SURESH JAIN,OPPOSITE JAMA MASJID vs. AO, VIDISHA

Per Paresh M Joshi, J.M:

This is an appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ hereinafter referred to as the Act

for the sake of brevity] before this tribunal, as & by way of a

second appeal .The Assessee is aggrieved by the order

bearing No:-ITBA/NFAC/S/250/2023-24/1062489385(1)

dated 12.03.2024 passed by the Ld. CIT(A) u/s 250 of the

Act, which is hereinafter referred to as the “Impugned

order”. The Relevant Assessment year is 2012-13 and the corresponding previous year period is from 01.04.2011 to

31.03.2012.

2.1 That as and by way of an Assessment order dated

11.12.2019 made u/s 144 rws 147 of the Act, the total

income of the assessee was computed and assessed at Rs.

17,90,500/-. The total income as per the return of income

was at Rs. 6000/-. An addition of Rs. 17,84,500/- was

made by virtue of Para 6 of the aforesaid order . That the

aforesaid assessment order is dated 11.12.2019 of ITO

Vidisha, which is hereinafter referred to as the “Impugned

Assessment Order” for the sake of brevity. Further by way

of a letter dated 13.12.2019 a DIN bearing no: -

20121108609 was assigned to the “Impugned Assessment

Order”.

2.2 That the department of Income tax had an information

available with them that during the FY 2011-12 the assessee

had deposited cash amounting to Rs. 17,84,500/- in his saving bank account maintained with State Bank Of India

Murwas, Latteri Road, Vidisha. The cash so deposited in the

saving bank account could not be verified from the ITR.

Therefore due to the aforesaid fact it was decided to reopen

the case u/s 147 and a notice dated 148 was issued to the

assessee on 26.03.2019 and was served through email of

ITBA and speed post on the last known address available on

the records. That the assessee in response to the above

notice neither filed any return of income not filed any written

reply. Notice(s) u/s 142(1) dated 27.05.2019 and 24.10.2019

too were issued which remained non-compliant by the

assessee despite service on email and speed post. Even

notice u/s 144 dated 08.11.2019 for 18.11.2019 remained

as not compliant by the assessee despite service by email

and speed post. In brief the assessee was non-compliant to

all notice(s) as aforesaid consequently “Impugned

Assessment Order” was passed.

2.2 That the assessee being aggrieved by the aforesaid

“Impugned Assessment Order” prefers the first appeal u/s 246A of the act before the Ld. CIT (A) who by the

“Impugned Order” has dismissed the first appeal of the

assessee on the grounds and the reasons stated therein. The

core grounds and the reasons for the dismissal of the first

appeal were as under:-

“5. Decision: During the appellate proceedings,

notices for hearing were issued to the

appellant on 10.10.2023, 09.01.2024,

01.02.2024, and 19.02.2024. The appellant

has however not responded to any of the

notice.

It is clear that sufficient no. of opportunities

have been given to the appellant as above. In

fact the appellant was specifically informed in

notice dated 19.02.2024 that it will be last

opportunity. No response has been received by

the compliance date i.e. 01.03.2024 or

thereafter. Therefore, I proceed to decide the

appeal on the basis of records available.

5.1 In the statement of facts, the appellant has

claimed that he is an agriculturist and has

petty income through other sources. He had

agricultural income of Rs. 1,72,300/- during

the year. The cash deposits in SB Account No.

53033165377 represented agricultural receipts

and earlier cash withdrawals.

5.2 The appellant has made the claim of

agricultural income being the source of cash

deposits. However, no proof of having earned

any agricultural income is filed before the AO

or before NFAC. In the column 12 of Form 35,

the appellant has stated that he does not have

any documentary evidence to be produced as

additional evidence during appellate

proceedings. Also, no evidence is available in

support of appellant's claim that the cash

deposits were sourced from earlier cash

withdrawals. On the other hand, the AO obtained the bank statement, analysed it and

gave sufficient opportunity to the appellant to

present his side. Under the circumstances, the

claims made in the grounds of appeal cannot

be accepted. Ground Nos. 1 to 3 are therefore

held to be not sustainable.

2.3 That the assessee being aggrieved by the “Impugned

Order” has preferred the instant second appeal before this

tribunal and has raised the following grounds of appeal in

the form no. 36 against the “Impugned Order” which are as

under:-

“THE LEARNED COMMISSIONER OF INCOME TAX

(APPEALS) [CIT(A)] ERRED IN LAW AND ON

FACTS BY CONFIRMING THE ADDITION OF

1784500 ON ACCOUNT OF UNEXPLAINED CASH

DEPOSIT. FAILING TO APPRECIATE THAT THE

AMOUNT WAS GENUINELY RECEIVED FROM THE SALE OF AGRICULTURAL PRODUCE AND IS,

THEREFORE, EXEMPT FROM TAX. UNDER

SECTION 10(1) OF THE INCOME TAX ACT, 1961.

