 144,Section 68,Section 250,Section 50B

AI-generated summary — verify with the full judgment below

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

Before: SHRI RAMA KANTA PANDA & Ms. ASTHA CHANDRA

For Appellant: Adv. Shivangi Gautam &
For Respondent: Shri Mukul Kulkarni

PER ASTHA CHANDRA, J.M.:

This appeal filed by the assessee is directed against the order dated 07-08-2025 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”], u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2011-12. 2. There is a delay of 52 days in filing of this appeal before the Tribunal, for which the assessee has filed an application seeking condonation of the said delay along with an affidavit, explaining therein the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the 2

3.

Briefly stated, the facts of the case are that the assessee is an individual and deriving income from agricultural activity. For AY 2011-12, the assessee did not file his return of income. Based on the information received through Non Filer Monitoring System (NMS), it was found that the assessee had deposited a sum of Rs. 15,73,500/- and Rs. 21,73,000/- in the bank accounts maintained at Shivajirao Bhosale Sahakari Bank and Union Bank of India respectively and sold immovable property valued at Rs. 38,80,000/- during the FY. 2010-11 relevant to the AY. 2011-12. Accordingly, the case of the assessee was reopened u/s. 147 of the Act, after issuing notice u/s. 148 of the Act on 29-03-2018. Thereafter, statutory notice u/s. 142(1) of the Act was issued and served upon the assessee. As the assessee failed to respond and after obtaining information from the above bank(s) u/s. 133(6) of the Act, the Ld. Assessing Officer (“AO”) issued a final show cause notice u/s. 144 of the Act, proposing addition of Rs. 63,66,385/-. In response thereto, the assessee himself appeared before the Ld.AO and submitted a copy of bank account statement of Bank of Maharashtra and purchase agreement of land sold in respect of sale of immovable property (land) valued at Rs. 38,80,000/-. Before the Ld.AO, the assessee claimed that the said land sold by the assessee is an agricultural land and hence, no capital gain arises. However, rejecting the plea of the assessee, the Ld.AO computed the Long Term Capital Gain (LTCG) at Rs. 29,69,000/- from sale of the said land and added the same to the total income of the assessee, after allowing cost of acquisition and indexed cost of acquisition amounting to Rs. 7,25,000/- and commission of Rs. 5,01,000/- paid to three commission agents by the assessee for sale of land through cheque from Bank of Maharashtra. As 3 regards the cash deposits, the assessee submitted during the course of assessment proceedings that he has made the following cash deposits during the FY. 2010-11:

Sr. Name of the bank Account No. Cash deposits No. (Rs.) 1 Shivajirao Bhosale Sahakari 008001000005232 15,73,500/- Bank 2 Union Bank of India 49802010018638 12,96,500/- 3 Bank of Maharashtra 20047039467 6,00,000/- 34,70,000/-

The assessee claimed that he had withdrawn Rs. 7,00,000/- approximately from Bank of Maharashtra during the period June, 2010 to September, 2010 and the same was again deposited in the bank accounts in October, 2010. However, no documentary evidence in support thereof was furnished by the assessee. The Ld.AO, therefore, added the amount of Rs. 27,70,000/- [Rs. 34,70,000 – 7,00,000] to the total income of the assessee u/s. 68 of the Act on account of unexplained cash deposits. The Ld.AO completed the assessment at an assessed income of Rs. 57,39,000/- thereby making an addition of Rs. 29,69,000/- on account of LTCG in respect of sale of immovable property and Rs. 27,70,000/- on account of unexplained cash deposits u/s. 68 of the Act, vide his order passed u/s. 144 r.w.s. 147 of the Act, dt. 26-12-2018. 4. Aggrieved, the assessee is in appeal before the Ld.CIT(A)/NFAC. Despite issuance of various notices of hearing, there was non-compliance of notices by the assessee. The Ld.CIT(A)/NFAC, therefore, dismissed the grounds of appeal raised by the assessee on account of failure to offer explanation and file documentary evidences in support of his claim. The Ld.CIT(A)/NFAC proceeded to decide the issue relating to addition of Rs. 29,69,000/- on account of LTCG, after calling for a remand report from the Ld.AO and dismissed this ground of appeal by observing as under:

