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Facts
The assessee, an individual and an agent for LIC and New India Insurance Company, filed his return of income showing a total income of Rs. 2,88,040. The assessment was completed at Rs. 18,96,820, making additions for unexplained deposits and undisclosed bank interest. The assessee's appeal before the CIT(A) was partly allowed.
Held
The Tribunal condoned the delay of 90 days in filing the appeal. Upon reviewing the case, the Tribunal found that the CIT(A) did not properly consider the evidence submitted by the assessee and passed the order without applying his mind. Therefore, to ensure natural justice, the matter was remitted back to the CIT(A) for fresh disposal.
Key Issues
Whether the CIT(A) erred in sustaining additions on account of unexplained deposits and undisclosed interest income without properly considering the evidence? Whether the case should be remitted back to the CIT(A) for fresh consideration?
Sections Cited
143(1), 143(3), 143(2), 142(1), 68, 271(1)(c), 69A
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Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2015-2016 Anil Kumar Sah,………………………....….………Appellant Near Bari Durga Mandir, Kajreli Road, Amarpur, Dist. Banka-813101, Bihar [PAN:AQGPS8735A] -Vs.- Income Tax Officer,………………………...…….Respondent Ward-1(4), Bhagalpur, Office of the Income Tax Officer, R.N. Plaza, R B S S Road, Bhagalpur-812001, Bihar Appearances by: Shri Rakesh Kumar, Advocate, appeared on behalf of the assessee Shri Ashwani Kr. Singal, JCIT, appeared on behalf of the Revenue Date of concluding the hearing: June 16, 2025 Date of pronouncing the order: August 29, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 12th June 2023 passed for Assessment Year 2015-16.
(A.Y. 2015-2016) Anil Kumar Sah 2. The appeal is time barred by 90 days in filing the appeal by the assessee. However, the assessee filed a condonation petition before the ITAT in support of condonation of delay of 90 days mentioning that the delay occurred due to miscommunication of uploading order either on the registered email or registered mobile no. He further submitted that the assessee was not aware of the date of hearing before the ld. CIT(Appeals) and the order passed by the ld. CIT(Appeals). When the assessee came to know about the order passed by the ld. CIT(Appeals), the assessee approached the ld. A.R. to prefer an appeal, due to that there was a delay of 90 days in filing the appeal before the Tribunal. Therefore, he pleaded to condone the delay.
Considering the facts and circumstances of the case, I am of the view that the assessee was prevented in filing the appeal within the stipulated time. Therefore, I am inclined to condone the delay of 90 days. Hence the delay is condoned.
Brief facts of the case are that the assessee is an individual, who filed his return of income on 10.12.2015 showing total income of Rs.2.88,040/-. The assessee has shown his income from LIC commission, New India Insurance Company & interest income. The return was processed u/s 143(1) of the I.T Act. 1961. Later the case was selected for Limited Scrutiny assessment through Computer Assisted Selection of Cases (CASS) Program. Accordingly, statutory notices u/s 143(21 &. 142(1) of the I. T. Act. 1961 were issued and served upon the assessee. In response to departmental notices, ld. AR of assessee appeared from time to (A.Y. 2015-2016) Anil Kumar Sah time and produced the documents, which were examined. As per the direction of the CASS Selection, it is found that the cash deposit in saving hank account is more than the turnover. During the course of assessment proceedings, the assessee was asked to furnish the documents in support of income shown in the return. In response the assessee produced Bank statement of SBI, Amarpur only. It is found from the record that the assessee is a commission agent of LIC & New India Insurance Co. Ltd. agent and an authorized agent for collecting premium from parties on behalf of LIC of India. In this regard assessee has furnished a letter of authorization issued by LIC of India to collect the premium amount from different person on behalf of LIC of India for which assessee is getting commission from LIC of India. The deposits made in Stale Bank of India Savings Bank Account, Amarpur Branch, was cross examined. The assessee collected the money of LIC premium from different persons and deposited them in his State Bank India Savings Bank Account, Amarpur Branch and later on, the assessee paid the premium amount in the account of LIC of India for premium payment on behalf of those persons from whom he had collected the premium amount. During the course of hearing proceeding, some anomalies were found. In this regard a show cause letter dated 13.07.2017 was issued to the assessee to explain the anomalies but no compliance was made in this regard by the assessee. The assessee submitted that he deposited the amount of Rs.1,13,85,417/- to the Bank Account and paid premium of Rs.1,00,21,644/- only. The assessee was asked to explain the excess deposit made in the SBI Account, but no compliance was made in this regard by the assessee. Hence, excess (A.Y. 2015-2016) Anil Kumar Sah amount of deposit in SBI amounting to Rs.13,63,773/- (Rs.1,13,85,417/- minus Rs.1,00,21,644/-) was treated as unexplained and added to the total income of the assessee. The assessee also deposited cash of Rs.1,68,000/- and cheque of Rs.38,932/- totalling to Rs.2,06,932/- in Bihar Gramin Bank SB Account. Getting no response from the side of assessee, the ld. Assessing Officer treated the amount as unexplained and added to the total income of the assessee. Finally, ld. Assessing Officer determined the total taxable income of the assessee at Rs.18,96,820/- [(returned income Rs.2,88,040/-, addition of Rs.15,70,705/- under section 68, (i.e. Rs.13,63,773/- plus Rs.2,06,932/-) and addition made for undisclosed Bank interest amounting to Rs.38,077/-)] and initiated penalty proceeding under Section 271(1)(c) of the Income Tax Act, 1961. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The Ld. CIT(A) partly allowed the appeal of the assessee. With regard to the difference of deposits in bank and remittance to Insurance Companies through SBI Bank Account, the ld. CIT(Appeals) was of the view that since the assessee failed to explaind the source of excess deposits in SBI Bank account, he had no other option except dismissing this ground of appeal.
