NISAR KHAN,BANGALORE vs. DCIT, CENTRAL CIRCLE-1(4), BENGALURU

ITA 2986/BANG/2025Status: DisposedITAT Bangalore29 September 2026AY 2020-215 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal considered the rival submissions. Cash of ₹12 lakh was found at the assessee's residence during the search. The assessee had provided inconsistent explanations for its source. Before the Tribunal, the assessee produced invoices for the sale of gold and photographs of his wife engaged in tailoring work. The lower authorities had made the addition due to the lack of substantiation. Since jewellery-sale invoices were now produced, the Tribunal directed the assessee to submit them to the Assessing Officer. The Assessing Officer was instructed to verify the bills, examine the issuing parties, and investigate how cash of that magnitude was paid. After this inquiry, the Assessing Officer is to decide the addition in accordance with the law. The grounds concerning the validity of assessment proceedings and approval under section 153D were not pressed and were dismissed. Therefore, ground number 5, relating to the addition of cash, was restored to the Assessing Officer for fresh consideration. The appeal was partly allowed for statistical purposes.

What were the facts?

The assessee, Nisar Khan, filed an appeal against the order of the Principal Commissioner of Income Tax (Appeals)-11, Bangalore, for Assessment Year 2020-21. The appeal challenged the assessment order dated September 25, 2021, passed under section 143(3) read with section 153D of the Income-tax Act, 1961. During a search under section 132 on April 11, 2019, cash of ₹12,58,510 was found at the assessee's residence. The assessee initially provided varying explanations for the source of this cash, including savings from family earnings, sale of jewellery, and money belonging to relatives. The Assessing Officer made an addition of ₹12 lakh, citing inconsistent explanations and lack of supporting documents. The CIT(A) upheld this addition, finding the explanations unsubstantiated and the cash holding unjustified.

What were the issues?

1. Whether the assessment order dated 25.09.2021, passed under section 153A on the basis of a common satisfaction note dated 30.06.2021, was contrary to the law declared by the Hon’ble Jurisdictional High Court in Mr. Sunil Kumar Sharma v. Deputy Commissioner of Income Tax and void ab initio. 2. Whether the learned Commissioner of Income Tax (Appeals) erred in summarily rejecting the Appellant’s submissions without giving a further reasonable opportunity to furnish any additional details or documents required. 3. Whether the learned Commissioner of Income Tax (Appeals) erred in mechanically upholding the order of the learned Assessing Officer without properly considering the facts and the Appellant’s submissions dated 18.09.2021 and 24.11.2025. 4. Whether the cash found at the Appellant’s residence represented the bona fide savings of the Appellant’s family members from their earnings and receipts, including gifts and the sale of family assets, and that the impugned addition was therefore unjustified. Assessee's contentions: The assessment order was unjust and unsustainable. The assessment order under section 153A was void ab initio as it was based on a common satisfaction note, contrary to the jurisdictional High Court's ruling. The CIT(A) erred in rejecting submissions without a further opportunity and mechanically upholding the AO's order. The cash represented bona fide family savings from earnings, gifts, and sale of assets. Revenue's contentions: The assessee's explanations were unsupported by evidence, and he repeatedly changed his account of the source of the cash. The orders of the lower authorities disclosed no infirmity.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 153A,Section 153D,Section 131,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

1.

The Assessee filed this appeal against the order dated 26 November 2025 passed by the Principal Commissioner of Income Tax (Appeals)-11, Bangalore (the learned CIT(A)) for Assessment Year 2020-21. By that order, the learned CIT(A) dismissed the Assessee’s appeal against the assessment order dated

ITA 2986/BANG/2025 NISAR KHAN

25 September 20

The order continues below.

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