ISHWAR SINGH,GUWAHATI vs. ITO, W-1(3), GUWAHATI

For that, on the facts and in the circumstances of the case, the Ld. CIT(A) erred in law and in fact by confirming the additions made by the Ld. AO, arbitrarily relying on an earlier adverse remand report dated 17/11/2023 while entirely ignoring the subsequent, favourable remand report dated 21/12/2023, without assigning any cogent reasons.

For that the Ld. CIT(A) erred in confirming the addition of ₹3,14,57,697/- u/s. 69A of the Act, failing to appreciate that the said bank deposits were already recorded as business turnover in the books of accounts maintained for the business and audited u/s. 44AB. The authorities below erred in accepting the business income computed on these receipts while simultaneously taxing the gross receipts as unexplained money, thereby resulting in impermissible double taxation." 3. or that the Ld. CIT(A) erred in law and on facts in confirming the addition of 3,14,57,697/- made u/s. 69A of the Act, entirely failing to appreciate that the Ld. AO had concurrently accepted the Appellant's returned income offered u/s. 139(4), which was processed treating the very same bank deposits as business turnover.

For that the assessment order passed by the Ld. AO is bad in law and void ab-initio, having been passed in gross violation of the principles of natural justice (Audi Alteram Partem), by providing a mere 5 days-which included continuous public holidays-to respond to a voluminous show-cause notice proposing addition of Rs.3,14,57,697/-.

For That the Ld. CIT(A) as well as Ld. AO erred in law in not allowing deduction claimed under chapter VIA amounting to Rs.107540 in the return filed by the Appellant and taxing the gross total income, without assigning any reasons, whatsoever, for not allowing such deductions claimed."

Though the Registry has not informed that the appeal is barred by limitation, the assessee has filed a petition for condonation of delay explaining the reasons that his counsel was not aware of the digital signature certificate requirement to verify the online memo of appeal, and subsequent technical glitches in authenticating the digital signature application caused an unintentional delay beyond his control. After perusing the same, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay, if any, and admit the appeal for adjudication.

Briefly stated the facts of the case are that the assessee filed return of income declaring income of ₹8,53,217/- claiming deduction under chapter VI-A for ₹1,07,540/- and filed return on 31.03.2015. Subsequently, notice u/s 148 of the Act was issued on 26.03.2021 as per the information received from the Investigation Wing-1, Guwahati, that the assessee had deposited cash and other deposits during the FY 2013-14 in ICICI Bank, Beltola Branch in four accounts for ₹3,14,57,697/-. Accordingly, notice u/s 148 of the Act and other statutory notices were also issued to the assessee. The assessee made compliances on 01.03.2022 and subsequently filed details. The assessee furnished Form No.-3CD and other documents. The Ld. AO issue Draft Assessment Order and the due date was fixed compliance on 21.03.2022. But the assessee did not submit any reply. Accordingly, after considering the judgement of Hon'ble Apex Court in the case of Chuharmal Vs CIT reported in (1988) 172 ITR 250 and other High Court decisions he made addition u/s 69A of the Act.

Aggrieved from the order of the AO, the assessee filed an appeal before the Ld. CIT(A). During the course of the appellate proceeding, the Ld. CIT(A) called for the remand report two times and he also after considering the remand report dismissed the appeal of the assessee.

Aggrieved from the order of Ld. CIT(A) the assessee is in appeal before the ITAT. The Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A) and stated the facts of the case and further submitted that the Ld. CIT(A) has not properly adjudicated on the second remand report submitted by the Ld. AO. He further, requested that one more opportunity may be granted to the assessee to explain the source of cash deposits.

On the other hand, the Ld. DR relied on the orders of the lower authorities.

Considering the rival submissions and perusing the material available on records and order of the authorities below, we noted that the case of the assessee was reopened on the basis of information that the assessee has deposited cash in his four bank accounts for ₹3,14,57,697/- and during the proceeding u/s 147 of the Act, the assessee was asked to explain the sources of cash deposits but the assessee was unable to explain the source of cash deposits. Accordingly, the AO made addition u/s 69A of the Act. During the appellate proceedings the remand report was called for from the AO and the AO submitted the remand report. But the main grievance of the assessee is that the Ld. CIT(A) has not properly appreciated on the issue of remand report and further submitted that the case of the assessee was audited u/s 44AB of the Act and all transactions are recorded in the bank account and books of accounts of the assessee. But during the course of 147 proceedings, it could not have been properly represented before the AO. Considering the facts of the case , prayer of the assessee’s Counsel and in the interest of justice, we are remitting this issue back to the file of the AO for fresh consideration and decision as per law after giving reasonable opportunity of being heard to the assessee and the assessee is directed to substantiate his case with cogent documents and not seek unnecessary adjournments for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 6th October, 2026. [Duvvuru RL Reddy] [Laxmi Prasad Sahu] Vice President Accountant Member Dated: 06.10.2026 Bidhan (Sr. P.S.)