ALI AKBER HUSAIN, DURG,DURG vs. INCOME TAX OFFICER-1(1), BHILAI, DURG

ITA 655/RPR/2026Status: DisposedITAT Raipur06 October 2026AY 2017-1810 pages
AI SummaryRemanded

What were the facts?

The assessee, Ali Akber Husain, is challenging an order dated 26.06.2026 passed by the CIT(Appeals)/NFAC for Assessment Year 2017-18. The original assessment was completed under section 147 read with section 144 and 144B of the Income-tax Act, 1961, by the National Faceless Assessment Centre, Delhi, on 20.09.2021. Reassessment proceedings were initiated based on information suggesting escapement of income, specifically regarding cash deposits of Rs. 14,52,500/- during the demonetization period. The assessee had initially filed a return declaring Rs. 3,07,770/-. Despite notices under section 148 and 142(1), the assessee failed to provide satisfactory explanations or supporting documents. The Assessing Officer treated the cash deposits as unexplained income under section 69A and added it to the returned income, resulting in an assessed income of Rs. 17,60,270/-. The CIT(Appeals)/NFAC upheld the reassessment proceedings and the addition.

What did the Tribunal hold?

The Tribunal noted that the CIT(Appeals)/NFAC had upheld the reassessment proceedings, finding that the SFT data provided sufficient tangible material to form a prima facie belief of escaped income. The CIT(Appeals)/NFAC rejected the assessee's arguments regarding mechanical reliance on SFT data, prior knowledge from the case of Late Maimuna Begum, and violation of natural justice. The appellate authority also found that the assessee failed to discharge the burden of proving the source of cash deposits, even with the submission of audit reports, VAT returns, and reconstructed summaries, as these were additional evidences not filed before the Assessing Officer. The Tribunal, however, observed that the CIT(Appeals)/NFAC, while admitting additional evidence, failed to comply with Rule 46A(3) of the IT Rules, 1962, by not providing these to the AO for comment and verification. Therefore, the Tribunal set aside the order of the CIT(Appeals)/NFAC and remanded the matter back to its file to comply with Rule 46A(3), obtain a remand report from the AO, and then pass a fresh order in accordance with Section 250(4) & (6) of the Act, while adhering to principles of natural justice. The assessee was also directed to comply with hearing notices.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961, based on Statement of Financial Transactions (SFT) data, were valid and not arbitrary or without jurisdiction? 2. Whether the cash deposits of Rs. 14,52,500/- made during the demonetization period could be treated as unexplained income under section 69A of the Income-tax Act, 1961, in the absence of a satisfactory explanation from the assessee? Assessee's Contentions: The assessee contended that the reopening was based on mechanical reliance on SFT data and that the department was already aware of relevant facts from earlier proceedings concerning Late Maimuna Begum. The assessee also argued that proceedings stood concluded and that physical notice dated 18.09.2021 violated natural justice. Furthermore, the assessee claimed section 69A was inapplicable as cash was recorded in books and that VAT turnover and business bank accounts substantiated the deposits. Revenue's Contentions: The revenue argued that SFT information is statutorily recognized and can form the basis for reopening. They contended that the assessee failed to respond to statutory notices and provide satisfactory explanations, thus discharging the burden of proof. The revenue maintained that proceedings in the case of Late Maimuna Begum were dropped due to her demise and not on merits, and that each assessment proceeding is distinct. They also asserted that negligence or inattention by the assessee cannot invalidate lawful proceedings.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 139,Section 148,Section 142(1),Section 69A,Section 44AB,Section 250(4),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Sangeet Bakliwal, CA
For Respondent: Shri Piyush Tripathi, Sr. DR
Hearing: 05.10.2026Pronounced: 06.10.2026

PER PARTHA SARATHI CHAUDHURY, JM

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 26.06.2026 for the assessment year 2017-18 as per the grounds of appeal on record.

2.

Brief facts in this case are as follows: “The assessment order pertains to Shri Ali Akber Husain, bearing PAN ALYPA1269N, resident of Durg, for Assessment Year 2017-18. The assessment was completed by the Income Tax Department, National Faceless Asses

The order continues below.

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