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Facts
The assessee, Govindji Gagaji Dabhi, challenged the CIT(A)'s order for AY 2017-18, which confirmed additions totaling Rs. 64,18,592/- under Section 69A for various cash deposits and credit entries. The appeal also contested the 60% tax rate applied under Section 115BBE and the initiation of penalty proceedings under Sections 271AAC(1) and 272A(1)(d), as the assessee failed to explain the source of the deposits.
Held
The Tribunal noted the assessee's repeated failure to provide supporting evidence or explanations for the cash deposits despite opportunities. Consequently, the case was remanded to the Assessing Officer for a de-novo assessment, with a cost of Rs. 2,000/- imposed on the assessee, to be deposited into the "Prime Minister Relief Fund." The assessee was directed to cooperate fully with the AO.
Key Issues
The key legal issues involve the validity of additions under Section 69A for unexplained cash deposits and credit entries, the correct tax rate applicable under Section 115BBE, and the appropriateness of penalty proceedings under Sections 271AAC(1) and 272A(1)(d) of the Income Tax Act.
Sections Cited
69A, 115BBE, 271AAC(1), 272A(1)(d)
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
[PAN :AYDPD1563 A] (Appellant) .. (Respondent) Appellant by : Ms Vidhi V Pandya, AR Respondent by: Shri Hargovind Singh , Sr. DR Date of Hearing 29.07.2025 Date of Pronouncement 30.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 14.02.2026 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18.
The assessee has raised the following grounds of appeal:
1. Addition of Rs. 16,71,500/- u/s 69A on the basis of cash deposits during the Demonetization period in the bank account of the Income Tax Act.
Govindji Gagaji Dabhi Vs. ITO Asst. Year : 2017-18 - 2– On facts and in the circumstances of the case and in law, Ld. CTT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 16,71,500/-on account of cash deposits u/s 69A of the Income Tax Act. 2 Addition of Rs. 44,27,000/- u/s 69A on the basis of cash deposits (other than Demonetization period) during the Year in the bank account of the Income Tax Act. On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 44,27,000/- on account of cash deposits (other than Demonetization period) u/s 69A of the Income Tax Act.
Addition of Rs. 3,20,092/-u/s 69A on the basis of credit entries (other than cash deposit) in the bank accounts of the Income Tax Act. On facts and in the circumstances of the case and in law, Ld. CIT(A) by confirming the order passed by the Ld. AO has grossly erred in making addition of Rs. 3,20,092/-on account of credit deposits u/s 69A of the Income Tax Act.
The Ld. AO passed order calculating tax @60% as per section 115BBE of the Income Tax Act: On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in calculating tax @60% as per section 115BBE of the Income Tax Act for AY 2017-18. The tax rate for the AY 2017-18 was 30% as per section 115BBE of the Income tax act.
Initiating penalty proceeding u/s 271AAC(1) of the Act On facts and in the circumstances of the case and in law, the Ld. AD has grossly erred in initiating the proceedings for levy of penalty u/s 271AAC(1) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated.
Initiating penalty proceeding u/s 272A[1](d) of the Act. On facts and in the circumstances of the case and in law, the Ld. AO has grossly erred in initiating the proceedings for levy of penalty u/s. Govindji Gagaji Dabhi Vs. ITO Asst. Year : 2017-18 - 3– 272A(1)(d) of the Act when no such penalty is leviable. The proceedings initiated by the Ld. AO should be dropped as it is wrongly initiated. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any grounds of appeal at the time of or before the hearing of the appeal. I, Govindji Gagaji Dabhi, do hereby declare that what is stated above is true to the best of my information and belief.
3. On going through the record, we find that assessee was accorded sufficient opportunities to submit certain details/clarification/ explanation regarding the source of cash deposits. In pursuance of the same, the assessee failed to submit any submission/documents and accordingly, the Ld.CIT(A) dismissed the appeal of the assessee based on the material available on record. We also find that the assessee even failed to submit any details/supporting evidence to prove the source of the cash deposit before the Assessing Officer. The Ld. Counsel for the assessee prayed that, given an opportunity, all the details/clarification/explanation would be provided to the revenue authorities. Hence, in the interest of justice the matter is remanded to the Assessing Officer for conducting assessment de-novo and a cost of Rs.2,000/- imposed on the assessee. The amount should be deposited into “Prime Minister Relief Fund” and the receipt shall be submitted before the JAO, who shall take it on record before passing the order giving effect to the order of the ITAT. The assessee shall submit all the relevant bank statement/submission/document before the Assessing Officer and comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.
The order is pronounced in the open Court on 30.07.2025.
Sd/- Sd/- (T.R SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 30.07.2025 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy