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Facts
The assessee, an individual with agricultural income, filed a NIL return for AY 2017-18. During demonetisation, he deposited Rs. 10,79,000/- in cash, which the AO added as unexplained money under Section 69A r.w.s. 115BBE, an addition confirmed by the CIT(A). The assessee submitted various additional evidences, including cash books, land ownership documents, and agricultural produce sale bills, before the CIT(A) that were not presented to the AO.
Held
The Tribunal noted that the CIT(A) confirmed the addition without examining the additional evidences provided by the assessee or calling for a remand report from the AO, thereby violating natural justice and Rule 46A. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer for fresh consideration, granting the assessee liberty to produce sufficient evidence.
Key Issues
Whether cash deposits during demonetisation constituted unexplained money under Section 69A r.w.s. 115BBE. Whether the CIT(A) erred in confirming the addition without considering additional evidence, violating principles of natural justice and Rule 46A.
Sections Cited
Section 250 of the Income-tax Act, 1961, Section 143(3) of the Income-tax Act, 1961, Section 139 of the Income-tax Act, 1961, Section 69A of the Income-tax Act, 1961, Section 115BBE of the Income-tax Act, 1961, Rule 46A of the Income Tax Rules
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINIAND SHRI DINESH MOHAN SINHA
Order Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2017-18, is directed against the order passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by the National Faceless Appeal Centre (NAC) Delhi/Commissioner of Income-tax (Appeals) [in short ‘Ld.CIT(A)’], dated 29.01.2024, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Act, dated 04.11.2019.
The grounds of appeal
raised by the assessee are as follows: “1.The assessment order passed u/s 143(3) of the Act is bad in law.
2. The learned Assessing Office has erred in law as well as on facts in making the huge addition of Rs.10,79,000/- u/s 143(3) of the Act on account of cash deposited in bank account and the same is treated as unexplained money u/s 69A r.w.s. 115BBE of the Income Tax Act, 1961. The learned CIT(A) has erred in confirming the same and 1 (AY-17-18) Ratanshi G Bhut dismissing the appeal of the assessee on based on conclusion that the evidences with regards to cash deposit in bank account by the assessee.”
3. Succinctly, the factual panorama of the case is that assessee before us is an Individual and having income from agriculture activity. The assessee filed his return of income u/s 139 of the income-tax Act, 1961, vide acknowledgement number 499879880250318 on 25/03/2018 declaring total income of Rs. Nil/- and also agriculture income of Rs. 2,06,609/-. The case was selected for limited scrutiny under CASS for the examination of reason "cash deposit during demonstration period". During the assessment proceedings, the assessing officer noticed that assessee has deposited cash in the bank account during the demonetisation period to the tune of Rs. 10,79,000/-. Therefore, assessing officer, issued a show cause notice to the assessee to explain the source of cash deposit in the bank account during the demonetisation period. In response to notices issued, the assessee filed his submission through E-proceedings facility. The assessee vide online submission dated 08.10.2018 submitted copy of Agriculture Income-Expenditure A/C, Balance Sheet & computation only which was verified & placed on records by the assessing officer. During demonetization period, the assessee has deposited cash amounting to Rs. 10,79,000/- (by way of SBNs) in his various bank accounts. During the course of assessment proceedings, the assessee was specifically asked to explain the source of cash deposited in his bank accounts but the assessee failed to establish with evidence the source of cash deposited during demonetisation period. Since, the assessee failed to establish the source of cash deposited during demonetisation, therefore, Rs. 10,29,000/- was added back to the total income of the assessee as unexplained money u/s 69A r.w.s.115 BBE of the Act.
4. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the learned CIT(A), who has confirmed the action of the assessing officer, therefore, assessee is in appeal before us.
(AY-17-18) Ratanshi G Bhut 5. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee. The Ld.Counsel for the assessee submitted that cash book for AY 2016-17 and cash book of AY 2017-18. The assessee also submitted the documents relating agricultural land holding, such as Form-7/12 and 8A respectively to prove the ownership of agricultural land, these documents were not in the file of the assessing officer. The assessee also submitted the sale bills of agricultural produce, which were not produced before the assessing officer. The assessee submitted confirmation letters from whom assessee sold agricultural produce, the same were not submitted before AO.
By way of alternative argument, Ld. Counsel for the assessee submitted that entire cash deposited in the bank accounts should not be treated as net profit of the assessee. Therefore, a fair estimate may be done in the case of assessee and profit element may be estimated.
On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue relied on the findings of the assessing officer.
We have considered submissions of both the parties and we note that assessee has submitted before us paper book, which contains the additional evidences which were not submitted before the assessing officer. The learned Counsel for the assessee argued before the Bench based on the documents and evidences filed in the paper, which are additional evidences, which were claimed to be submitted only to the learned CIT(A), who has not called the remand report from the assessing officer. Therefore, alternative argument advanced by the learned Counsel for the assessee that profit element may be estimated in the hands of the assessee, cannot be accepted because assessee submitted before us additional evidences, which were pressed by the assessee during the course of hearing and which were not examined by the assessing officer. The list of additional evidences are reproduced below:
(AY-17-18) Ratanshi G Bhut 10.Therefore, we note that documents at serial number 2 (a) to (j ) were submitted during the appellate proceedings, before the learned CIT(A) and assessing officer has not examined these additional evidences, as the learned CIT(A) did not send these additional evidences to the assessing officer for his examination and for calling the remand report on such additional evidences.This is pertinent for the reason that even if the additional evidences are admitted but opportunity is not given to the assessing officer, and if the appeal is allowed by the CIT(A) taking cognizance of the additional evidences, then, in that circumstances there has been violation of principle of natural justice by not giving opportunity to assessing officer thereby violating the provision contained in Rule 46A of the Rules. The Tribunal, if found correct, without going into the merits of the case, would simple set aside the matter to the file of the lower authorities. Therefore, based on these facts and circumstances, we set- aside the order of CIT(A) and remand the various issues raised by the assessee in the grounds of appeal before CIT(A) for fresh consideration by the assessing officer with a liberty to the assessee to prove his case by producing sufficient evidence/material to the satisfaction of the assessing officer. For statistical purposes the appeal of the assessee is allowed. 11.In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 09/10/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (DR. ARJUN LAL SAINI) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 09/10/2025 By order/आदेश से ,
सहायक पंजीकार आयकर अपीलीय अिधकरण ,राजकोट