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Facts
The assessee, an agriculturist, failed to file his return of income. Information regarding a cash deposit of Rs. 52,40,000/- in his bank account was flagged. The AO made an addition of this amount as unexplained cash deposit. The CIT(A) confirmed the addition. The assessee claims he only deposited Rs. 13,40,000/- and the difference is erroneous.
Held
The Tribunal noted that the assessee was ex-parte before the AO and CIT(A) and had failed to present his case adequately. To provide an opportunity for a fair hearing, the matter was restored to the file of the AO for fresh adjudication.
Key Issues
Whether the addition of Rs. 52,40,000/- as unexplained cash deposit is justified, and whether the assessee should be granted an opportunity to present his case before the AO.
Sections Cited
147, 148, 144, 234A, 234B, 234C, 271(1)(b), 271(1)(c), 271F, 139(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’B” JAIPUR
ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated 02.01.2025 for the assessment year 2015-16 raising therein following grounds of appeal. ‘’1. On the Facts and Circumstances of the case and in the law the CIT(A) has grossly erred in confirming the Total Income of assessee amounting to Rs. 52,40,000/- Such Computation of Total income is Invalid as well as illogical in law and Deserves to be Quashed.
1. SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR 2. On the Facts and Circumstances of the case and the law the CIT(A) has further erred in confirming the action of AO in form of making the addition amounting to Rs. 52,40,000/- to the total income of the assesse. Such action s incorrect as well as bad in law hence deserves to be quashed.
3. On facts and in circumstances CIT (A) has grossly erred in levy of interest u/s 234A/B/C of the Income Tax Act, 1961 which deserves to be quashed.
4. On facts and in circumstances CIT (A) has grossly erred in initiating penal provisions u/s 271(1)(b), 271(1)(c) & 271F of the Income Tax Act, 1961 which deserves to be quashed.
2.1 At the outset of the hearing of the appeal, it is noticed that the ld.CIT(A) passed an ex-parte order by dismissing the appeal of the assessee on the ground that the assessee failed to furnish any reply/documentary evidences in respect of its appeal filed before him. The narration so made by the ld.CIT(A) in his appeal order is reproduced as under:- ‘’6 I have considered the assessment order, Statement of Facts submitted by the appellant along with Form 35 and the material on record and find that the AO has given complete reasoning in the assessment order for making the addition of Rs. 52,40,000/- on the account of unexplained cash deposits for the Financial Year 2014-15 relevant to Assessment Year 2015-16. As per the assessment order, the appellant had deposited cash of Rs 52,40,000/- in his saving bank account maintained with Indian Bank during the FY 2014-15. As per the AO, during assessment proceedings, the appellant had failed to give any explanation about thenature and source of the above said cash deposits despite, hence the same remained unexplained in the SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR hand of the appellant for the tax purposes. Therefore, the Ld. AO made the additions of cash deposits i.e. Rs 52,40,000/- on account of unexplained cash deposits under the provision of the IT Act 1961 for the relevant assessment year 6.1 Even during the appellate proceedings, the appellant failed to furnish any reply/documentary evidences in respect of its appeal filed. Despite being provided ample opportunities in the appellate proceedings, the appellant could not file any reply/evidences but only adjournment filed. In the absence of any reply/evidence, I hereby confirm the addition of Rs. 52,40,000/- on account of unexplained cash deposits under the provision of the IT Act 1961, made by the A.O in the assessment order as discussed above. Hence the appeal is not allowed 7 As a result, the appeal of the appellant is not allowed.’’ 2.2 During the course of hearing, the ld. AR of assessee mainly submitted that this case may be restored to the file of the AO for proper examination of the facts and to allow the assessee a fair opportunity to present his case. The written submission as advanced by the ld. AR of the assessee before us is reproduced as under:- ‘’Written Submissions Brief facts of the case:- 1. The appellant aged 46 is an agriculturist residing at Meeno Ka Mohalla, Khore Shyamdas, Jaipur.
SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR 2. For the relevant assessment year the assessee could not file his return of income.
During the relevant assessment year, specific information was flagged as per Risk Management Strategy formulated by the CBDT through ITBA software under the head 'NMS cases' for the assessee As per the specific information, the assessee deposited a sum of Rs. 52,40,000/- in cash into his bank account held with the State Bank of Bikaner & Jaipur (i.e. SBBJ) (now State Bank of India).
Since the assessee is an agriculturist not well versed with the procedures of income department, use of technology, had never filed a return of income and the mail ID mentioned on the portal also belonged to his carlier counsel hence the assessee remained unaware about the initiation of assessment proceedings against him.
Later, since there was no response from the side of the assessee and AO decided the matter ex-parte under section 144 r.w.s. 147 of the IncomeTax Act, 1961 (hereinafter referred to as Act) on 14.03.23.
Further on similar grounds the case was also decided by Id. CIT(A) on 02.01.25 as no response could be furnished by the erstwhile counsel of the assessee.
Thereafter, the assessee being disheartened by the negligence as well as lack of proper response on the part of previous counsel subsequently filed an appeal in front of the Hon'ble ITAT, Jaipur Bench 8. Hence, being aggrieved by the order of AO and later by the order of ld. CIT(A), the assessee preferred an appeal on the following grounds which may please be allowed by the Hon'ble ITAT, Jaipur bench in the event natural justice and providing the assessee an opportunity to present his side of the facts of the case. Humble Submission Ground No.
