SHIV SHANKAR PRASAD,AZAMGARH vs. ITO WARD 3(1), AZAMGARH

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.36/VNS/2025 Assessment Year: 2017-18 Shiv Shankar Prasad v. ITO 115, Sadwarti Sadar Ward 3(1) Azamgarh (U.P) Azamgarh TAN/PAN:BSSPP4207P (Applicant) (Respondent) Applicant by: Shri Aditya Runghta, C.A. Respondent by: Shri Sudipta Paul, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 06.01.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.

2.0 The brief facts of the case are that the assessee was carrying on the business of wholesale trade in Pharmaceuticals at Azamgarh, Uttar Pradesh through his proprietary concern, M/s Mahesh Ram Bhairo Prasad. The assessee filed his return of income for the year under consideration on 29.10.2017 declaring a total income of Rs.4,99,840/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter called 'the Act’). Subsequently, the case of the assessee was reopened under section 147 of the Act on the basis of information that, during the demonetization period, the assessee had made cash deposits totaling to Rs.34,63,600/- in his two saving bank

ITA No.36/VNS/2025 Page 2 of 6 accounts No.7821131002076 and 7825010000030 maintained with Oriental Bank of Commerce. In response to notice under section 148 of the Act, no return was filed by the assessee. Thereafter, the Assessing Officer (AO) issued notices under section 142(1) of the Act, requiring the assessee to furnish the information regarding the nature and source of cash deposits in his saving bank account, but the assessee had not filed any response. The AO, therefore, proceeded to complete the assessment ex-parte under section 144 of the Act after issuing show cause notice to the assessee. As per the AO, the analysis of bank account of the assessee revealed, that the assessee was regularly depositing cash in his account upto the month of October, 2016 and the average cash deposits per month was worked out to Rs.10,32,642/-. It was further noticed that the total cash deposits during the month of December, 2016 was Rs.16,00,950/-. Out of the cash deposits of Rs.16,00,950/- made by the assessee in December, 2016, cash deposit of Rs.10,32,642/- (being average monthly cash deposit from 01.04.2016 to 31.10.2016) was held to be out of business receipts of the assessee and the balance cash deposit of Rs.5,68,308/- was treated as unexplained cash credit and added to the total income of the assessee under section 68 of the Act. The AO completed the assessment under section 147 read with

ITA No.36/VNS/2025 Page 3 of 6 section 144 of the Act, assessing the total income of the assessee at Rs.10,68,148/-.

2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 274 read with sections 271AAC(1) and 272A(1)(d) of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee and confirmed the order of the AO by passing an order ex-parte qua the assessee.

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

ITA No.36/VNS/2025 Page 4 of 6 considering the facts of the case that the same is part of the sale proceeds, accounted for in regular books of accounts. As such, the entire addition is based on mere surmises and conjectures and nee ds to be deleted. 3.0 The Ld. Authorized Representative for the assessee (Ld. A.R.) inviting my attention to the Chronology Chart under the head ‘Schedule 1’ placed on record, submitted that no notice was served on the assessee from the Office of either the AO or the Ld. First Appellate Authority. It was further submitted that the AO had passed an ex-parte order under section 147 read with sections 144/144B of the Act by making an addition of Rs.5,68,308/- under section 68 of the Act on assumptions and presumptions without bringing on record any material in support of the addition made by the AO. The Ld. A.R. further submitted that the Ld. First Appellate Authority too had passed an order ex- parte qua the assessee. It was submitted that during course of appellate proceedings, the assessee was under treatment for serious illness and was on bed rest on the advice of the Doctor and, therefore, the assessee could not represent his case before the lower authorities. The Ld. A.R. furnished before me the additional evidences in the form of Medical Prescriptions dated 01.11.2024 and 01.12.2024 and Medical Certificate dated 15.01.2025 issued by Dr. Rajnath, Senior Consultant, Mandaleeya Zila Chikitsalaya, Azamgarh. He prayed that the

ITA No.36/VNS/2025 Page 5 of 6 aforesaid additional evidences are crucial for deciding the case of the assessee, therefore, the same may please be admitted under Rule 29 of the I.T.A.T. Rules.

4.0 The Ld. Sr. D.R. objected to the admission of the additional evidences.

5.0 Having gone through the additional evidences filed before me, I am of the view that these evidences go to the very root of the matter and explain the reason for non-compliance. Accordingly, I admit the same.

6.0 The Ld. A.R. further prayed that in the interest of natural justice, the matter may be restored back the file of the AO, where all the requisite evidences shall be produced to prove the transactions entered into by the Assessee during the year under consideration.

7.0 The Ld. Senior D.R. objected to the restoration of appeal to the AO and submitted that the appeal of the assessee may be dismissed, as the assessee was uncooperative before the authorities below.

8.0 I have heard the both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the Assessee deserves one more opportunity to present his case and, therefore, in the interest of

ITA No.36/VNS/2025 Page 6 of 6 substantial justice, I restore this file to the Office of the AO with the direction to provide one more opportunity to the Assessee to present her case. The Assessee shall produce the relevant evidences before the AO during the course of set aside proceedings. I 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 material available on record even if it is ex-parte qua the Assessee.

9.0 In the result, the appeal of the Assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 25/08/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:25/08/2026 JJ: