MANABI NANDI,GUWAHATI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, GUWAHATI, GUWAHATI

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ITA 197/GTY/2026Status: DisposedITAT Guwahati06 October 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Assessing Officer made an addition of Rs. 73,07,150/- under Section 69A of the Act based on cash found by the CID, Assam Police, and subsequent search operations. The addition was made due to the lack of a proper explanation for the source of the cash. The Tribunal observed that during the first appellate proceeding, there was no representation from the assessee's side. Considering the facts, the interest of justice, and the prayer of the assessee's counsel for another chance to produce documents, the Tribunal decided to remit the issue back to the file of the Ld. CIT(A) for fresh consideration. The Ld. CIT(A) is directed to decide the issue after giving the assessee a reasonable opportunity of being heard and to substantiate her case with cogent documents. The Tribunal cautioned that no further leniency would be granted if the assessee failed to comply.

What were the facts?

The assessee, Manabi Nandi, is appealing an order from the National Faceless Appeal Centre (NFAC) for Assessment Year 2018-19. The dispute concerns an addition of Rs. 73,07,150/- made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961. This addition was based on Indian currency found in the business premises of M/s Kamal Motors (India) on October 25, 2017. Following the discovery, a search under Section 132 of the Act was conducted, and statements were recorded. The AO noted that the assessee could not explain the source of the cash and that the cash balance maintained by the assessee in previous years was significantly lower than the amount found. The NFAC dismissed the assessee's appeal.

What were the issues?

1. Whether the addition of Rs. 73,07,150/- as deemed income under Section 69A of the Income Tax Act, 1961, is justified, considering the assessee's inability to explain the source of the cash found. Assessee's Contention: The assessee's counsel requested an opportunity to produce requisite documents to support her claim, indicating a procedural issue or a need for further evidence. The assessee also argued that the order passed by the NFAC was irregular and bad in law. Revenue's Contention: The Revenue's counsel relied on the orders of the lower authorities, implying that the addition made by the AO and confirmed by the CIT(A) was correct.

Which sections of the Income-tax Act were involved?

Section 69A,Section 131,Section 132,Section 153A,Section 142(1),Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, GUWAHATI

For Appellant: Shri Ramesh Goenka, Advocate
For Respondent: Shri P.S. Thuingaleng, CIT-DR
Hearing: 11.08.2026Pronounced: 06.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, GUWAHATI (Through Virtual hearing at Kolkata) SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 197/GTY/2026 Assessment Year: 2018-19

Manabi Nandi, Vs. Assistant Commissioner of Income Tax, Circle-2, C/o Kamal Motors (India), Guwahati, Tokobari, Near Railway Gate Aayakar Bhawan, No. 4, Guwahati Christian Bast, G.S. Road, Guwahati - 781005 PAN: AAWPN0002H APPELLANT RESPONDENT

Assessee by : Shri Ramesh Goenka, Advocate Revenue by : Shri P.S. Thuingaleng, CIT-DR

Date of hearing : 11.08.2026 Date of Pronouncement : 06.10.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER This is an appeal filed by the assessee against the order passed by National Faceless Appeal Centre (NFAC) [hereinafter referred to as “the Ld. CIT(A)] dated 20.02.2026, DIN & Order No. ITBA/NFAC/S/250/2025-26/1086288340(1) for the assessment year 2018-19 on the following grounds:

“For that the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi is not justified in passing the order u/s 250 of the I.T. Act, 1961 dismissing the appeal