1. On the facts and circumstances of the case and in the law the CIT(A) hasgrossly erred in confirming the total income of assessee amounting to Rs. 52,40,000/- Such Computation of Total Income is invalid as well as illogical in law and deserves to be quashed. Ground No.
2. On the facts and circumstances of the case and the law the Ld. CIT(A) has further erred in confirming the action of AO in form of making the addition SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR amounting to Rs. 52,40,000/- to the total income of the assessee. Such action is incorrect as well as bad in law hence deserves to be quashed. Ground No. 3 On facts and in circumstance CIT(A) has grossly erred in levy of interest u/s 234A/B/C of the Income Tax Act, 1961 which deserves to be quashed. Ground No. 4 On facts and in circumstance CIT(A) has grosslyerred in initiating penal provisions u/s 271(1)(b), 271(1)(c) & 271F of the Income Tax Act, 1961 which deserves to be quashed. Since the above ground of appeals are similar in nature hence pressed together. The grounds raised in the memorandum of appeal pertain to the incorrect addition of Rs. 52,40,000/- to the total income of the assessee on account of alleged unexplained cash deposits in the assessee's bank account maintained with the SBBJ. In this regard the assessee wishes to humbly submit that the assessee maintained only one bank account with SBBJ having account no 61227480916. During the relevant assessment year the assessee deposited a sum of Rs. 13,40,000/- in the above-mentioned bank account instead of Rs. 52,40,000/- as alleged to be deposited as per the assessment order passed by the AO.
The assessee is also attaching the copy of his bank statement for the relevant previous year i.e. from 01.04.14 to 31.03.15 which may please be accepted as additional evidence under rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. Therefore, the difference of ₹39,00,000/- as per the assessment order passed by the AO, did not belong to the assessee and the assessee has no clue as to where this amount has been considered by the AO. Further the order of the AO also did not mention the bank account number from which the assessee could trace such amount of ₹ 39,00,00/-, Hence, such order passed by the AO and further confirmed by the Id. CIT(A) is erroneous, invalid and incorrect in law hence deserves to be quashed. In addition to the above, the assessee further wishes to submit the proof of Rs. 13,40,000/- deposited in his bank account no 61227480916 maintained with SBBJ SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR As already mentioned above that the assessee was an agriculturist hence the amount deposited in his bank account were the proceeds from sale of his agricultural produce in the local market. In support of this the assessee wishes to submit copy of his Girdawari duly sealed and signed by the Tehsildar clearly depicting the land owned by the assessee which may please be considered as additional evidence under rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963. Therefore, the addition of ₹ 13,40,000/- to the total income of the assessee deserves to be quashed. In light of the above, the assessee respectfully prays that if the Hon'ble Tribunal deems fit then the case may please be restored to the file of the Assessing Officer (AO) for proper examination of the facts and to allow the assessee a fair opportunity to present his case.’’ 2.3 On the other hand, the ld.DR supported the order of the ld. CIT(A).
2.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the no return of income was filed by the assessee u/s 139(1) of the Act. Subsequently, on possession of information by the Department regarding cash deposited in bank accounts during the year by the assessee, necessary reasons were recorded and after obtaining approval of Pr. PCIT, Rajasthan, Jaipur on 28-03-2022, the case was reopened and notice u/s 148 of the Act was issued on 29-03-2022 which was served through Regd. Post and the assessee was required to furnish return of income within the stipulated time but the compliance of the same was not made. It is noted that the AO completed the assessment in spite of affording opportunity to the assessee to explain the source of cash deposited / cash transactions amounting to SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR Rs.52,40,000/-. However the assessee did not furnish the reply and thus the AO has no option except to complete the assessment u/s 144 of the Act by considering the material available before him and he made addition of Rs.52,40,000/- by observing as under:- ‘’3. As per information available on record, during the year under consideration, the assessee has deposited cash of Rs.52,40,000/- in his saving bank a/c maintained but failed to explain the source of such amount deposited in cash in his bank account the assessee has not made any compliances of the notices issued during the course of assessment proceedings. As no explanation regarding the cash deposits of Rs.52,40,000/- appearing in his bank account, has been offered and not have furnished any documentary evidence regarding source of the cash deposits. Therefore, considering the facts, the total cash deposits of Rs.52,40,000/- is treated as unexplained cash deposits and is added to the total income of the assessee.
4. Assessed at total income of Rs.52,40,000/-. Charged interest u/s 234A, 234B and 234C of the I.T. Act. Issued necessary forms and challans. (i) Penalty proceedings u/s 271(1)(b) for non-compliance of the notices issued and (ii) for concealment of income,penalty proceedings u/s271(1)(c) and (iii)as the assessee has not filed his return of income for the relevant assessment year, therefore penalty proceedings u/s 271F are initiated separately and notices are issued accordingly.’’ SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR In first appeal, the ld.CIT(A) has confirmed the action of the AO as the assessee failed to furnish any reply/ documentary evidence in respect of its appeal filed before him despite providing ample opportunities to the assessee.Since it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. CIT(A). Therefore, he could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case. However, we are of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes.
2.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any SHRI BHAGWAN SAHAY MEENA VS ITO, WARD 7(1), JAIPUR reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. 3.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 08 /09/2025.
Sd/- Sd/- ¼ jkBkSM+ deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08/09/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant-Shri Bhagwan Sahay Meena, Jaipur 2. izR;FkhZ@ The Respondent- The ITO, Ward 7(2), Jaipur 3. vk;djvk;qDr@Theld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File ( By order,
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