AGRAJ ANANAD,MADHEPURA vs. ITO WARD-3(5), SAHARSA

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ITA 28/PAT/2026Status: DisposedITAT Patna13 October 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had uploaded certain information and details for the AO's consideration. However, the AO observed that details were not furnished and proceeded to estimate income. The Tribunal found it apparent that the information and details of the assessee were not considered by either the AO or the Ld. CIT(A). Consequently, the Tribunal considered it fit to set aside the impugned assessment and restore all issues to the file of the AO for a de novo assessment. The AO is directed to frame the assessment after affording an opportunity of hearing to the assessee. The ratio decidendi is that assessments made without considering the evidence and submissions furnished by the assessee are liable to be set aside and remanded for fresh consideration. The operative direction is to set aside the assessment order and restore the issues to the AO for fresh adjudication.

What were the facts?

The assessee, Agraj Anand, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the NFAC, Delhi (Ld. CIT(A)) dated 15.10.2025. This order upheld an assessment order passed under Section 143(3) of the Income Tax Act, 1961, on 19.12.2019 by the Assessing Officer (AO). The assessment year in question is 2017-18. The assessee's appeal to the Ld. CIT(A) was dismissed. The present appeal to the ITAT was filed with a delay of 19 days, which was condoned. The core of the dispute involves additions made by the AO, which the assessee claims were arbitrary and made without considering submitted details. The Ld. CIT(A) mechanically confirmed these additions.

What were the issues?

1. Whether the assessment order passed under Section 143(3) of the Income Tax Act, 1961, making arbitrary additions, is bad in law and fact, and also in procedure? (Mixed question of law and fact) 2. Whether the AO erred in making an addition of Rs. 63,55,000/- under Section 68 read with Section 158BBE of the Act based solely on cash deposits into a current bank account during the demonetization period, ignoring cash available from business transactions, and whether such addition is based on mere suspicion? (Mixed question of law and fact) 3. Whether the AO erred in making an addition of Rs. 1,98,012/- under Section 44AD of the Act by applying a profit rate of 8% on the disclosed turnover, on which the assessee had already determined and paid tax, especially when the return was filed based on audited books of account under Section 44AB, rendering Section 44AD inapplicable? (Mixed question of law and fact) Assessee's contentions: - All necessary details were provided to the AO, but they were not considered. The Ld. CIT(A) mechanically confirmed the additions. - The addition of Rs. 63,55,000/- under Section 68 r.w.s. 158BBE was based on mere suspicion and ignored business cash availability. - The addition of Rs. 1,98,012/- under Section 44AD was baseless as the assessee had already declared profits on audited turnover, and Section 44AD is not applicable when accounts are audited under Section 44AB. Revenue's contentions: - The Ld. DR relied on the orders of the authorities below and sought dismissal of the appeal.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68,Section 158BBE,Section 44AD,Section 44AB,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA ‘DB’ BENCH

Before: SHRI PRADIP KUMAR CHOUBEY & SHRI GOPALAN GURUSAMY

For Appellant: Shri Ravi Shah, AR
For Respondent: Shri Ravi Kant Chowdhary, Sr. DR
Hearing: 12.10.2026Pronounced: 13.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA ‘DB’ BENCH (VIRTUAL HEARING AT KOLKATA) BEFORE SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER AND SHRI GOPALAN GURUSAMY, ACCOUNTANT MEMBER ITA No.28/PAT/2026 Assessment Year: 2017-18 Agraj Anand Vs. ITO, Ward-3(5), Saharsa Anand Store, Murliganj, District- Madhepur, Bihar-852113 [PAN: ALXPA9342H] APPELLANT RESPONDENT Appellant by : Shri Ravi Shah, AR Respondent by : Shri Ravi Kant Chowdhary, Sr. DR Date of hearing : 12.10.2026 Date of Pronouncement : 13.10.2026 O R D E R PER GOPALAN GURUSAMY, ACCOUNTANT MEMBER: The present Appeal has been filed by the Assessee against the order of the NFAC, Delhi (hereinafter referred to as the “Ld. CIT(A)”), dated 15.10.2025 passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), for the Assessment Year 2017-18 on following Grounds of Appeal:-

1.

1. For that, on the fact & circumstances of the case, the assessment order u/s.143(3) by making arbitrary addition is bad in law & fact and also the procedure of assessment. 2. For that, on the fact & circumstances of the case, the learned Assessing Officer erred in making addition u/s 68 r.w.s.158BBE of the Act on the mere basis of cash deposits made into Current Bank Account No.31721170938 during the demonetization period ignoring the cash available from business transactions. The basis of addition shown by the Ld. AO in the assessment order revealed that attempt of addition is nothing but on mere suspicious which cannot be sustainable in the eye of law. Therefore, such hypothetical addition of Rs.63,55,000/- is arbitrary, wrong, unjustified and hence, liable to be deleted.

ITA No.28/PAT/2026 Agraj Anand: A.Y: 2017-18 3. For that, on the fact & circumstances of the case, the learned Assessing Officer erred in making addition u/s 44AD of the Income Tax Act, 1961 of Rs.1,98,012/- by applying profit @ 8% on the disclosed turnover on which the assessee has already determined the profit of business and paid tax thereon. Secondly section 44AD of the Act is not applicable in the instance case because return of income has been filed on the basis of books of account audited u/s44AB of the Act. Therefore, such addition is baseless, arbitrary and without application of mind, hence, the addition of Rs.1,98,012/- is fit to be deleted. 4. For that, the appellant craves, leave to add, modify and amend any of the grounds of the appeal at the time of hearing. 2. There is a delay of 19 days in filing the present Appeal. Assessee filed an application for condonation of delay explaining the cause for the delay. For the reasons stated in the application for condonation of delay, the delay of 19 days in filing the present Appeal is hereby condoned. The appeal is taken up for adjudication.

3.

Brief facts of the case are that, an Assessment Order came to be passed u/s 143(3) of the Act on 19.12.2019 by making certain additions. Aggrieved by the Assessment Order dated 19.12.2019, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 15.10.2025, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 15.10.2025, Assessee filed the present Appeal.

4.

The Ld. AR contended that all the details were filed before the Assessing Officer but the Assessing Officer failed to consider any of the submissions made before him and the Ld. CIT(A) has mechanically confirmed the impugned addition.

ITA No.28/PAT/2026 Agraj Anand: A.Y: 2017-18 5. Per contra, the Ld. DR relying on the order of the Authorities below, sought for dismissal of the Appeal.

6.

We have heard the parties and perused the material available on record. From the perusal of the assessment order, it is seen that the Assessee has uploaded certain information and details for the consideration of the Assessing officer. However, the Assessing officer observes that details were not furnished and hence proceeded to estimate the income. It is apparent that the information and details of the Appellant has not been considered both by the Assessing officer and the Ld. CIT(A). Therefore, we consider it fit to set aside the impugned assessment and restore all the issues to the file of the Assessing officer to frame de novo assessment taking into consideration the information and details furnished by the Assessee. The Assessing officer shall frame the assessment after affording opportunity of hearing to the Assessee.

7.

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

Order pronounced on 13.10.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (GOPALAN GURUSAMY) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 13.10.2026 DP, PS Page | 3

ITA No.28/PAT/2026 Agraj Anand: A.Y: 2017-18 Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY//

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