REENA VERMA,GHAZIPUR vs. INCOME TAX OFFICER, WARD - 1(4), BHADOHI

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI BENCH, VARANSI BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.139/VNS/2024 A.Y. 2017-18 Reena Verma, vs The Income Tax Officer, W/o Vijay Shankar Verma, Ward-1(4), Bhadohi Mohalla-Khudaipura, Post- Markinganj, District-Ghazipur- 233001, Uttar Pradesh PAN: AHZPV6866F (Appellant) (Respondent) Assessee by: Sh. Subhash Chand, Advocate Revenue by: Shri. Sabayasachi Chakraborty, Sr. DR Date of hearing: 12.05.2026 Date of pronouncement: 29 .06.2026 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the orders of the ld. CIT(A), NFAC, passed under section 250 of the Income Tax Act on 20.07.2024, wherein the ld. CIT(A) has dismissed the appeals of the assessee, filed against the orders of the ld. Assessing Officer under section 144 of the Income Tax Act for the A.Y. 2017-18 on 2.12.2019. The grounds of appeal are as under:- “1. Because it is fully explained a. That the assessee has maintained the books of accounts regularly in due course of business which reveals the true aspect of business and all the purchases and sales are fully verifiable and due to severe illness/sickness of the Counsel, the books of accounts could not be produced before the Assessing Officer. b. That the assessee is a dealer of Patanjali products, who is manufacturer of grocery, medicine, household goods etc the sale proceeds have been deposited in the bank and utilised for payment to the seller of goods. 1

ITA No.139/VNS/2024 A.Y. 2017-18 Reena Verma The Ld. Assessing Officer as well as Ld. National Faceless Appeal Centre (NFAC) Delhi both have erred and acted illegally in not placing reliance on the same and have also erred and acted illegally in treating the total deposit in bank account out of other sources. 2. Because it is fully explained that there is no amount deposited in bank accounts which violates the provision of section 68, 69, 69A, 69B, 690, 69D, 70 & 71 and there is no occasion to apply the provision of section 115BBE of the Income Tax Act, 1961. The Ld. Assessing Officer has erred and acted illegally in applying the provision of section 115BBE of the Act and the Ld. National Faceless Appeal Centre (NFAC) Delhi has also erred and acted illegally in confirming the same. 3. Because it is fully explained that the amount of Rs. 18,63,122/- and Rs. 4,28,174/-deposited in Union Bank of India represents the receipts through RTGS and Cheques. The Ld. Assessing Officer has erred and acted illegally in applying the provision of section 69A of the Act and Ld. National Faceless Appeal Centre (NFAC) Delhi has also erred and acted illegally in confirming the same. 4. Because the Ld. Assessing Officer has erred and acted illegally in adding back Rs. 1,75,62,500/- as well as Rs. 22,91,296/- u/s 69A of the Act and erred and acted illegally in applying the provision of section 115BBE of the Act. The Ld. National Faceless Appeal Centre (NFAC) Delhi has also erred and acted illegally in confirming the same. 6. Because the assessment is bad both on facts and in law and not maintainable.”

ITA No.139/VNS/2024 A.Y. 2017-18 Reena Verma appeared before the Assessing Officer, they were asked to provide the details asked for vide a earlier notices and documentary evidences to explain the cash deposits and were told to make the compliances by 5.11.2029, but since there was no compliance made on that date, the AO went ahead and issued a notice under section 133(6) to the Union Bank of India, Ghazipur. From the same, he ascertained that the total cash deposited during the F.Y. 2016-17 was Rs. 1,75,62,500/- and because no explanation had been offered by the assessee, he made an addition of Rs. 1,75,62,500/- in the hands of the assessee under section 69A of the Income Tax Act. He also noticed that in addition to the above cash which the assessee had received in her bank accounts, she had also received credits of Rs. 22,91,296/- by way of instruments. Since the assessee had not furnished any response regarding the source thereof, he made an addition of Rs. 22,91,296/- under section 68 on account of such deposits. 3. Aggrieved by the said assessment order, the assessee went in appeal before the ld. CIT(A). However, the ld. CIT(A) records the fact that he issued three notices to the assessee but recorded that the assessee had not complied with any of the notices served upon her from time to time. He therefore, decided to dispose of the appeal on the basis of the materials available on record. With regard to the cash deposit of Rs. 1,75,62,500/- during F.Y. 2016-17, he noted that the assessee had not furnished any explanation in this regard and not even filed an ITR. In the circumstances, he confirmed the addition made by the Assessing Officer under section 69A. Similarly, with regard to the cheque/RTGS deposits amounting to Rs. 22,91,296/-, the ld. CIT(A) confirmed the addition in the absence of any submissions or evidence from the assessee to explain the same.

ITA No.139/VNS/2024 A.Y. 2017-18 Reena Verma 4. The assessee is aggrieved at this decision of the ld. CIT(A). Sh. Subhash Chand, Advocate (hereinafter referred to as the ld. AR) appearing on behalf of the assessee submitted that the non-compliance on the part of the assessee was not of her choosing but because her advocate at the time Sh. Chandrika Prasad, had been diagnosed with cancer and as a result of his illness, he could not make compliances to any of the notices issued by the Assessing Officer. The ld. AR submitted that all the medical certificates of Sh. Chandrika Prasad and also a certificate from Sh. Chandrika Prasad had been submitted before the ld. CIT(A) in which the said advocate had pointed out that he was suffering from cancer, which had resulted in the loss of his voice and required him to go to Mumbai for treatment. As a result of this, he was not able to handle the case of Smt. Reena Verma properly and he owned up responsibility for the same. The ld. AR submitted that this petition had been moved before the ld. CIT(A) requesting him to admit additional evidences under Rule 46A but the ld. CIT(A) had not acted upon this petition, nor had he rejected it. In the circumstances, when the assessee was prevented by sufficient cause from producing the necessary evidences before the AO, the request for consideration of these additional evidences should not have been ignored. It was, therefore, submitted that in view of the circumstances, the matter deserve to be looked afresh so that injustice was not done to the assessee. 5. On the other hand, Sh. Sabayasachi Chakroborty, ld. Sr. DR (hereinafter referred to as the ld. DR) appearing on behalf of the assessee submitted that the assessee was a non-filer and non-responsive to the various notices issued to her. She had also not pursued her appeal effectively. In the circumstance, it could only be presumed that she had no explanation for the deposits in the bank account and therefore, prayed that the additions made by the lower authority may be confirmed. 4

ITA No.139/VNS/2024 A.Y. 2017-18 Reena Verma 6. We have duly considered the facts and circumstances of the case. We note that the erstwhile counsel for the assessee has himself filed a petition in which he has submitted that he was unable to represent the case of the assessee properly because he was a cancer patient and had had to rush to Mumbai for his treatment. In the circumstances, in our opinion, it constitutes a reasonable ground to accept additional evidences under Rule 46A that might help to explain the deposits made in the bank account in both cash and through other instruments. As these evidences have not been considered by the ld. AO or the ld. CIT(A), in the interest of justice, we deem it appropriate to restore the matter back to the file of the Assessing Officer so that the assessee may produce these evidences before the Assessing Officer and the Assessing Officer, upon consideration of the same, may pass a fresh order in accordance with law. As the matter stands restored to the file of the ld. Assessing Officer, the appeal of the assessee is held to be allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 29 .06.2026.

Sd/- Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29/06/2026 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR, ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S. 5