2 THE LEARNED CIT(A) OUGHT TO HAVE

ACCEPTED THE EXPLANATION OFFERED BY THE

APPELLANT. ESPECIALLY CONSIDERING THE

DOCUMENTARY EVIDENCE FILED, WHICH

ESTABLISHES THE EXISTENCE OF

SUBSTANTIAL AGRICULTURAL LAND HOLDINGS

CAPABLE OF GENERATING THE STATED INCOME

3 THE ADDITION MADE, AND SUBSEQUENTLY

CONFIRMED, IS ARBITRARY, EXCESSIVE, AND

NOT BASED ON ANY MATERIAL ON RECORD.

THE LEARNED CIT(A) ERRED IN NOT

ADEQUATELY CONSIDERING THE SURROUNDING

CIRCUMSTANCES AND THE ESTABLISHED

PRINCIPLE THAT INCOME DERIVED FROM

AGRICULTURAL LAND IS OUTSIDE THE PURVIEW OF THE INCOME TAX ACT, 1961, AND

THE REJECTION OF THE AGRICULTURAL

SOURCE WAS DONE WITHOUT BRINGING ANY

CONTRARY MATERIAL ON RECORD.

4 THE APPELLANT CRAVES LEAVE TO ADD,

ALTER, AMEND, OR SUBSTITUTE ANY OF THE

FOREGOING GROUNDS OF APPEAL L'EFORE OR

AT THE TIME OF THE HEARING.

5 APPELANT HOLDS 22 ACRL'S OF LAND IN HIS

NAME AND ON THE NAME OF MINOR CHIDREN

6 RIN PUSTIKA AND LAND RECORDS KHASRA

AND 6 MANDITAX RECEIPT WERE NOT

CONSIDRED BY LEARNED OFFICER”

3.1 The hearing in the matter took place before this Tribunal

on 21.10.2026 when the Ld. AR for & on behalf of the Assessee appeared before us and interalia contended that

the “Impugned Order” is bad in law, illegal and not proper.

It is in the violation of the principle of natural justice. It

therefore deserves to be set aside.

3.2 The Ld. AR has placed on the record of this tribunal a

paper book cum appeal memo pages 1 to 36 in support.

3.3 The Ld. AR then submitted that both the order of the

lower authorities i.e. the Ld. AO and the Ld. CIT (A) are ex-

parte in nature. The assessee is a farmer and illiterate

person. His authorised representative had died. There was

an in fact net deposit of Rs. 17, 90,000/- out of which Rs.

17.2 Lakhs were withdrawn by the assessee leaving net

amount of Rs. 60,000/-. Since the assessee lived in the rural

area and was illiterate being a farmer he remained non

participative throughout. Now his son is digitally literate and

sought a relief that “Impugned Order” should be set aside

and matter be remanded to the Ld. AO where the assessee

undertakes to the appear and further undertakes that all the

reply, information and material would now be furnished before the Ld. AO and no adjournment would be taken on

any flimsy grounds. The Ld. DR for the revenue relied upon

the orders of the lower authorities. The Hearing was then

over and closed.

4.1 We have to decide the legality, validity and proprietary of the

“impugned order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case & after hearing & further

upon examining the rival contentions of the Ld. AR & the Ld.

DR canvassed before us are of the considered opinion that

the “Impugned Assessment Order” is under section

144/144B of the Act and the matter has not been

adjudicated & adjudged basis merits. Even the “Impugned

Order” is not on merits. This tribunal desires that the total

income of the assessee should be computed and assessed on the real time basis exigible to tax in accordance with law by

following due process of law under the Act. This tribunal also

expects the assessee to be compliant and should cooperate

with the department as and when notices etc. are issued. In

brief this tribunal desires the meritorious disposal of the

both the “Impugned Assessment Order” as well as

“Impugned Order”. The assessee cooperation in this regard

assumes importance. The assessee cannot go in slumber

mode. In the result we are of the considered opinion that the

“Impugned Order” should be set aside and the matter

should be remanded back to the file of the Ld. AO for passing

a fresh order on merits of the case. It is the expectation of

this tribunal that the assessee would give his full and

complete details including latest emails of his and his

counsel where the notices could be served effectively by the

department. The assessee to attend hearings as and when

fixed and file reply and details as sought by the Ld. AO.

4.4 In view of the above, we set aside the “Impugned Order”

and remand the case back to the file of the Ld. AO on de novo basis who shall now pass a speaking and well-reasoned

order.

5 Order

5.1 In the result Impugned Order is set aside as and by way of

remand back to the file of the Ld. AO on de novo basis.

5.2 The appeal of the Assessee is allowed for statistical

purpose.

Pronounced in open court on 30.10.2026.

Sd/- Sd/- (ARVIND SONI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 30/10/2026

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File Akhilesh Kumar Digitally signed by Akhilesh Kumar Date: 2026.11.02 17:30:28 +05'30' By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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