4 “A perusal of the assessment order shows that the assessee had sold land admeasuring at Rs. 38,80,000/- situated at Village Bukum. Tuluka Mulshi. During the assessment proceedings, assessee submitted purchase deed, computation of capital gains. the assessee claimed that Rs. 5,01,000/- was paid to 3 commission agents for sale of land through cheque from Bank of Maharashtra Account. The assessee stated that land sold by his is an agricultural land but assessee did not submit documentary evidences in support of the claim that land sold is agricultural. Therefore, the plea of the assessee was not accepted and computed as Capital gains. During the appellate proceeding the appellant has granted opportunity to furnish documents in support of his claim. The appellant has not furnished any documentary evidence, hence it is clear that the appellant has no documents in support of his contention. The remand report in the case has been received and the AO in its report has given the following comments: "In connection with the above subject, it is stated that the assessee was granted opportunity to furnish documents in support of his claim, letter dated 17.11.2022 was issued to the assessee calling for documents on or before 23.11.2022. The letter was seen to be served on the mail ID of the assessee ganeshrk5555@gmail.com. However, the assessee has not furnished any documentary evidence till date.

Hence it is clear that the assessee has no documents in support of his contention. In absence of any further documentary evidence, it is held that the addition made in the assessment order are correct. Assessee has not furnished any documents to prove that the land sold is agricultural. Further, the assessee has also not furnished documents in support of purchase of agricultural land against the sale of land. The assessee has also not explained the source of cash deposits in his bank account. Hence, the cash deposits are held to be unexplained. In view of the facts stated above, it is proposed that the Hon'ble CIT(A) decide the case on merits". In view of the above, the AO has rightly made addition on this ground and the same is upheld or the appellant does not fulfill conditions as laid down under section 50B of the Act, 1961. The disallowance of 548 of the Act is held to be justified and the addition of Rs. 29,69,000/- on account of Long Term Capital Gain, in the hands of the assessee is hereby sustained and grounds raised by appellant are dismissed.”

4.1.

On the issue relating to addition of Rs. 27,70,000/- u/s. 68 of the Act on account of unexplained cash credits in the bank account of the assessee, the Ld.CIT(A)/NFAC relying on the provisions of section 68 of the Act and various decisions stated in his impugned order, dismissed this ground of appeal by observing as under:

“7.1 From the aforesaid decision, it is clear that Section 68 of the Act suggests that there has to be a credit of an amount in books maintained by an assessee and such credit would be charged to income tax, as the income of the assessee of that previous year, if the explanation offered by the assessee about the nature and source thereof is not found satisfactory. The expression "any sum is found to be credited in the books of the assessee" means all entries on the credit side as well as on the debit side in the books of account. The word "credited" in relation to "any sum" does not mean an entry only on the credit side but would also include any entry on the debit

5 side as well. The word "credited" means an entry of a sum in the books of account of the assessee.

7.

2 Considering the entirety of facts, circumstances and material on record and looking into preponderance of probabilities here the appellant has miserably failed to substantiate its claim of the deposits made amounting to Rs. 27,70,000/- treated as unexplained money and has also not even been able to establish that he could himself accumulate such huge amount from the sources disclosed, therefore, the AO is fully justified in making/confirming the disallowance the amount of Rs. 27,70,000/- found as unexplained money of the appellant. In this condition, the addition made by AO is factually and legally correct is upheld and the plea of the appellant on this issue is dismissed being devoid of any merits.”

5.

Dissatisfied, the assessee is in appeal before the Tribunal, raising the following grounds of appeal:

“1. That, on the facts and circumstances of the case, the order of the Ld. CIT (A), NFAC, in dismissing the appeal filed by the appellant is arbitrary, erroneous, contrary to law and is opposed to the principles of natural justice, equity and fair play.

2.

That, on the facts and circumstances of the case, the Ld. CIT (A), NFAC, has passed the order u/s 250 without giving sufficient opportunity of being heard and thus violating the principle of "audi alteram partem."

3.

