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Facts
The assessee, an educational trust, failed to file its return for AY 2017-18. The AO discovered cash deposits of Rs. 11.80 lakhs during demonetization and other deposits of Rs. 5.38 lakhs, which the assessee failed to explain despite notices. Consequently, the AO completed an ex-parte assessment under Section 144, adding these amounts under Section 69A, and the NFAC dismissed the assessee's appeal without admitting additional evidence.
Held
The Tribunal set aside the NFAC's order and restored the case to the Assessing Officer. The AO is directed to provide the assessee a fresh opportunity to present its case and admit all evidence. The assessee was cautioned to cooperate with the AO, failing which an ex-parte order could be passed again.
Key Issues
1. Whether the ex-parte assessment and additions for unexplained cash and other deposits were justified given the assessee's status as an educational institution. 2. Whether the NFAC erred in not admitting additional evidence under Rule 46A.
Sections Cited
133(6), 69A, 144, 115BBE, 272AAC, 272A(2)(e), 10(23C)(iiiad), Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Sri Ram Janki Educational v. The Assessing Officer Charitable Trust (Exemption) Ram Nagar, Amawasufi Lucknow Faizabad (U.P) TAN/PAN:AAMTS3887K (Appellant) (Respondent) Appellant by: None Respondent by: Shri R.R.N. Shukla, D.R. O R D E R
This appeal has been preferred by the Assessee against the order dated 24.06.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.
2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had deposited Rs.11,80,000/- during the demonetization period in its bank accounts No.55070100023953 and 55070100021837 maintained with the Baroda Uttar Pradesh Gramin Bank, Faizabad. The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to furnish the details of source of cash deposits. However, the assessee failed to file any reply to the notices issued by the AO. The AO, thereafter, issued notice under section 133(6) of the Income Tax Act, 1961 (hereinafter called “the Act’) to the Baroda Uttar Pradesh Gramin Bank, Faizabad and obtained statements of bank accounts of the assessee, which evidenced that the assessee had made cash deposits of Rs.11,80,000/- during the demonetization period, which was treated as unexplained money of the assessee and was added to the income of the assessee under section 69A of the Act.
2.1 The AO further noticed from the statements of bank accounts of the assessee that the assessee had made cumulative deposits of Rs.5,38,234/- other than cash deposits during the year under consideration. Since there was no response from the side of the assessee to the notices issued by the AO in this regard also, the AO treated the same as unexplained money of the assessee and added the same to the income of the assessee.
2.2 The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.17,18,230/-.
2.3 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 272AAC and 272A(2)(e) of the Act, separately.
2.4 Aggrieved, the Assessee preferred an appeal before the NFAC and filed additional evidence. However, the NFAC, without admitting the additional evidence filed by the assessee, dismissed the appeal of the assessee and confirmed the order of the AO.
2.5 Now, the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:
1. Because the Appellate Order dated 24.06.2025 passed by CIT (A), NFAC, Delhi is contrary to Facts. Law and Circumstances of the case and without looking into the merits of addition made of Rs.17,18,230/- and also upholding the framing of assessment u/s 144 of the Act. The appellate order passed by Ld. CIT (A) is liable to be set-aside.
2. Because the Ld. CIT (A) has erred in not admitting the application under Rule 46A presented before him without looking into the merits of the case. The application under Rule 46A is liable to be allowed under the Facts, Law and Circumstances of the case.
Because the Ld. CIT (A) has erred in confirming addition of Rs.11,80,000/-made under the provision of section 69A of the Income Tax Act 1961 being cash deposits in Bank Accounts of the appellant during the year under consideration from exempt income of the appellant u/s 10(23C)(iiiad) being an educational institution. The addition of Rs.11,80,000/- is liable to be deleted.
Because the Ld. CIT (A) has erred in confirming addition of Rs.5,38,234/-made under the provision of section 69A of the Income Tax Act 1961 being deposits other than cash in Bank Accounts of the appellant during the year under consideration from exempt income of the appellant u/s 10(23C)(iiiad) being an educational institution. The addition of Rs.5,38,234/- is liable to be deleted.
5. Any other ground raised at the time of the hearing of the appeal in accordance with the law. 3.0 None was present for the assessee when the appeal was called out for hearing. However, an application dated 15.10.2025 of the Counsel, seeking adjournment was placed before me citing the reason that he is in the process of collecting relevant information for submitting the paper book and, therefore, the case may be adjourned. However, looking into facts of the case, I reject the adjournment application and proceed to adjudicate the appeal.
4.0 Since the order passed by the AO was under section 144 of the Act and the NFAC had dismissed assessee’s appeal without admitting the additional evidence filed by the assessee, the Ld. Sr. D.R. has no objection to the restoration of appeal to the file of the Assessing Officer.
5.0 I have heard the Ld. Sr. D.R. and have also perused the material on record. It is evident that the order passed by the AO is ex-parte qua the assessee and the Ld. First Appellate Authority has dismissed the appeal of the assessee without admitting the additional evidence filed by the assessee. Looking into the facts of this case, I am of the considered view that the assessee deserves one more opportunity to present its case and, therefore, I set aside the order of the NFAC and restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the assessee to present its case. The AO is also directed to admit whatever evidences assessee wants submit before him. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.
6.0 In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 31/10/2025.