Noorul Hasan Baig vs. Commissioner Of Income Tax (Dr)

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ITA/87/2024HC Madhya Pradesh02 February 2026Bench: HON'BLE SHRI JUSTICE VIVEK RUSIA5 pages
For Petitioner: Ashish Goyal
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal, finding no substantial question of law. Regarding the additional evidence, the Court held that the materials were in the appellant's possession and could have been produced before the lower authorities with serious efforts, making it unbelievable that they were beyond reach. The Tribunal's examination of the bank account revealed that the entire money was withdrawn by specific dates in August and September 2012 and remained unutilized, being re-deposited within three months on 05.11.2012. The Court found the Tribunal's observation that the explanation for the Rs. 9 lac deposit in HDFC Bank could not be accepted solely on the ground of lost books of accounts to be correct. The Court also noted the Tribunal's finding that the Rs. 4 lac deposit in Axis Bank was explained as it was out of cash withdrawn by self-cheque, thus accepting the source for that amount. The Court concluded that the explanation for the HDFC Bank deposit was not satisfactory and the Tribunal's reasoning was correct.

What were the facts?

The appellant, Noorul Hasan Baig, is challenging an order dated 22.09.2023 by the Income Tax Appellate Tribunal (ITAT), Indore, which affirmed an addition of Rs. 9 lac for the assessment year 2013-14. The appellant initially disclosed a turnover of Rs. 1,40,65,870/- and total income of Rs. 10,51,202/-. The appellant's Chartered Accountant lost the books of accounts. The Assessment Officer initially made an addition of Rs. 13,00,000/-. This order was set aside under Section 263, leading to a fresh assessment order on 13.12.2018, maintaining the Rs. 13 lac addition. The CIT(A) dismissed the appeal, and the ITAT partly allowed it, reducing the addition to Rs. 9 lac. The appellant claims the Rs. 9 lac deposit in HDFC Bank was duly disclosed, with withdrawals made by an employee who issued certificates. These documents were presented as additional evidence before the ITAT.

What were the issues?

1. Whether the ITAT ought to have considered the additional evidence in the interest of justice as the last fact-finding authority, rather than rejecting it for being furnished for the first time? 2. Whether the ITAT erred in law by failing to adjudicate upon the admissibility and consider the additional evidence furnished under Rule 29 of the ITAT Rules? 3. Whether the ITAT erred in treating the appellant's contention of re-deposit from earlier withdrawals as being raised for the first time before the ITAT? 4. Whether the ITAT, having accepted cash deposits from withdrawals in respect of Axis Bank, could take a contrary stand and treat the amount deposited in HDFC Bank as undisclosed income? Assessee's Contentions: The appellant argued that additional evidence should be considered under Order 41 Rule 27(1) of the CPC, citing K. Venkatramaiah Vs. A Seetharama Reddy and CIT Vs. Kum Satya Setia. The appellant contended that the source of the Rs. 9 lac deposit in HDFC Bank was disclosed and supported by employee certificates, which were presented as additional evidence. The appellant also pointed out the ITAT's acceptance of cash deposits from withdrawals in the Axis Bank case. Revenue's Contentions: The respondent argued that the tax effect was less than Rs. 9 lac, making the appeal not entertainable. The respondent also highlighted concurrent findings by the Assessment Officer, CIT, and ITAT, suggesting no interference was warranted.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 263,Section 41,Section 27,Section 29

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BEFORE HON'BLE SHRI JUSTICE VIVEK RUSIA & HON'BLE SHRI JUSTICE PRADEEP MITTAL ON THE 2nd OF FEBRUARY, 2026 INCOME TAX APPEAL No. 87 of 2024 NOORUL HASAN BAIG Versus COMMISSIONER OF INCOME TAX (DR) AND OTHERS Appearance: Shri Ashish Goya- Advocate through video conferencing for the appellant. Shri Harpreet Singh Gupta- Advocate for the respondent. ORDER Per: Justice Vivek Rusia Heard on I.A No. 18785 of 2025 and admission. The appellant has filed this appeal under 260A of the Income Tax Act, 1961, challenging the order dated 22.09.2023 (Annexure A-1) passed by the Income Tax Appellate Tribunal, Indore (ITAT) in ITA No.153/IND/2023, whereby the addition of Rs.9 lac in respect of cash deposit in the bank in respect of assessment year 2013-14 has been affirmed. 2. The facts of the case, in short, are as under:- (a) The appellant filed a return on 30th September, 2013, disclosing gross turnover from civil construction of Rs.1,40,65,870/- for the assessment year 2013-14. The total income audited was Rs.10,51,202/-. According to the 1 ITA-87-2024 NEUTRAL CITATION NO. 2026:MPHC-JBP:10247 Signed by: TARUN KUMAR SALUNKE Signing time: 06-02-2026 17:17:34 Signature Not Verified

