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Facts
For Assessment Year 2019-20, the appellant, a construction businessman, did not file a regular return of income. Based on information of cash deposits totaling Rs. 39,86,000/- in bank accounts, the AO initiated reassessment under Section 148, subsequently treating these deposits as unexplained money and bringing them to tax, which was confirmed by the CIT(A).
Held
The Tribunal acknowledged the appellant's failure to respond to AO's notices but considered the stated reason (Kerala floods affecting business receipts). Finding it a fit case, the Tribunal remanded the matter back to the AO for a de novo assessment, requiring that the appellant be given a reasonable opportunity of hearing.
Key Issues
Whether the cash deposits treated as unexplained money by the AO should be remanded for a fresh assessment, considering the appellant's reasons for non-compliance with notices during the original assessment proceedings.
Sections Cited
139(1), 148, 147, 144B
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Year: 2019-20 Rajesh Sivan .......... Appellant Adhibhavan, Thrikkakara S.O., Ernakulam [PAN: BANPS8167A] vs. The Income Tax Officer, WD-1 & TPS, Kannur .......... Respondent Assessee by: Shri Lukose Joseph, CA Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 29.10.2025 Date of Pronouncement: 24.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 18.07.2025 for Assessment Year (AY) 2019-20.
Brief facts of the case are that the appellant is an individual engaged in the business of construction of residential houses. No regular return of income under the provisions of section 139(1) of the Income Tax Act, 1961 (the Act) was filed for AY 2019-20 by the appellant. Based on the information that the appellant had made deposits in Bank of Baroda and Federal Bank aggregating to Rs. 39,86,000/- , the AO issued a notice u/s. 148 of the Act, 1961 (the Rajesh Sivan Act) 29.03.2023. In response to notice u/s. 148, the appellant filed return of income on 28.04.2023 declaring total income of Rs. 6,12,020/-. Against the said return of income, the assessment was completed by the Assessment Unit of Income Tax Department (hereinafter called "the AO") vide order dated 14.02.2024 passed u/s. 147 r.w.s. 144B of the Act at total income of Rs. 45,98,020/-. While doing so, the AO treated the cash deposits in the bank accounts of Rs. 39,86,000/- as unexplained money of the appellant and brought to tax the same.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The learned counsel for the assessee submits that the cash deposits made in the bank accounts were out of the gross revenue of business receipts of the appellant. The business receipts are duly accounts in the books of account and, therefore, the AO was not justified in treating the cash deposits as unexplained money of the appellant. It is further submitted that the appellant could not reply to the notices issued by the AO for the reason that the business receipts of the appellant were severely affected by the flood in Kerala.
I heard the rival contentions and perused the material available on record. The AO had treated the cash deposits in the bank accounts as unexplained money of the appellant for the failure of the appellant to discharge the onus of proving the source of cash deposits. It is undisputed fact that the appellant had failed to respond to the notices issued by the AO. However, having regard to the reasons given for non compliance of the notices by the assessing authorities, I am satisfied that it is a fit case to remand the matter back to the file of the AO for de novo assessment in accordance with law after affording reasonable opportunity of hearing to the appellant.
In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 24th November, 2025.