INCOME TAX OFFICER WARD-3(4) CHAIBASA, CHAIBASA vs. RISHABH RAJ JHUNJHUNWALA, CHAKRADHARPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER AND SMT. RAJANI GUDURI, JUDICIAL MEMBER I.T.A. No. 302/RAN/2026 (Assessment Year: 2018-19) (Physical Hearing) I.T.O., Rishabh Raj Jhunjhunwala, Ward 3(4), C/o- Natwar Jhunjhunwala, Ward Vs. Chaibasa. No. 7, Chakradharpur, West Singhbhum, Chakradharpur-833102 (Jharkhand) PAN No. AZOPJ 7799 N Appellant/ Revenue Respondent/ Assessee

Department represented by Shri Sandipan Khan, Sr.DR Assessee represented by Shri Aditya Shah, C.A. Date of hearing 08/10/2026 Date of pronouncement 14/10/2026

O R D E R PER: BENCH 1. This appeal by the revenue is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short, the ld. CIT(A) dated 15/01/2026 for the Assessment Year (AY) 2018-19. 2. Facts of the case, in brief, are that the assessee has filed his return of income for the assessment year under consideration on 31/03/2019 declaring total income at ₹ 2,40,000/-. The case was, thereafter, selected for scrutiny under e-assessment scheme, 2019. On the basis of the information received by the Assessing Officer that the assessee has received accommodation entries in the name of bogus loans amounting to ₹ 4,00,031/- from one Shri Mukesh Banka

I.T.A. No. 302/RAN/2026 ITO Vs Rishabh Raj Jhunjhunwala of M/s Banka Group, the key person/controlling person, who, in his statement recorded under Section 132(4) of the Income Tax Act, 1961 (in short, the Act), has stated that the company controls and managed by him, was a paper/shell company and have no actual business activities and only getting interest income under the head 'other income' for providing bogus loans to different beneficiaries. Accordingly, the case of the assessee was reopened for assessment under Section 147 of the Act and notice under Section 148 of the Act was issued on 30/03/2021. In response to which, the assessee filed return of income on 27/01/2022 declaring same income of ₹ 2,40,000/-. Subsequently, notice under Section 143(2) of the Act was issued on 14/02/2022 and thereafter notices under Section 142(1) of the Act were issued from time to time alongwith questionnaire. However, the assessee did not give any detail of the loan he had received from other entities amounting to ₹ 4,00,031/- from said Banka group, who was alleged to be indulged into giving bogus loans. The Assessing Officer, therefore, added a sum of ₹ 4,00,031/- under Section 69A of the Act and taxed the same under Section 115BBE of the Act on the ground that the assessee has failed to give any explanation to explain the genuineness of the loans taken. 3. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT(A), who vide the impugned order dated 15/01/2026, allowed the appeal of the assessee on the ground that the appellant has denied to have received any unsecured loan of ₹ 4,00,031/- from Sh. Mukesh Banka. The onus then shifted to Assessing Officer to establish that the appellant has actually received unsecured loan from him. However, the

I.T.A. No. 302/RAN/2026 ITO Vs Rishabh Raj Jhunjhunwala Assessing Officer has failed to do so and therefore, the said addition can’t be sustained on account of bogus loan. 4. Further aggrieved by the order of the ld. CIT(A), the revenue is in appeal before this Tribunal. 5. During the appellate proceedings before us, the ld. Sr. DR submitted that during the course of assessment proceedings the assessee neither appeared before the Assessing Officer nor has filed any written submission before him that he has not received any loan of ₹ 4,00,031/- from Sh. Mukesh Banka, who was alleged to have been given the assessee the said loans. 6. The ld. Authorised Representative of the assessee, on the other hand, filed a written submission as under: "The assessee had filed their original Return of Income for AY 2018-19 on March 31, 2019, declaring a total income of Rs. 2,40,000/-. The case was subsequently reopened under Section 147 of the Income-tax Act, 1961, based on information alleging receipt of accommodation entries in the form of bogus unsecured loans amounting to Rs. 4,00,031/- from M/s. Banka Group. The Assessing Officer (AO) passed an assessment order on March 24, 2022, adding Rs. 4,00,031/- as unexplained money under Section 69A, assessing the total income at Rs. 6,40,031/. The CIT (Appeal) deleted the addition both on the validity of jurisdiction as well as on merits since the AO relied on general information and bank statements did not show any receipt. Further, AO failed to establish how the money was received by the assessee. 2. Validity of Reassessment Proceedings (Section 147/148): It is submitted that the reassessment proceedings initiated by the issuance of notice under Section 148 dated March 30, 2021, were fundamentally flawed and bad in law. The reasons recorded for reopening the assessment were:  Vague and Lacking Specificity: The reasons were undated, unsigned, and lacked specific details regarding the source of information, date of receipt, or any inquiries conducted by the AO prior to issuing the notice.