That, having regards to the facts and circumstances of the case and in law, the Ld. CIT (A), NFAC, has erred in confirming the income assessed by the Ld. AO at Rs. 57,39,000/- without appreciating the correct facts of the case.

4.

That, on the facts and circumstances of the case, the Ld. CIT (A), NFAC, has erred in confirming the addition of Rs. 29,69,000/-on account of long term capital gain without giving sufficient opportunity to submit the relevant documents.

5.

That, on the facts and circumstances of the case, the Ld. CIT (A), NFAC, has erred in confirming the addition of Rs. 27,70,000/- u/s 68 on account of unexplained cash deposits without giving sufficient opportunity to submit the relevant documents.

6.

That, on the facts and circumstances of the case, the Ld. CIT (A), NFAC, has erred in dismissing the appeal preferred by the appellant by simply concluding that the appellant was not able to substantiate his claims and no documentary evidences against the additions made by the Ld. AO have been provided by the appellant.

7.

That, the Ld. CIT(A), NFAC, has erred in passing the impugned appellate order in a mechanical way highlighting the impugned assessment order, submissions of the appellant and the remand report without bringing any reasoning to the same thereby dismissing the appeal of the appellant by grossly passing a non-speaking order.

8.

That, on the facts and in the circumstances of the case, the Ld. CIT (A), NFAC, has passed the appellate order in a mechanical way, without application of mind and without considering the overall facts and circumstances of the case.

9.

That, the appellant may kindly be allowed to add, alter or modify any other points to the grounds of appeal at any time before or at the time of hearing. 10.That, the aforesaid grounds of appeal are without prejudice to each other.

6 11.Any other order in the interest of justice may kindly be passed.”

6.

The Ld.AR submitted that non-compliance to the notice(s) issued by the Ld.CIT(A)/NFAC was not intentional, but occurred due to certain unavoidable circumstances faced by the assessee at the time of appellate proceedings. He submitted that the Ld.CIT(A)/NFAC in his impugned order endorsed the findings of the Ld.AO due to lack of any explanation/documentary evidence filed by the assessee. The Ld.AR submitted that the assessee has a strong case on merits and, therefore, humbly prayed that in the interest of justice, an opportunity may be granted to the assessee to substantiate his case before the Ld.CIT(A)/NFAC by filing the requisite explanation/details/documents.

7.

The Ld.DR supported the order of the Ld.CIT(A)/NFAC and submitted that since the assessee failed to make compliance inspite of several opportunities granted, the Ld.CIT(A)/NFAC was completely justified in dismissing the appeal of the assessee.

8.

We have heard the Ld. representatives of the parties and perused the material available on record. Admittedly, there was non-compliance by the assessee to the notice(s) issued by the Ld.CIT(A)/NFAC. We observe that the Ld.CIT(A)/NFAC has dismissed the assessee‟s appeal for the reason which we have already reproduced in the preceding paragraphs. Before us, the Ld.Counsel for the assessee has submitted that the non- compliance to the notices of hearing before the Ld.CIT(A)/NFAC was not intentional and that the assessee is now in a position to substantiate its case before the Ld.CIT(A)/NFAC by filing the requisite explanation/details/documents in support of his claim. He has therefore, humbly prayed that an opportunity may be granted to the assessee to substantiate his case before the Ld.CIT(A)/NFAC by filing the requisite

7 explanation/details/documents. Considering the totality of facts and in the circumstances of the case, we deem it fit, in the interest of justice to set aside the impugned order of the Ld.CIT(A)/NFAC and restore the matter back to his file to decide the issue(s) raised by the assessee afresh as per fact and law, after allowing reasonable opportunity of hearing to the assessee. Needless to say, the assessee shall comply with the notices issued by the Ld. CIT(A)/NFAC and make his submissions before him on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

9.

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

Order pronounced in the open Court on 23-06-2026 (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER पुणे/Pune; Tadepalli Naga दिन ांक/Dated : 23-06-2026 Naga Murali Mohan Murali Mohan Date: 2026.06.23 16:47:08 TNMM +05'30'

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent

3.

The concerned Pr.CIT, Pune

4.

DR, ITAT, „A‟ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, ////

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