NIRMAL SINGH,KASHIPUR vs. DC/ACIT-3, AZAMGARH

PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the Assessee against the order dated 13.09.2021, 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 filed his return of income for the year under consideration on 05.03.2018, declaring a total income of Rs.55,12,260/-. The case of the assessee was selected for scrutiny under CASS. The Assessing Officer (AO) issued statutory notices to the assessee. However, there was no compliance from the side of the assessee. As per Taxpayer Information Summary (ITS) downloaded from the system, it was noticed by the Department that the assessee had

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made cash deposits of Rs.18,60,000/- in his Bank Account No.08081780000017 maintained with HDFC Bank during the demonetization period. The AO issued notice under section 142(1) of the Income Tax Act, 1961 (hereinafter called “the Act’), requiring the assessee to furnish the details of source of cash deposits made by him with supporting evidence. However, there was still no compliance from the side of the assessee. The AO, therefore, proceeded to complete the assessment on the basis of Best Judgment Assessment. Since the assessee could not offer any satisfactory explanation about the nature and source of the cash deposits made by him in his Bank Account, the AO treated the same as unexplained money and added Rs.18,60,000/- to the income of the assessee under section 69A of the Act. The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.73,72,260/-.

2.1 The AO also initiated penalty proceedings under section 271AAC of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee and confirmed the order of the AO.

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

“That the assessee and his representative are filing appeal to the Tribunal against the order of the Assessing Officer who has passed assessment order for our case. Assessee vide their submissions requested for transfer of their case to Kashipur, Uttarakhand for easy follow up by the assessee; as he is/was not in this capacity to travel to Azamgarh. However the assessing officer has without considering the above facts passed the assessment order which is arbitrary in nature. That the assessee and his representative thereafter filed an appeal to the CIT (Appeals) stating complete details about computation of our income and sources of cash deposit made during the relevant year. However the CIT (Appeals) dismissed our appeal. That we would like to highlight that the computation sheet provided by the department dated 07.12.2019 is wrongly computed as there has been taken thrice the effect of addition of Rs.1860000/- made by the assessing officer and hence additional tax computed is also wrong in this respect.”

3.0 None was present on behalf of the assessee when the appeal was called out for hearing nor was any adjournment application moved in this regard. However, looking into the facts of the case, we proceed to adjudicate the appeal the appeal based on record before us.

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3.1 During the course of hearing, it was brought to our notice that there was a delay of 634 days in filing the appeal. and no application for condonation of delay has been filed by the assessee.

3.2 On a query from the Bench, the Ld. Sr. D.R. opposed the condonation of delay.

3.3 However, in view of the provisions of section 253(5) of the Act, we condone the delay and admit the appeal for hearing.

4.0 The Ld. Sr. D.R. submitted that the assessee is a habitual non-compliant before the lower authorities and, therefore, the appeal of the assessee should be dismissed and no further opportunity should be given to the assessee.

5.0 We have heard the Ld. Sr. D.R. and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, we set aside the order of the NFAC and restore this file to AO with the direction to provide one more opportunity to the assessee to substantiate the source of cash deposits, failing which the AO may proceed as per law. We also caution the assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty

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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 16/04/2026.

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED:16/04/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order

Assistant Registrar/DDO