appellant, the Chartered Accountant lost the books of accounts, and despite a police complaint, the same were not found. The proceedings under section 143(3) were completed on 25.02.2016 (Annexure A-4) by the Assessment Officer, making an addition on account of cash deposit of Rs.13,00,000/-. The appellant preferred an appeal before the CIT (A) on 17.03.2016. Meanwhile, the assessment order dated 25.02.2016 was set aside in revisional jurisdiction under section 263 of the IT Act, hence the appellant withdrew the appeal on 19.03.2018. Based on the revisional order, the Assessment Officer passed a fresh assessment order under section 143(3) read with section 263 on 13.12.2018, maintaining the addition of Rs. 13 lac. (b) Being aggrieved by the aforesaid order, the appellant preferred an appeal (Annexure A-8) before the CIT(A), which came to be dismissed on 21.02.2023 (Annexure A-9). Thereafter, the appellant approached the ITAT and the same has partly been allowed by reducing the addition from 13 lakhs to 9 lakhs vide order dated 22.09.2023. Hence, this appeal before this Court is only in respect of challenging the addition of Rs.9 lac. (c) According to the appellant, the source of deposit and withdrawal of Rs. 9 lac on 05.11.2012 in the HDFC Bank account was duly disclosed, and these amounts were withdrawn by the employee, who issued certificates to that effect. These documents were filed as "additional evidence" before the learned ITAT for the first time. ITAT Although has accepted the cash deposit in Axis Bank, but rejected the plea for justification for the cash deposit of Rs.9 lac in HDFC Bank. 3. Learned counsel for the appellant submits that additional evidence is 2 ITA-87-2024 NEUTRAL CITATION NO. 2026:MPHC-JBP:10247 Signed by: TARUN KUMAR SALUNKE Signing time: 06-02-2026 17:17:34 Signature Not Verified

liable to be considered under Order 41 of Rule 27(1) of the Code of Civil Procedure, as held by the Apex Court in the case of K. Venkatramaiah Vs. A Seetharama Reddy, AIR 1963 SC 1526. The appellate tribunal has the power to admit the additional evidence if a sufficient explanation has been given due to non-availability of these documents at the relevant time, as held by this Court in CIT Vs. Kum Satya Setia; (1983) 143 ITR 486 (M.P) . 4. Learned counsel for the appellant proposed the following substantial questions of law:- "1. Whether in law and in the facts and circumstances of the case whether the learned ITAT ought to have considered the additional evidences in the interest of justice and as a last fact finding authority; and not merely rejected it by saying that these documents were furnished for the first time before us ? 2. Whether, in facts and circumstances of the case, Whether the learned Tribunal erred in law in failing to adjudicate upon the admissibility and consider the additional evidence furnished by the appellant under rule 29 of the ITAT Rules ? 3. Whether in law and in the facts and circumstances of the case the learned ITAT merely erred in passing the order by treating that the contention of appellant of re- deposit from earlier withdrawals was only before the learned ITAT and was never contended before? 4. Whether in law and in the facts and circumstances of the case, can learned ITAT who themselves has accepted cash deposits from withdrawals in respect of Axis Bank; then can they under law can take contrary stand and treat the amount deposits in HDFC Bank as undisclosed Income?" 5. Learned counsel for the respondent submits that the tax effect in this appeal is much less than Rs.9 lacs, hence this appeal is not liable to be entertained on this ground alone. Apart from that, there are concurrent findings recorded by the Assessment Officer, CIT as well as ITAT. Hence, no interference is called for. 3 ITA-87-2024 NEUTRAL CITATION NO. 2026:MPHC-JBP:10247 Signed by: TARUN KUMAR SALUNKE Signing time: 06-02-2026 17:17:34 Signature Not Verified

(VIVEK RUSIA) JUDGE (PRADEEP MITTAL) JUDGE 6. We have heard learned counsel for the parties and perused the record. 7. So far additional evidence to be considered at the appellate stage is concerned, these materials were very much in possession of the appellant, and it cannot be believed that they were beyond the reach and could have recovered by making serious efforts, but were not produced before the Assessment Officer as well as before the CIT. Learned Tribunal after examining the bank account held that the entire money was withdrawn as on 09.08.2012, 11.08.2012, 18.08.2012 and 17.09.2012 and remained un- utilized and re-deposited within a gap of 3 months on 05.11.2012; therefore, the explanation for the deposit of Rs. 9 lac in HDFC bank cannot be accepted only on the ground that audit and account books were lost. The learned Tribunal's observations that it cannot be believed that these amounts remained un-utilized for 3 months and deposited again in the same account appear to be correct. But so far, the deposit of Rs.4 lac in the Axis Bank is concerned, the learned Tribunal has held that Rs. 6 lac cash was withdrawn on 12.12.2012 from Axis Bank by way of self-cheque, out of which Rs.4 lac was deposited on 19.01.2013, the source has been explained. Therefore, we do not find any substantial question of law involved in this appeal. Hence, this appeal is dismissed as there is no substantial question of law. tarun

4 ITA-87-2024 NEUTRAL CITATION NO. 2026:MPHC-JBP:10247 Signed by: TARUN KUMAR SALUNKE Signing time: 06-02-2026 17:17:34 Signature Not Verified

5 ITA-87-2024 NEUTRAL CITATION NO. 2026:MPHC-JBP:10247 Signed by: TARUN KUMAR SALUNKE Signing time: 06-02-2026 17:17:34 Signature Not Verified

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