2 ITA No. 197/GTY/2026 Manabi Nandi preferred by Appellant is totally irregular and bad in law and the order so passed vide dated 20.02.2026 is liable to annulled. For that the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi is not justified in confirming the addition of Rs. 73,07,150/- being deemed income of the Appellant u/s 69A of the I.T. Act, 1961 for the Assessment Year 2018-19. For that the Appellant reserves the right to add further grounds of appeal on or before the hearing of the appeal.” 2. Briefly stated the facts of the case are that as per information received from CID, Assam Police, that the Indian Currency in various demonetisation amounting to Rs. 73,07,150/- was found in the business-cum-godown premise of M/s Kamal Motors (India) at Tokobari, Near Railway Gate No. 4, Fancy Bazar, Guwahati – 781001 at the late hours of 25.10.2017. Accordingly, summons u/s 131 of the Act was issued by DDIT (Inv.) Guwahati on 26.10.2017 which was served on Shri Kamal Nandi in whose possession the cash was found, statement of Shri Kamal Nandi and Smt. Manabi Nandi, proprietor of M/s Kamal Motors (India) were recorded on oath u/s 131 of the Act on 26.10.2017 and during the statement recorded both Shri Kamal Nandi were unable to explain the source of cash received. Accordingly, in view of the statement memo of authorisation was issued u/s 132 of the Act to execute search on Smt. Manabi Nandi, consequent to the search notice u/s 132 of the Act, notice u/s 153A of the Act was issued to the assessee for filing return of income from AY 2012-13 to 2017-18 and subsequently notice u/s 142(1) of the Act was also issued in response to notice, the assessee furnished reply on examination of the purchase ledger, sales ledger, cash books as produced by the assessee counsel it was noted that the

3 ITA No. 197/GTY/2026 Manabi Nandi assessee is not maintaining huge cash balance for earlier years and as on 31.03.2017 the closing cash balance was observed as under:

Date Rs. 31.03.2012 25,427/- 31.03.2013 57,989/- 31.03.2014 1,45,354/- 31.03.2025 53,546/- 31.03.2016 40,120/- 31.03.2017 54,522/- 25.10.2017 336749.68

3.

AO further calculated cash balance from 26.10.2017 to 31.03.2018 average cash balance is below Rs. 1,00,000/- whereas the cash balance on 25.10.2017 is Rs. 73,36,749/-. Further, the entire statement were examined and statement recorded u/s 132(4) of the Act was also examined wherein the assessee states for inability to explain the source of cash and could not prove the documentary evidences of Rs. 73,07,150/-. During the course of search and seizure operation before recorded statement u/s 132(4) of the Act it was brought into the knowledge of the assessee of Sections 181, 177 and 180 of IPC. During the course of assessment proceeding, the assessee could not establish that credible documents to prove the source of cash. Accordingly, the AO relying on some judgments made addition u/s 69A of the Act of Rs. 73,07,150/-.

4 ITA No. 197/GTY/2026 Manabi Nandi 4. Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) decided the issue on the basis of information available along with Form No. 35 and dismissed the appeal of the assessee.

5.

The Ld. Counsel reiterated the submission made during the assessment proceeding and submitted that the assessee could not contest the notice issued by the Ld. CIT(A) and he requested and undertook that one more chance may be given to the assessee to produce the requisite document in support of her claim.

5.

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

6.

Considering the rival submission and perusing the material available on record. We noted that the AO made addition u/s 69A of the Act was Rs. 73,07,150/- on the basis of cash found by CID, Police Assam and which was later on consequent upon search u/s 132 of the Act. The case was completed u/s 143(3) of the Act and addition was made for want of proper explanation of the source of cash found and during the first appellate proceeding, there is no representation from the assessee side. Considering the facts of the case, interest of justice and prayer of the Ld. Counsel for the assessee, we are remitting this issue back to the file of Ld. CIT(A) for fresh consideration and decide the issue as per law after giving a reasonable opportunity of being heard to the assessee and

5 ITA No. 197/GTY/2026 Manabi Nandi assessee is directed to substantiate her case with cogent document in support of her claim and not seek unnecessary adjournment for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.

7.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced on 06.10.2026. Sd/- Sd/-

(Duvvuru RL Reddy) (Laxmi Prasad Sahu) Vice President Accountant Member Dated: 06.10.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//TRUE COPY// (MANISH BHOI) DEUPTY REGISTRAR KOLKATA BENCHES, KOLKATA

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