SATISH CHANDRA,MEERUT vs. ITO, WARD 1(5) MEERUT AT BARAUT, MEERUT AT BARAUT

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER And SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Assessment Year: 2017-18 Satish Chandra Vs ITO 174, Baghpat Pilana, Ward – 1(5), Meerut – 250 615 Meerut at Baraut Uttar Pradesh (APPELLANT) (RESPONDENT) PAN No. BRNPS 4460 H Assessee by Shri Dinesh Yadav, Adv. and Shri Shrey Jain, Adv. Revenue by Shri Ravi Kant Choudhary, Sr. DR Date of Hearing 19.05.2026 Date of Pronouncement 04.06.2026

ORDER PER NAVEEN CHANDRA [ACCOUNTANT MEMBER]: The above captioned four appeals are preferred by the assessee against the order dated 09.01.2026, passed by Learned Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as ‘ld. CIT(A)/NFAC], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, ‘the Act’] against the assessment order dated 13.12.2019 passed u/s 144 of the Act by the ITO, Ward-54(4), Delhi (ITA No.1231/Del/2026), penalty order dated 15.03.2022 passed u/s 270A of the Act by the NFAC, Delhi (ITA No.1232/Del/2026), order

ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Satish Chandra vs. ITO [2017-18] dated 25.11.2021 passed u/s 272A(1)(d) of the Act by the NFAC, Delhi (ITA No.1233/Del/2026) and penalty order dated 02.03.2022 passed u/s 271AAC(1) of the Act by the NFAC, Delhi (ITA No.1234/Del/2026) for A.Y. 2017.18. 2. Since the above captioned appeals were heard together and the facts in issues are identical, all the four appeals are being disposed of by this common order for the sake of convenience and brevity. 3. Brief facts of the case are that the return of income for the A.Y. 2017-18 was filed by the assessee electronically on 15.07.2017 declaring total income of Rs. 3,04,250/-. It was electronically processed under section 143(1) of the Act at returned income and the case was selected for Scrutiny through CASS on account of Abnormal increase in cash deposits during demonetization period as compared to pre-demonetization period. 4. In absence of any responses to the notices the learned AO passed the assessment order u/s 144 of the Act, on the basis of material available on record and on the basis of reply filed by the assessee during the course of assessment proceedings. In view of the same, the amount of cash deposited in various bank accounts during demonetization period and other cash and credit entries during F.Y. 2016-17 collectively to tune of Rs. 80,92,108/- was considered to be

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ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Satish Chandra vs. ITO [2017-18] unexplained money from undisclosed sources and accordingly added to his income u/s 69A of the Act, 1961 for the year under consideration. The learned AO in his assessment order assessed an income of Rs. 83,96,360/- and charge interest as per provisions of the Act. Penalty proceedings u/s 271AAC of the I.T. Act and penalty proceedings u/s 270A(2) of the I.T. Act are separately initiated.

“1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order without assuming jurisdiction as per law and without complying with the requisite procedure in accordance with law. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not condoning the delay in filing of first appeal and that too without providing any reasonable opportunity of being herd to the assessee and in gross violations of principles of natural justice. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs.80,92,108/- (Rs. 49,67,500/- on account of cash deposits in bank account and Rs.31,24,608/- on account of other credits in the bank account) by treating it as income of assessee u/s 69A and charging the same to tax u/s 115BBE and that too by recording incorrect facts and findings and without considering the submissions of the assessee and without observing the principles of natural justice. Page 3 of 8

ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Satish Chandra vs. ITO [2017-18] 4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in passing the impugned assessment order dated 13-12-2019 is illegal, bad in law, void ab-initio and against the facts and circumstances of the case and without following the principles laid down u/s 144 of the Act and in gross violation of principles of natural justice and barred by limitation also and with providing adequate opportunity of being heard. 5. That having regard to facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in taxing the addition of Rs. 80,92,108/- made u/s 69A as per the amended provisions of section 115BBE i.e., at the high rate of tax of 60% which is bad-in-law in view of the decision of Hon'ble Madras High Court in the case of S.M.I.L.E MicroFinance Ltd. vs. ACIT, WP(MD) 2078 of 2020 dated 19.11.2024. 6. That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in charging interest u/s 234B of the Income Tax Act, 1961. 7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Satish Chandra vs. ITO [2017-18] discharged its onus of explaining the cash deposits, it’s contentions to prove the cash deposits during the demonetization period, hardly deserves to be accepted in entirety especially when the assessee could not give satisfactory explanation for the disproportionate increase in cash sales just before demonetization period. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposits are supported by stock register, purchase records, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash sales, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition of Rs. 10 lakhs only would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The assessee’s ground on this count is partly allowed.

ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Satish Chandra vs. ITO [2017-18] 10. In the result, appeal of the assessee in ITA No. 1231/DEL/2026 is partly allowed.

ITA No.1232/Del/2026 ; ITA 1233/Del/2026 and 1234/Del/2026:

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ITA Nos.1231, 1232, 1233 & 1234/Del/2026 Satish Chandra vs. ITO [2017-18] 14. The penalty levied u/s 272A(1)(d) for non-compliance of notices. We find that the CIT(A) has dismissed the appeal on account of delay in filing of appeal before him. We are of the considered view that the dismissal of appeal on account of delay appears to be unwarranted on account of the fact that the CIT(A) did not adhere to the principal pf natural justice, of providing adequate opportunities to explain the delay in filing appeal. Taking into consideration the entire facts of the case, we are of considered view that penalty levied u/s. 272A(1)(d) of the Act is liable to be deleted. Ground is allowed.

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 04.06.2026 Priti Yadav, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi

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