SIRAJ AHMED,GHAZIPUR vs. INCOME TAX OFFICER - 3(5), GHAZIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.41/VNS/2025 Assessment Year: 2017-18 Siraj Ahmed v. ITO-3(5) Ysufpur Ghazipur Mohammadabad Ghazipur (U.P) TAN/PAN:ARYPA9999B (Applicant) (Respondent) Applicant by: None Respondent by: Shri Sudipta Paul, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 23.02.2024, passed by the Addl/JCIT(A)-1, Gurugram for Assessment Year 2017-18.

2.0 The brief facts of the case are that the assessee was carrying on the business of trading of Maida, Suji and Atta on retail basis since last eighteen years. 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, during the demonetizaton period, had made cash deposits totaling to Rs.13,00,500/- in his Bank Account No.304602010897151 maintained with the Union Bank of India, Mohammadabad. The Assessing Officer (AO) issued statutory notices, requiring the assessee to file the true and correct return

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of income for the year under consideration and also furnish the details of source of cash deposits. In response, the assessee vide letter dated 26.08.2019 furnished the details sought for by the AO and submitted that the cash deposits of Rs.13.00 lakhs in old currency notes was out of previous savings of business. The assessee had also furnished before the AO a chart demonstrating the cash sales made by the assessee during the year under consideration and also during the preceding year. The total cash sales made in the year under consideration was recorded as Rs.22,46,600/-. After considering the reply furnished by the assessee and the materials on record, the AO accepted 40% of the total cash deposits as being from sales made by the assessee in cash (which came to Rs.8,98,640/-). The remaining amount of Rs.4,69,160/- (Rs.13,67,800 – Rs.8,98,640) was treated as unexplained cash deposits made by the assessee and was added to the total income of the assessee.

2.1 The AO also estimated the turnover of the assessee for the year under consideration at Rs.17,77,440/- (Rs.22,46,600 – 4,69,160) and estimated the profit rate @ 8% by applying the provisions of section 44AD of the Act, which came to Rs.1,42,195/-. This amount was also added to the total income of the assessee.

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2.2 The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.6,11,355/-.

2.3 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271F, 271AAC and 270A of the Act, separately.

2.4 Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority. Subsequently, the appeal was migrated to NFAC, which dismissed the appeal of the assessee for the reason of non-compliance by the Assessee.

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

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4.0 The Ld. Sr. D.R. submitted that due to non-compliant attitude of the assessee, the appeal of the assessee may be dismissed.

5.0 I have heard the Ld. Sr. D.R. and have also perused the material on record. It is evident that there was complete non- compliance on the part of the assessee during the course of first appellate proceedings. However, looking into the facts of this case, I am of the considered view that the assessee deserves one final opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the Addl/JCIT(A)-1, Gurugram with the direction to provide one more opportunity to the assessee to present his case. I also caution the assessee to fully comply with the directions of the

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Addl/JCIT(A)-1, Gurugram in the set-aside proceedings when called upon to do so, failing which, the Addl/JCIT(A)-1, Gurugram 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.

6.0 In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 27/08/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:27/08/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order Assistant Registrar/DDO