HARI RAM,FAIZABAD vs. INCOME TAX OFFICER, NFAC, , DELHI

ITA 942/LKW/2025Status: DisposedITAT Lucknow15 May 2026AY 2020-217 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, while noting that none appeared for the assessee, rejected an adjournment application and proceeded to hear the appeal. The Departmental Representative relied on the lower authorities' orders. The Tribunal observed that the AO noted the assessee's failure to furnish supporting documents for cash deposits, and the NFAC also noted the absence of uploaded documents. Despite the assessee's absence and the findings of the lower authorities, the Tribunal decided to grant the assessee one last opportunity to present their case. The file was restored to the Assessing Officer with a direction to provide one more opportunity to the assessee to present necessary evidences and documents. The assessee was cautioned to fully comply with the AO's directions in the set-aside proceedings, failing which the AO would be at liberty to pass an ex-parte order based on available material. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Hari Ram, a farmer, failed to file a return of income for Assessment Year 2020-21. The Income Tax Department had information regarding cash deposits of Rs. 23,30,906/- in the assessee's bank account. The assessment was reopened under Section 147 of the Income Tax Act, 1961. The assessee filed a return declaring Rs. 76,770/-. The Assessing Officer (AO) issued notices under Sections 142(2) and 142(1) seeking explanation for the cash deposits. The assessee provided replies. A notice under Section 133(6) was issued to the Sub-Registrar for property transaction details, but no reply was received. The AO treated Rs. 23,30,906/- as unexplained money under Section 69A and added interest income of Rs. 76,772/-. The total income was assessed at Rs. 46,73,448/-. Penalty proceedings under Sections 270A and 271AAC were also initiated. The National Faceless Appeal Centre (NFAC), Delhi, dismissed the assessee's appeal.

What were the issues?

1. Whether the reopening of assessment under Section 147 of the Income Tax Act, 1961, was valid, given the assessee's contention that it was based on mere suspicion and not tangible material. 2. Whether the principles of natural justice were violated by not providing adequate opportunity for the assessee to present documents and explanations, and by passing the assessment order in haste without considering submissions. 3. Whether the addition of Rs. 23,30,906/- as unexplained money under Section 69A was justified, considering the assessee's claim of providing details of time deposits (FDRs) from sale proceeds of rural agricultural land, which the AO allegedly ignored and wrongly treated as cash deposits, possibly including duplicate information. 4. Whether the addition of Rs. 21,89,000/- as short-term capital gain on the sale of immovable property was incorrect, as the assessee claimed it was rural agricultural land (a long-term asset) and submitted relevant documents for exemption. 5. Whether the addition of Rs. 76,772/- as interest income was unjustified, as the assessee claimed it was disclosed in the return of income and the AO failed to consider submissions and the ITR. 6. Whether the initiation of penalty proceedings under Sections 270A and 271AAC was wrongful, given the absence of deliberate concealment or misreporting/underreporting of income. Assessee's Contentions: - Reopening under Section 147 was invalid due to lack of valid reasons and tangible material. - Principles of natural justice were violated; inadequate opportunity and hasty order. - Addition under Section 69A was unjustified; explanation of FDRs from land sale proceeds ignored; time deposits wrongly treated as cash deposits; duplicate information added. - Addition as short-term capital gain was incorrect; property was rural agricultural land (long-term asset); exemption documents were presented. - Addition of interest income was incorrect; disclosed in ITR; dual taxation. - Penalty proceedings were wrongful; no deliberate concealment or misreporting. Revenue's Contentions: - Relied on the orders of the authorities below, seeking dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 142(2),Section 142(1),Section 133(6),Section 69A,Section 143(3),Section 144B,Section 115BBE,Section 270A,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW

Before: SHRI. SUDHANSHU SRIVASTAVA

This appeal has been preferred by the Assessee against the order dated 27.10.2025, passed by the National Faceless

Appeal Centre, Delhi (NFAC) for Assessment Year 2020-21. 2.0 The brief facts of the case are that the assessee was a farmer and 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 totaling to Rs.23,30,906/- in his Bank account maintained with Punjab national Bank. The case of the assessee was reopened under section 147 of the Income Tax Act, 1961 (hereinafter called 'the Act’) after issuing notice under section 148

of the Act. In response to notice under section 148 of the Act,

ITA No.942/LKW/2025 the assessee filed his return of income, declaring a total income of

The order continues below.

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