LATE RAGHAWENDRA PRATAP SINGH, THROUGH L/H SMT. GEETA SINGH,VARANASI vs. A.C.I.T., RANGE - 2, VARANASI

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI BENCH, VARANASI BEFORE HON’BLE JUSTICE (RETD.) C.V. BHADANG, PRESIDENT AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.225/VNS/2026 A.Y.-2017-18 Late Raghawendra Pratap Singh vs. Assistant Commissioner of (through L/H Smt. Geeta Singh) 714- Income Tax, Range-2, Varanasi 715, 7th Floor, Ambrosia Apartment, Lanka Varanasi-221005 PAN: AHBPS8614A (Appellant) (Respondent) Assessee by: Sh. Ashish Bansal, Advocate Revenue by: Sh. Amalendu Nath Mishra, CIT DR Date of hearing: 03.08.2026 Date of pronouncement: 05.10.2026 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC dated 20.02.2026, wherein the ld. CIT(A) has dismissed the appeal of the assessee that were filed against the order of the ld. Assessing Officer under section143(3) for the assessment year 2017-18 dated 23.12.2019. The grounds of appeal are as under:- “1. BECAUSE the CIT(A) failed to grant opportunity of personal hearing in the matter, although sought specifically by the appellant, before passing the impugned appellate order dated 20.02.2026, principles of natural justice has been violated in the present case, accordingly, order passed by the CIT(A) is vitiated and the same deserves to be set aside. 2. BECAUSE the CIT(A) grossly erred in sustaining additions of Rs.5,68,17,719 as unexplained investments/capital without appreciating that the appellant had furnished explanations, bank statements, and evidence of sources including FDRS, LIC maturity proceeds, professional receipts, and property transactions. 3-BECAUSE the CIT(A) dismissed submissions as "unsatisfactory" without examining the submission and annexed bank statements, Form 26AS, 1

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 property deeds, and audited accounts, thereby violating principles of natural justice. 4. BECAUSE the authorities below failed to appreciate that opening balances of Rs. 42,972/- of the SB A/c no. 21085094201 in Allahabad Bank, Ravindrapuri, Varanasi cannot be subjected to taxed during the year under consideration. 5. BECAUSE the opening balance of '8 FDRs' with Allahabad Bank, matured during the year under consideration and duly disclosed in the audited books of account, cannot be treated as appellant's unexplained investments/deposits/money in terms of provisions of section 69/69A of the Act as the principal value of those FDRS aggregating to Rs.50,30,000/- relate back to the financial year 2008-09 and the interest accrued on these FDRs over the period were duly disclosed in the return filed by the appellant in the respective assessment year(s), the authorities below have failed to consider the same while making addition/ affirming the same in the hands of the appellant. 6. BECAUSE the opening balance of 'FDR' with Bank of Baroda, matured during the year under consideration and duly disclosed in the audited books of account, be treated as appellants unexplained investments/deposits/money in terms of provisions of section 69/69A of the Act as the principal value of those FDR of Rs.2,00,00,000/- relate back to the financial year 2011-12 and the interest accrued on these FDRs over the period were duly disclosed in the return filed by the appellant in the respective assessment year(s), the authorities below have failed to consider the same while making addition/affirming the same in the hands of the appellant. 7. BECAUSE the addition of Rs.22.35,000/- made by the Id. Assessing officer as also affirmed by the CIT(A) is wholly erroneous as the same represents the investment in shares of Alaknanda Hospital Pvt. Ltd. which was invested by the appellant way back in 2005 and the same has been transferred during the year from the personal set of books maintained by the Appellant to the proprietorship business account of M/s. Neuro Surgical Centre as capital addition, and the same cannot at all be taxed under section 69/69A of the Act. 8. BECAUSE the addition of Rs.56,000/- made by the ld. Assessing officer as also affirmed by the CIT(A) is wholly erroneous as the same represents the opening balance of purchase of Air Conditioner way back on 30.3.2016 (F.Y. 2015-16) by taking finance from Bajaj Finance Ltd. and transferred during the year in the books of account from personal sets to the proprietorship business account of M/s. Neuro Surgical Centre as capital addition, and the same cannot at all be taxed under section 69/69A of the Act. 9. BECAUSE the addition made by the Id. Assessing Officer aggregating to Rs.46,32,492/-made up as under; i) maturity amount of insurance policy of Rs.3.38,531/-received during the year being exempt from tax under section 10(10D) of the Act (excluding

