RAM BAHADUR YADAV,GORAKHPUR vs. INCOME TAX OFFICER, WARD-2(3), GORAKHPUR, GORAKHPUR

PDF · subscribers
ITA 12/VNS/2024Status: DisposedITAT Varanasi11 May 2026AY 2011-126 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the case to the Assessing Officer, granting the assessee one last opportunity to present his case and produce necessary evidence for the cash deposits. The assessee was cautioned to fully comply with the AO's directions.

What were the facts?

The assessee, engaged in brick manufacturing, made cash deposits of Rs. 19,99,900 in his bank account. The Assessing Officer treated these deposits as undisclosed business receipts and added them to the assessee's total income. The National Faceless Appeal Centre (NFAC) dismissed the assessee's appeal ex-parte.

What were the issues?

Whether the cash deposits were undisclosed business receipts and if the assessee was denied a reasonable opportunity of being heard by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 142(1),Section 147,Section 143(3),Section 144,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CIRCUIT BENCH (SMC

Before: SHRI. SUDHANSHU SRIVASTAVA

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.12/VNS/2024 Assessment Year: 2011-12 Ram Bahadur Yadav v. The Income Tax Officer Meerpur, Basahi Belghat Ward 2(3) Gorakhpur (U.P) Gorakhpur TAN/PAN:ACJPY6307M (Applicant) (Respondent) Applicant by: Shri Akash Agrawal, C.A. Respondent by: Smt. Amandeep Kaur, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 29.12.2023, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2011-12.

2.0 The brief facts of the case are that the assessee was engaged in the manufacturing of Bricks. The Income Tax Department was in possession of information that the assessee had made cash deposits aggregating to Rs.19,99,900/- in his Saving Bank Account, maintained with State Bank of India (SBI), Gorakhpur during the year under consideration. The Assessing Officer (AO) issued notice under section 142(1) of the Income Tax Act, 1961 (hereinafter called 'the Act’) dated 26.06.2018, requiring the assessee to furnish the copies of return of income, computation of income and Bank statements of all the Bank

ITA No.12/VNS/2024 Page 2 of 6

accounts for the year under consideration and to explain the source of Bank deposits of Rs.19,99,900/-. As per the AO, the assessee furnished the copy of return of income but did not mention the Bank account of SBI and that the claim of the assessee was that all the expenses were through profit and loss account furnished by the assessee along with the return of income. Not being satisfied, the AO treated the amount of cash deposits of Rs.19,99,900/- as the undisclosed business receipts of the assessee and added the same to the total income of the assessee. The AO completed the assessment under sections 147/143(3) read with section 144 of the Act, computing the income of the assessee as under:

Total income returned by the assessee : Rs.1,59,870.00

Addition on a/c undisclosed business receipt : Rs.19,99,900.00

Total income : Rs.21,59,770.00

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

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

ITA No.12/VNS/2024 Page 3 of 6

1.

That the Ld. CIT(A) has erred on law in confirming the assessment order passed by the Assessing Officer as the notice for initiation of assessment proceedings issued under section 148 was not served on the assessee on time thereby making the entire assessment proceedings invalid and bad in law as it is a condition precedent that the assessing officer shall serve a notice on the issue in case an assessment is to be framed u/s 148 of the Act. Thus, the entire proceedings deserves to be quashed. 2. That the Ld. Commissioner of Income Tax (Appeals) has erred on law by overlooking the error made by the Ld. Assessing Officer in passing the assessment order by not mentioning the specific section in which the addition of ₹19,99,900/- has been made and has grossly made the addition mentioning the same as extra profit earned which is against the principles of natural justice and the addition made herein shall be deleted. 3. That the Ld. Commissioner of Income Tax (Appeals) has erred in law and on facts by confirming the treatment of said cash deposit as undisclosed business receipt and extra profit earned without appreciating the fact that the assessee is in the business of Manufacturing of Bricks and in such line of business mostly transaction of sale are carried in cash which is ultimately deposited into the bank account and in the instant case as well the assessee has deposited the sales proceedings in his bank account which are well justified by the turnover and the compiled financials of the assessee substantiating the same. As such, the addition should be deleted.

ITA No.12/VNS/2024 Page 4 of 6

4.

That the Ld. CIT(A) has erred in law by confirming the addition made by the assessing officer without giving sufficient opportunity of being heard and as such the assessee shall be allowed a proper opportunity to furnish all relevant documents/information in line with the principles of natural justice. 5. That the appellant begs to amend, alter or raise any ground of appeal during the course of appellate proceedings. 3.0 During the course of hearing before me, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that both the authorities below have passed orders ex-parte qua the assessee, without affording reasonable opportunity of being heard to the assessee. The Ld. A.R. further submitted that the assessee was in the business of manufacturing of Bricks and in such line of business, mostly the transactions are in cash, which were ultimately deposited into the Bank account of the assessee and the same can be verified with the turnover of the assessee. The Ld. A.R. prayed that the matter may be restored to the file of the AO and if an opportunity is given, the assessee will produce all the relevant documents relating to cash deposits made by the assessee in his Bank account before the AO.

4.0 Per contra, the Ld. Sr. D.R. objected to the restoration of appeal to the file of the Assessing Officer as requested by the Ld. A.R. and submitted that the assessee was non-compliant before

ITA No.12/VNS/2024 Page 5 of 6

both the authorities below and, therefore, the appeal of the assessee may be dismissed.

5.0 I have heard both the parties and have also perused the material on record. Looking into the peculiar facts of this case and the prayer of the Ld. A.R., I am of the considered view that the assessee deserves one more opportunity to present his case and, therefore, I restore this file to the Office of the Assessing Officer with the direction to provide one last opportunity to the assessee to present his case and to produce all the necessary evidences in support of the cash deposits made by the assessee in his Bank account. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the 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 11/05/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:11/05/2026 JJ:

ITA No.12/VNS/2024 Page 6 of 6

More judgments on Section 142(1)

All 17,244 judgments and leading authorities on Section 142(1) →

Recent GST High Court judgments

Search GST case law →