SOLAIMAN BHUYAN,BARPETA vs. ITO- WARD BARPETA, BARPETA

Brief facts of the case are that the assessee is an individual. For the A.Y. 2017-18, the Ld. AO identified bank deposits totalling Solaiman Bhuyan ₹22,10,796/-, noting specifically that ₹13,18,500/- was deposited in cash during the demonetization period. The assessee failed to respond to the statutory notices nor furnished an explanation for the deposits. Consequently, an ex parte assessment was completed u/s 144 of the Act and a sum of ₹13,18,500/- being cash deposit was treated as unexplained money u/s 69A and taxed under section 115BBE and the remaining amount of ₹8,92,296/- was treated as business receipts, and the income was estimated @ 8% at ₹71,384/-. The total income was thus determined at ₹ 13,89,880/-. Penalty proceeding was also initiated. During the penalty proceeding, the Ld. AO issued show cause notices from time to time requiring the appellant to explain why penalty u/s 271AAC(1) should not be levied. However, the appellant failed to furnish any reply, explanation or supporting documentary evidence. In absence of any satisfactory explanation regarding the unexplained income determined u/s 69A, the Ld. AO levied penalty of Rs. 79,110/- being 10% of tax payable u/s 115BBE. Aggrieved with the penalty order, the assessee filed an appeal before the Ld. CIT(A), who noted that the assessee was not keen on pursuing the appeal as the notices remained uncomplied and confirmed the penalty imposed by the Ld. AO as per his findings as under: “The appellant is an individual. For the assessment year under consideration i.e. A.Y. 2017-18, information available with the department indicated cash deposits in the bank accounts of the appellant, particularly during the demonetization period. During assessment proceedings, statutory notices u/s 142(1) were issued calling for filing of return of income and explanation regarding the nature and source of deposits; however, the appellant failed to comply. On verification of bank statements, total deposits aggregating to Rs. 22,10,796/- were observed during the relevant financial year, out of which cash deposits amounting to Rs. 13,18,500/- were made during the demonetization period. In absence of explanation, the cash deposits during demonetization were treated as unexplained money u/s 69A and taxed under section 115BBE. The remaining deposits of Rs.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined.

The Ld. AR submitted and as is also mentioned in the statement of facts and the grounds of appeal filed that that the Ld. CIT(A) failed to properly appreciate the facts that the original assessment itself was completed ex parte under section 144 of the Act without detailed examination of facts. The Ld. AR further submitted that in the quantum proceedings for the same Assessment Year, in ITA No. 49/GTY/2025, the coordinate Bench of the Tribunal had already set aside the order of the Ld. CIT(A) dated 26.12.2024 and had restored the matter to the file of the Ld. AO for fresh adjudication and penalty is not automatic. It was submitted that since the quantum addition itself has not attained finality and is presently pending adjudication before the Ld. AO, the penalty proceedings which are consequential in nature cannot survive independently as it is a settled principle of law that when the quantum matter is restored for fresh examination, the related penalty proceedings also require reconsideration; therefore, the penalty confirmed by the Ld. CIT(A) is premature, unsustainable in law and liable to be deleted. The assessee has further submitted that due to lack of proper professional guidance and technical understanding of the response mechanism on the portal, detailed submissions could not be filed in the appropriate response tab. The non-submission was neither intentional nor deliberate but occurred due to bona fide reasons. It is stated that it is a settled position of law that matters should be decided on merits rather than on technical defaults. The Ld. CIT(A) ought to have provided one more opportunity in the interest of natural justice instead of confirming the penalty ex parte. The assessee has prayed that the matter may be restored for fresh adjudication after providing adequate opportunity of being heard. The Ld. DR relied upon the order of the Ld. CIT(A) but did Solaiman Bhuyan not oppose the request of the assessee to remand the penalty before the Ld. AO.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). Since the assessment proceeding had been remanded to the Ld. AO, the very basis for imposition of penalty does not survive. Hence, the Bench was of the view that the order of the Ld. CIT(A) may be set aside and the penalty proceeding may also be remanded before the Ld. AO to be decided afresh after considering the outcome of the assessment proceeding. Hence, the grounds of appeal are partly allowed for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on 1st June, 2026. [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 01.06.2026 Solaiman Bhuyan Copy of the order forwarded to:

CIT-

CIT(DR), Guwahati Benches, Guwahati.

Guard File. //// By order