5.1. With regard to the addition of Rs.2,06,932/- as made by the ld. Assessing Officer, the ld. CIT(Appeals) observed that the assessee has explained source of cash deposits to the tune of Rs.85,000/- by cash withdrawal from Central Bank of India and did not explain the balance cash deposit4 of Rs.83,000/- and (A.Y. 2015-2016) Anil Kumar Sah cheque deposit4 of Rs.38,932/-. Therefore, he was of the view that the addition to the extent of Rs.1,21,932/- as unexplained deposit as made by the ld. Assessing Officer is confirmed and partly allowed this ground of appeal.
5.2. With regard to the addition on account of interest income amounting to Rs.38,077/- shown in ROI and data collected by the ld. Assessing Officer, the CIT(Appeals) was of the view that as the assessee did not have any positive evidence in support of his claim, the addition made by the ld. Assessing Officer is confirmed.
On being aggrieved, the assessee preferred an appeal before the Tribunal and raised the following issues:- (1) For that the Ld. CIT(A) has erred in sustaining addition of Rs.13,63,773/- on account of Unexplained Deposits - as the appellant had failed to answer the specific query of the A.O. in the matter- a fact which is contradicted by the Assessment Order itself as Page No.-“5” of the Assessment order itself includes the extract of reply dt. 13-04-2017. (2) For that the Ld. CIT(A) has erred in holding that the assessee has not produced the Copy of Submission made before the A.O. in response to query which is not true as the Reply itself has been made a Part of the Assessment Order by the A.O. and quoted at Page -‘5’ of the Assessment Order. (3) For that the Ld. C1T(A) has erred in sustaining the addition of Rs.13,63,773/- on the basis of Cash deposits in Bank Account just before repayment of borrowings from the Spouse of appellant on two occasion- as on the 1st Occasion i.e. on 19-02-2015 there was sufficient balance in the Bank Account even prior to deposit to make the remittance and all the remittances were in satisfaction of Old Borrowings made in earlier year. Further, there was no such transfer of Rs.5.00 lakhs as on 12.07.2014 as stated by the Ld. CIT(A). (4) For that the Ld. CIT(A) has erred in holding that the A.O. has made addition of Rs. 13.63,773/- U/s .69A inspite of the specific recording in the show cause notice as well as 5 (A.Y. 2015-2016) Anil Kumar Sah assessment order regarding the addition being made U/s 68; (5) For that the Ld. CIT(A) erred in holding that the appellant had not furnished any details of source of deposits except the Broad summary of cash and cheque without any further evidence of source of the same- the appellant had furnished a detailed Print out of Merchant Collection Portal of LIC of India which contains complete details of Premium collected from different Policyholders and its remittance.
I have heard both the sides. It was the submission of the ld. Counsel for the assessee that the ld. CIT(Appeals) partly allowed the appeal of the assessee by dismissing the ground with regard to addition on account of difference of deposits in Bank and remittance to Insurance Companies through SBI Bank Account to the extent of Rs.13,63,773/-. With regard to the addition of Rs.2,06,932/-, which was cash deposit of Rs.1,68,000/- and cheque deposit of Rs.38,932/- in Bihar Khestriya Gramin Bank, the ld. CIT(Appeals) confirmed the addition of Rs.1,21,932/- as unexplained deposit. With regard to the addition on account of interest income to the tune of Rs.38,077/- made by the ld. Assessing Officer, the ld. CIT(Appeals) confirmed the addition. The ld. Counsel pleaded that the ld. CIT(Appeals) without considering the merit of the case and not applying his mind passed the order. He pleaded to remit the matter back to the file of ld. CIT(Appeals) to decide it afresh after providing reasonable opportunity of being heard to the assessee.
On the other hand, the ld. Departmental Representative relied on the order of ld. CIT(Appeals) and pleaded to uphold the order of ld. CIT(Appeals). 6
I have perused the material available on record. During the appellate proceeding, the assessee filed written submission on 05.05.2023, wherein he has mentioned that he is an agent of LICI and New India Assurance Co. Limited. He runs a premium point for LICI in which the premium collections from policy holders are parked and transferred to LICI from time to time. The assessee also stated that he filed his return of income on a total income of Rs.2,88,040/- against which assessment was completed under section 143(3) on total income of Rs.18,96,822/- making addition to the tune of Rs.13,63,773/- on account of difference of deposits in bank and remittance to Insurance Companies through SBI account and addition to the tune of Rs.2,06,932/- with regard to Cash deposit of Rs.1,68,000/- and cheque deposit of Rs.38,932/- and also addition to the tune of Rs.38,077/- on account of undisclosed Bank interest. The ld. CIT(Appeals) was of the opinion that the assessee failed to submit any documentary evidence to justify his claim. It is seen that inspite of submitting written submission filed by the assessee, the ld. CIT(Appeals) did not consider the case properly and without applying his mind passed the order saying that the assessee did not have any positive evidence in support of his submission. The assessee already filed evidence but he has not considered the same. Therefore, in order to ensure the principle of natural justice, I am of the view that it is a fit case to provide one more opportunity to the assessee. Therefore, I remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the (A.Y. 2015-2016) Anil Kumar Sah appeal without any inference on the observations of earlier order passed by him and to decide afresh on merit. At the same breath, I also hereby caution the assessee to promptly co- operate with the proceedings before the ld. CIT (Appeals) failing which the Ld. CIT (Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/08/2025.