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 Rs.1,99,689 received from HDFC Life which has been offered to tax during first appellate proceeding); ii) redemption of old mutual fund of Rs.1,19,894/- (capital gain exempt u/s.10(38)); iii) maturity of old FDRs with 3 banks aggregating to Rs.6,74,378/-; iv) partial return of advance aggregating to Rs.22,50,000/- out of advance aggregating to Rs.1,30,00,000/- given by the appellant to Sureka family during the year towards purchase of property; v) gift of Rs.1,50,000/- from appellant's elder son - Rishi Singh through banking channels i.e. in Bank of Baroda Overdraft A/c No. 24390400011546; and vi) capital amount of Rs.9,00,000/- introduced by the appellant on 28.7.2016 out of withdrawal from his personal saving account held with Bank of Baroda bearing account number 24390100004774: is wholly erroneous both of facts as well as in law, the CIT(A) has grievously erred in affirming the same without considering the submission and supporting evidences submitted alongwith response filed before him. 10. BECAUSE the investment in House Property at Bhadaini of Rs.1,32,38,429/- has been erroneously added by the Id. Assessing Officer as alleged unexplained investment, as also being erroneously affirmed by the CIT(A) in the impugned appellate order, as the same was out of duly disclosed sources being; i) overdraft facility of Rs.1 crore was taken by the appellant on 27.7.2016 from Bank of Baroda bearing A/c No. 24390400011546, ii) interest of Rs.5,18,426/- on said overdraft account for the year having been capitalized; and iii) balance amount was out maturity receipt of FDR with Bank of Baroda credited on 22.7.2016 in Bank of Baroda Saving Bank A/c No. 24390100023403 by the Applicant. No part of the same is unexplained which could be said to liable for taxation under section 69/69A of the Act. 11. BECAUSE the CIT(A) failed to appreciate that the impugned sums represented capital already taxed in earlier years or exempt receipts (insurance maturity, bank interest), and hence could not be deemed unexplained under section 69/69A of the Act. 12. BECAUSE the CIT(A) erred in holding that service of notices was sufficient despite admitted non-receipt of earlier communications, thereby depriving the appellant of effective opportunity to rebut allegations. 13. BECAUSE the CIT(A) failed to exercise independent judicial mind and merely reiterated the AO's conclusions, contrary to settled law that appellate authority must adjudicate afresh. 3

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 14. BECAUSE the CIT(A) ignored binding precedents that capital introduced out of disclosed sources and recorded in audited books of account which stood accepted also, cannot be taxed u/s 69/69A, and that additions cannot be sustained merely on presumptions without cogent evidence. 15. BECAUSE the CIT(A) has completely erred in observing that appellant failed to provide a cogent trail of the accumulated capital mentioned in the submissions and the Id. Assessing Officer was correct in relying upon the available financial data and the same cannot be termed baseless. 16. BECAUSE the CIT(A) has erred in affirming the additions made by the Id. Assessing Officer, by wrongly observing that the appellant failed to produce any fresh evidence or bank statements to reconcile the discrepancies noted by the Id. Assessing Officer, as entire details were placed by the appellant before him and he has brushed aside merely by stating that the explanation offered by the appellant was found to be unsatisfactory and unsupported by evidence. 17. BECAUSE the order appealed against is contrary to the facts, law and principle of natural justice. The appellant craves leave to add, alter, amend, or withdraw any ground at the time of hearing.”

