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

ITA 655/RPR/2026Status: DisposedITAT Panaji06 October 2026AY 2017-1810 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings initiated under section 147 were valid. The CIT(Appeals)/NFAC correctly observed that SFT data provided specific and credible information sufficient to form a prima facie belief of escaped income, and this information is statutorily recognized. The argument that the department had prior knowledge from the case of Late Maimuna Begum was rejected as those proceedings were dropped due to demise, not on merits, and each assessment is independent. The assessee's failure to respond to statutory notices was noted as a significant non-compliance. The Tribunal also found that the CIT(Appeals)/NFAC did not comply with Rule 46A(3) of the IT Rules, 1962, by failing to provide the additional evidence furnished by the assessee to the Assessing Officer for his comments and verification. Therefore, in the interest of substantive justice, the order of the CIT(Appeals)/NFAC was set aside, and the matter was remanded back to its file for compliance with Rule 46A(3), including obtaining a remand report from the AO, and thereafter passing fresh findings in terms of Section 250(4) & (6) of the Act, while adhering to principles of natural justice. The assessee was directed to comply with hearing notices.

What were the facts?

The assessee, Ali Akber Husain, is an individual resident for tax purposes. For Assessment Year 2017-18, the National Faceless Assessment Centre, Delhi, completed reassessment proceedings under section 147 read with sections 144 and 144B of the Income-tax Act, 1961, issuing an order on 20.09.2021. The original return declared an income of Rs.3,07,770/-. Reassessment was initiated based on information suggesting escapement of income, specifically substantial cash deposits of Rs.14,52,500/- during the demonetization period, as per Statement of Financial Transactions (SFT) data. These deposits were initially linked to the assessee's deceased mother, Late Maimuna Begum, but the business and bank account were found to be managed by the assessee. Despite notices under section 148 and 142(1), the assessee failed to provide explanations or supporting documents. Consequently, the Assessing Officer treated the entire Rs.14,52,500/- as unexplained income under section 69A and added it to the returned income, resulting in an assessed income of Rs.17,60,270/-. The assessee's appeal to the CIT(Appeals)/NFAC was dismissed.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961, by issuing notice under section 148, were valid, considering the information available from SFT data and the assessee's arguments regarding prior knowledge and non-compliance with natural justice. 2. Whether the addition of Rs.14,52,500/- as unexplained money under section 69A of the Income-tax Act, 1961, was justified, given the assessee's contentions regarding the recording of cash in books, VAT turnover, and deposits made in regular business bank accounts. Assessee's Contentions: - Reopening was based on mechanical reliance on SFT data and the department was aware of facts from earlier proceedings in the case of Late Maimuna Begum. - Violation of natural justice due to lack of proper notice. - Section 69A is inapplicable as cash was recorded in books, VAT turnover substantiates deposits, and deposits were in regular business accounts. - Submitted additional evidence like audit reports, VAT returns, bank statements, and reconstructed monthly summaries. Revenue's Contentions: - SFT information is statutorily recognized and can form the basis for reopening when high-value transactions are not reconcilable with returned income. - Proceedings in the case of Late Maimuna Begum were dropped due to demise, not on merits, and each assessment is distinct. - Failure to respond to statutory notices and monitor communications cannot invalidate proceedings. - The assessee failed to discharge the burden of proving the source of cash deposits with contemporaneous evidence.

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 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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