I.T.A. No. 302/RAN/2026 ITO Vs Rishabh Raj Jhunjhunwala There was no intelligible nexus between the information and the alleged escapement of income.  Absence of Tangible Material: The information relied upon, specifically the statements from Shri Mukesh Banka dated May 30, 2018, and July 19, 2018, predated the time limit for issuing a notice under Section 143(2). This material cannot be considered 'new tangible material warranting a reopening, as it was available to the department much earlier. Reopening cannot be based on mere suspicion or a change of opinion. 3. Challenge to the Addition under Section 69A: Without prejudice to the arguments on the invalidity of reassessment, the addition of Rs. 4,00,031/-as unexplained money under Section 69A is unsustainable on merits:  Denial of Receipt of Loan: The assessee vehemently denies receiving any alleged unsecured loan of Rs. 4,00,031/- from M/s. Banka Group. This denial is substantiated by the bank statements which clearly demonstrate that no such transaction occurred in the assessee's bank account. The same is part of CIT (A) order also.  Lack of Opportunity for Cross-Examination: The AO relied solely on the statements of Shri Mukesh Banka without providing the assessee an opportunity to cross-examine him. This constitutes a grave violation of the principles of natural justice, as enshrined in various judicial pronouncements. An adverse inference cannot be drawn against the assessee without allowing them to confront the source of the adverse information.  No Evidence of Unexplained Money: Section 69A applies when the assessee is found to be the owner of any money, bullion, jewellery, or other valuable article not recorded in the books of account, and the assessee offers no explanation or an unsatisfactory explanation. In the present case, the assessee has denied the receipt of money and provided bank statements as evidence, thus discharging the initial burden. The department has failed to bring on record any concrete evidence to prove that the assessee was indeed the owner of such unexplained money. 4. Judicial Precedents:

I.T.A. No. 302/RAN/2026 ITO Vs Rishabh Raj Jhunjhunwala The assessee reiterates reliance on established judicial pronouncements, such as ITO v. Lakhmani Mewal Das (1976) 103 ITR 437 (SC) and Hindustan Lever Ltd. v. R.B. Wadkar (2004) 137 Taxman 479 (Bom), which emphasize that reasons for reopening must be clear, unambiguous, based on tangible material, and not on mere suspicion or a change of opinion. The principles laid down in these cases are directly applicable to the facts of the present case, where the reopening was initiated without fulfilling the statutory requirements. 5. Prayer In light of the foregoing submissions, it is respectfully prayed that your Honours may be pleased to:  Uphold the order of the Ld. Commissioner of Income-tax (Appeals) to the extent it provides relief to the assessee.  Dismiss the appeal filed by the Revenue.  Delete the unsustainable addition of Rs. 4,00,031/- made under Section 69A of the Act.  Grant any other relief as deemed fit in the interest of justice." 7. We have considered the rival submissions and we find that the Assessing Officer has failed to bring out any evidence or material on the basis of which it can be concluded that the assessee has received bogus loan of ₹ 4,00,031/- from Shri Mukesh Banka. In the absence of any material on record brought out by the Assessing Officer, no addition can be made under Section 69A of the Act. We therefore, hold that the ld. CIT(A) was right in deleting the said addition and we uphold the same. 8. In the result, appeal of the revenue stands dismissed. Order pronounced in open court on 14/10/2026.

Sd/- Sd/- (RAJANI GUDURI) (RATNESH NANDAN SAHAY) JUDICIAL MEMBER ACCOUNTANT MEMBER Ranchi, Dated:14/10/2026 *Ranjan

I.T.A. No. 302/RAN/2026 ITO Vs Rishabh Raj Jhunjhunwala Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File

Sr. Private Secretary, ITAT, Ranchi