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 and withdrawal from bank account for property purchase. As regards, the investment of Rs. 22,35,000/- shown in the name of Alaknanda Hospitals P. Ltd., it was submitted that certain fixed assets had been purchased for the hospitals by the assessee but the payment had been made from the personal bank account of the assessee. With regard to loans and advances, it was submitted that the loans and advances of Rs. 1,30,00,000/- were on account of property purchased etc,. The ld. Assessing Officer considered the replies filed by the assessee but he held that the same were not satisfactory due to the failure to submit supporting evidences regarding disclosure of such money / investment /deposits in his return of income. From the same, he concluded that the assessee had not explained the source of funds introduced as capital, the capital introduced in Alaknanda Hospitals P. Ltd., the receipts from Life Insurance and house property at Bhadaini and the balances in the various bank accounts and therefore, he added all these amounts back to the income of the assessee under section 69/69A of the Act and assessed total income of the assessee at Rs. 6,25,52,580/-. 3. Aggrieved with the said assessment order, the assessee filed an appeal before the ld. CIT(A), NFAC. The ld. CIT(A) considered the submissions of the assessee that the amounts brought to tax by the ld. Assessing Officer had already been taxed, but held that the burden of proof lay with the assessee to explain the source and nature of such credits. He pointed out that the assessee had failed to produce any fresh evidence or bank statements to reconcile the discrepancies noted by the ld. Assessing Officer and therefore, he confirmed the additions that were made by the ld. Assessing Officer. 4. Aggrieved with the said dismissal of his appeal, the assessee has come before us. Sh. Ashish Bansal, Advocate (hereinafter referred to as the ld. AR) submitted that the ld. CIT(A) had grossly erred in sustaining the 5

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 additions made by the ld. Assessing Officer, without appreciating the fact that the assessee had furnished explanations, bank statements and evidences of the sources including FDR, LIC Maturity proceeds, professional receipts and property transactions. But without any examination of any of these documents, the same had been held to be unsatisfactory. It was submitted that the assessee was maintaining eight fixed deposits receipts with Allahabad Bank, which had matured during the year under consideration and had duly been disclosed in the audited accounts of the assessee. This could neither be treated as an investment because these were not fresh investments, but rather the maturity proceeds of FDRs, of which Rs. 50,30,000/- related back to the F.Y. 2008-09 and the interest accrued on these FDRs over the period had been disclosed in the returns filed by the assessee in the respective assessment years. Similarly, it was submitted that the opening balance of the FDR with the Bank of Baroda had matured during the year under consideration and had duly been disclosed in the audited books of accounts. In view of these submissions, the ld. AR submitted that none of these investments could be considered for the purposes of section 69/69A, as they stood fully explained out of the maturity proceeds of fixed deposits made in earlier years. With regard to the addition of Rs. 22,35,000/- made by the ld. Assessing Officer towards investment of shares in Alaknanda Hospitals P. Ltd., it was submitted that this investment had been made by the assessee way back in 2005 and the same had been transferred from the personal set of books maintained by the assessee to the proprietorship business account of M/s Neuro Surgical Centre as capital addition during the year. The same could therefore, not be brought to tax under section 69/69A of the Act. Similarly, an addition of Rs. 56,000/- made by the ld. Assessing Officer on account of purchase of AC was submitted to be erroneous as the same had been purchased by the assessee on his personal account on 6

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 30.03.2016 after taking a loan from M/s Bajaj Finance Limited and had only been transferred to the proprietorship business, from the personal books of the assessee during the course of the year. The ld. AR also pointed out that there was an opening balance of Rs. 42,972/- in savings bank A/c No. 21085094201 at Allahabad Bank, Ravindpuri, Varanasi, which could not be subjected to tax during the year under consideration. With regard to the additions made by the ld. Assessing Officer aggregating to Rs. 46,32,492/-, the ld. AR submitted that the same were made up as under:- “i) maturity amount of insurance policy of Rs.3.38,531/-received during the year being exempt from tax under section 10(10D) of the Act (excluding Rs.1,99,689 received from HDFC Life which has been offered to tax during first appellate proceeding); ii) redemption of old mutual fund of Rs.1,19,894/- (capital gain exempt u/s.10(38)); iii) maturity of old FDRs with 3 banks aggregating to Rs.6,74,378/-; iv) partial return of advance aggregating to Rs.22,50,000/- out of advance aggregating to Rs.1,30,00,000/- given by the appellant to Sureka family during the year towards purchase of property; v) gift of Rs.1,50,000/- from appellant's elder son - Rishi Singh through banking channels i.e. in Bank of Baroda Overdraft A/c No. 24390400011546; and vi) capital amount of Rs.9,00,000/- introduced by the appellant on 28.7.2016 out of withdrawal from his personal saving account held with Bank of Baroda bearing account number 24390100004774:” It was therefore, submitted that the ld. CIT(A) was unjustified in confirming these additions without considering the submissions and supporting evidence submitted by the assessee with regard to the same. Finally, with regard to the house property at Bhadaini on account of which an investment of Rs. 1,32,38,429/- had been added back, it was submitted that the same stood disclosed on account of; “i) overdraft facility of Rs.1 crore was taken by the appellant on 27.7.2016 from Bank of Baroda bearing A/c No. 24390400011546,

