DIGAMBAR KISAN NALAWADE,PUNE vs. INCOME TAX OFFICER WARD 14(5), PUNE

PER ASTHA CHANDRA, J.M.:

The appeal filed by the assessee is directed against the order dated 31-12-2025 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”) 2020-21. 2. Briefly stated, the facts of the case are that the assessee is an individual and did not file his original return of income for AY. 2020-21. Based on the information flagged in Non Filer Monitoring System (NMS) on the Insight Portal, it was found that the assessee entered into the following transactions during the relevant AY. 2020-21 under consideration - i. Cash withdrawals of Rs. 2,20,56,744/- from its bank account maintained with ICICI Bank Ltd.; ii. Deposit of cash of Rs. 9,31,000/- in bank account maintained with ICICI Bank Ltd. and iii. TDS statement – cash withdrawals Rs. 1,02,53,712/- which remained un-disclosed due to non filing of the return. Thus, the case of the assessee was reopened u/s. 147

2 of the Act by issue of notice u/s. 148 of the Act on 02-03-2024. However, there was no response filed by the assessee to the said notice u/s. 148 of the Act. Subsequent notice(s) u/s. 142(1) of the Act and show cause notice also remained un-complied with by the assessee. In the absence of any reply to the notice(s)/show cause notice and after obtaining confirmation from ICICI Bank u/s. 133(6) of the Act, the Ld.AO proceeded to complete the assessment on best judgment u/s. 144 of the Act and made the total addition of Rs. 2,23,01,852/-, treating the said amount of deposit(s) as unexplained money u/s. 69A of the Act r.w.s. 115BBE, vide his order passed u/s. 147 r.w.s. 144 of the Act, dt. 25-02-2025. 3. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A)/NFAC, who partly allowed the assessee’s appeal for statistical purposes by observing as under:

"Consideration of grounds, findings and decision The first set of grounds challenges the reopening proceedings under sections 148 and 148A. On examination of records, it is evident that reopening was initiated on the basis of specific information regarding substantial financial transactions and non-filing of return. At this stage, the law requires only existence of information suggesting escapement of income. The Hon'ble Supreme Court in Raymond Woollen Mills Ltd. v. ITO (236 ITR 34) has clearly held that sufficiency or correctness of material cannot be examined at the stage of reopening. Accordingly, the reopening proceedings are held to be valid and these grounds are rejected. The appellant has alleged violation of section 151A on the ground that proceedings were initiated by the Juri ictional Assessing Officer. This contention is not acceptable. The statutory framework permits juri ictional authorities to initiate proceedings, and no material has been placed on record to demonstrate any prejudice caused to the appellant. In absence of demonstrated juri ictional defect. this ground is rejected. The allegation of violation of principles of natural justice is also not borne out from record. Multiple notices under sections 148A, 148, 142(1) and show-cause notices were issued. Merely seeking adjournment without thereafter furnishing any explanation or evidence does not amount to denial of opportunity. The Hon'ble Supreme Court in CIT v, Best Judgment Assessment cases has consistently held that non-cooperation by the assessee justifies completion of assessment ex parte. This ground is therefore rejected. The core issue relates to addition of 2,23,01,852 as unexplained money under section 69A. It is a settled principle that the burden to explain the nature and source of credits in a bank account lies entirely on the assessee. The appellant has neither filed return of income nor furnished any documentary evidence explaining the deposits. Mere assertion of 3 being an agriculturist does not discharge this burden. The Hon'ble Supreme Court in CIT v. P. Mohankala (291 ITR 278) has held that where explanation offered is not supported by evidence, the addition is justified. Accordingly, the addition under section 69A is sustained in principle. The plea that agricultural income of 32,76,211 is embedded in the deposits is also unsupported by any evidence such as land records, crop details, sale bills or mandi receipts. Exemption under section 10(1) is not automatic and must be established by cogent material. In absence of proof, this claim cannot be accepted at the appellate stage. The ground relating to TDS/prepaid tax credit is found to be factual. However, no verification appears to have been carried out in the assessment order. Since grant of credit is a statutory right subject to verification, this limited issue deserves reconsideration.

As regards Rule 46A, though the appellant indicated intention to file additional evidence, no additional evidence has actually been furnished during appellate proceedings. Accordingly, no admission under Rule 46A arises and no remand report is warranted.

In view of the above discussion, the reopening of assessment and addition of unexplained money under section 69A are upheld on merits. However, the issue of verification and grant of TDS/prepaid tax credit is set aside to the Assessing Officer for limited verification as per law. Accordingly, the appeal is partly allowed for statistical purposes.”

“1. Under the facts and circumstances of the case and in law, Ld CIT(A) has erred passing appeal order without giving any opportunity of being heard to the appellant.

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Order pronounced in the open Court on 23-06-2026 (RAMA KANTA PANDA) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER Tadepalli Naga पुणे/Pune; Naga Murali Mohan Murali Mohan Date: 2026.06.29 10:05:21 दिन ांक/Dated : 23-06-2026 +05'30' TNMM

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