VIBHA PANDEY,GONDA vs. INCOME TAX OFFICER, GONDA

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.527/LKW/2025 Assessment Year: 2017-18 Vibha Pandey v. The Income Tax Officer Type III/6 Block 2 Gonda - New Housing Colony Gonda (U.P) TAN/PAN:BSKPP0714R (Applicant) (Respondent) Applicant by: None Respondent by: Shri R.R.N. Shukla, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 31.10.2023, 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 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.18,45,100/- in her Bank accounts and account with the Post Office during the demonetization period, i.e. from 09.11.2016 to 31.12.2016. The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to file the return of income for the year under consideration and also to explain the nature and source of cash deposits made in her Bank accounts and account

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with the Post Office. However, neither the assessee filed her return of income for the year under consideration nor furnished any reply to the notices issued by the AO. The AO, thereafter, called for information regarding the assessee’s cash deposits from the Post Master, Department of Posts, B.R.D. Medical College, State Bank of India, Basharatpur, Gorakhpur and Branch Manager, Bank of India, Gorakhpur, who duly confirmed the cash deposits made by the assessee as per details given below:

Sl. Bank/Department Account No. Amount of Name cash deposit No (Rs.) 1 State Bank of India 35416219159 5,49,000.00 2 Bank of India 691010110001730 2,48,000.00 3 Post Office 3421552431 10,48,100.00 Total 18,45,100.00

2.1 Thereafter, the AO issued a show cause notice dated 23.09.2019 giving the assessee final opportunity to present her case whereby the AO proposed to pass best judgment assessment under section 144 of the Income Tax Act, 1961 (hereinafter called 'the Act’) on the basis of material/evidence collected during the course of assessment proceedings and the material available on record. In compliance to this show cause notice, the assessee filed her reply stating therein that during the relevant financial

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year, the source of her income was the rent received from house, plying of Bolero Jeep and the receipts also comprised of cash received from her spouse and father-in-law and that the entire cash deposit made during the demonetization period was her own money. The AO observed that the assessee had failed to produce any documentary evidence in support of her claim and had also failed to prove the nature and source of cash deposited in the aforesaid accounts and, therefore, he treated the cash deposits made by the assessee totaling to Rs.18,45,100/- as unexplained income of the assessee and added the same to the total income of the assessee under section 69A of the Act. The AO completed the assessment under section 144 of the Act, computing the income of the assessee as under:

Returned income Nil Total income as per computation Rs.2,92,682.00 Addition u/s 69A of the Act Rs.18,45,100.00 Total income (rounded off) Rs.21,37,780.00

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

2.3 Aggrieved, the Assessee preferred an appeal before the NFAC. The submission of the assessee before the NFAC was the

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same as made before the AO that the source of income was from rent, plying of Bolero Jeep and the cash received from her spouse and father-in-law. Although the assessee did not produce any documentary evidence supporting the ownership of property/vehicle, the NFAC treated Rs.4,00,000/- as the savings of the assessee available for deposit during the demonetization period and restricted the addition to Rs.14,45,100/- as against the addition of Rs.18,45,100/- made by the AO.

2.4 Now the assessee has approached this Tribunal challenging the order of the NFAC confirming the addition of Rs.14,45,100/-, by raising the following grounds of appeal:

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justice and rendering the assessment order legally unsustainable. 3. Because the Learned CIT(A) failed to appreciate that the Appellant, being a homemaker, legitimately had accumulated household savings over several years, which is a common and acceptable practice in Indian society, and therefore the cash deposits could not be treated as unexplained under Section 69A. 4. Because the Learned CIT(A) has arbitrarily restricted the relief to only Rs.4,00,000/- as explained savings without assigning any cogent reasoning, despite the Appellant having submitted detailed year-wise income particulars and corroborative material explaining the availability of the entire cash deposit of Rs.18,45,100/-. 5. Because the Learned CIT(A) failed to appreciate the year-wise details of household income, rental receipts, and vehicle-related income which clearly established the sufficiency of funds to make the cash deposits during the demonetization period, and thus the confirmation of the addition is unsustainable. 6. Because the Learned CIT(A) erred in law and on facts by confirming the addition merely on the ground that formal ownership documents of property/vehicle were not furnished, without considering the overall facts, social background, nature of income, and plausible explanation of the Appellant supported by available evidences. 7. Because the impugned order of the Learned CIT(A) is otherwise contrary to facts, law, and binding judicial precedents, and therefore deserves to be set aside.

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4.0 The Ld. Sr. D.R. submitted that the NFAC has already granted relief to the assessee and restricted the addition to Rs.14,45,100/- as against the addition of Rs.18,45,100/- made by the AO and, therefore, no interference is called for in the order of the NFAC. The ld. D.R. further submitted that the appeal of the assessee may be dismissed.

5.0 I have heard the ld. Senior Departmental Representative and have also perused the material on record. It is evident that the order passed by the AO was ex-parte qua the assessee and the NFAC partly allowed the appeal of the assessee by treating Rs.4,00,000/- as the savings of the assessee available for deposit during the demonetization period, although the assessee had not produced any documentary evidence supporting the ownership of property/vehicle before the NFAC. The NFAC accordingly restricted the addition to Rs.14,45,100/- as against the addition

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of Rs.18,45,100/- made by the AO. Accordingly, looking into the facts of this case, I am of the considered view that in the interest of substantial justice, the assessee deserves one last opportunity to present her case and, therefore, I set aside the order of the NFAC and restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the assessee to present her case. 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 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 06/05/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:06/05/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR

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By order

Assistant Registrar/DDO