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 ii) interest of Rs.5,18,426/- on said overdraft account for the year having been capitalized; and iii) balance amount was out maturity receipt of FDR with Bank of Baroda credited on 22.7.2016 in Bank of Baroda Saving Bank A/c No. 24390100023403 by the Applicant.” and since the entire amount was explained, it could not be brought to tax under section 69/69A of the Income Tax Act. The ld. AR further submitted that the ld. CIT(A) was in error in affirming that the additions made by the ld. Assessing Officer were on account of the fact that the assessee had not produced any supporting evidences with regard to the submissions made by him. He invited our attention to the paper book filed by him and showed that pages 1 to 17 contained a copy of the written submissions filed before the ld. Assessing Officer and the supporting evidences with regard to the same were contained from pages 5 to 16. The ld. AR also invited our attention to the detailed submissions filed before the ld. CIT(A) in which the assessee had submitted voluminous documents in support of his submissions. It was submitted that the ld. CIT(A) had not considered any of these evidences and had accordingly dismissed the appeal of the assessee in a summary manner. It was, therefore prayed that the order of the ld. CIT(A) be set aside and the assessee be granted a further opportunity to demonstrate the additions made in his hands were unwarranted. 5. On the other hand, Sh. Amalendu Nath Mishra, CIT DR (hereinafter referred to as the ld. DR) submitted that a perusal of the submissions made by the assessee before the ld. Assessing Officer would demonstrate that the submissions were very sketchy and hardly any material had been provided before the ld. Assessing Officer, of the nature which the ld. AR was now submitting. Since the ld. Assessing Officer had not sought the introduction of any additional evidence in the Form no. 35, the ld. CIT(A) had not considered 8

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 the documents that had been filed. Therefore, the ld. CIT DR submitted that, in view of the fact that the assessee could not make out the case for non- furnishing of the documents before the ld. Assessing Officer, the ld. CIT(A) was justified in deciding the issue without reference to the same. 6. We have duly considered the facts and circumstances of the case. It appears that during the course of assessment proceedings, the assessee furnished a short reply alongwith which, it attached copies of all its bank accounts. However, the ld. Assessing Officer was not convinced with the submissions and accordingly made the additions. Thereafter, in the course of appeal, assessee filed several other documents in order to further support its arguments. However, the ld. CIT(A) does not appear to have considered these documents. Though the ld. CIT DR has argued that this was because the assessee had not made out a justified case under Rule 46A, we noticed that there is no discussion in the order of the ld. CIT(A) to this effect. It appears that the documents and explanations filed have simply not been considered, because para 4 of the order of the ld. CIT(A) only makes reference to the statement of facts alongwith the Form No. 35 being taken on record. In the circumstances, after considering that the ld. CIT(A) had issued notices to the assessee on 7.01.2021 and 23.09.2024, we hold that the ld. CIT(A) was bound to consider the submissions made by the assessee and the documents furnished by him in the course of appellate proceedings in response to those notices and the failure to do this, renders his order deficient and violative of the principles of natural justice. Accordingly, in the interest of justice, we restore this matter to the file of the ld. CIT(A) so that the explanations and documents filed by the assessee in response to his notices dated 7.01.2021 and 23.09.2024 may be considered and a fresh order be passed after consideration of the same.

ITA No.225/VNS/2026 Lt. Raghawendra Pratap Singh, Through L/H Smt. Geeta Singh A.Y. 2017-18 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced as per Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963 on 05.10.2026.

Sd/- Sd/- [JUSTICE (RETD.) C.V. BHADANG] [NIKHIL CHOUDHARY] PRESIDENT ACCOUNTANT MEMBER DATED: 05/10/2026 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR, ITAT 4. CIT, 5. The CIT(A) By order Sr. P.S.