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Facts
The assessee, an individual engaged in wholesale onion trading, did not file a return for AY 2018-19. His case was reopened, and the Assessing Officer completed an ex-parte assessment due to non-compliance, determining total income with a significant addition of Rs. 1.77 crore for cash withdrawals under section 69A. The Ld. CIT(A) dismissed the assessee's appeal, refusing to admit additional evidence submitted by the assessee on the grounds that it was not produced before the AO.
Held
The Tribunal observed that the assessee, a Class XI educated individual, had submitted substantial evidence including bank accounts, purchase/sale bills, and affidavits supporting his onion trading business to the CIT(A). Finding that the CIT(A) dismissed the appeal without verifying these documents and denying a reasonable opportunity, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for a fresh assessment after giving the assessee a proper hearing and considering all evidence.
Key Issues
Whether the assessment completed ex-parte and additions made under section 69A were justified given the assessee's alleged lack of awareness and subsequent submission of evidence; and whether the CIT(A) erred in not admitting and verifying additional evidence.
Sections Cited
148A(b), 148A(d), 148, 142(1), 143(2), 147, 144, 144B, 69A
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 10.09.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19.
Facts of the case, in brief, are that the assessee is an individual and claimed to be an Adhatiya engaged in the sale and purchase of onions in wholesale and has not furnished his return for the year under consideration. On the basis of information received from insight portal the case of the assessee was reopened and notice u/s of the IT Act was issued and order u/s 148A(d) of the IT Act was passed and notice u/s 148 of the IT Act was also issued to the assessee. The assessee filed return of income, profit & loss account and audited balance sheet in response to notice u/s 148 of the Act. Subsequently, the Assessing Officer issued notice u/s 142(1) and 143(2) and also show-cause notice to the assessee. Since there was no response from the side of the assessee, the assessment was completed u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act by determining total income at Rs.1,77,32,664/-. The above assessed income includes addition of Rs.1,77,32,664/- being cash withdrawals from bank account u/s 69A of the IT Act.
Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the submissions of the assessee and remand report sent by the Assessing Officer, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee.
It is the above order against which the assessee is in appeal before this Tribunal.
We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that admittedly the assessee is educated only upto Class XI and not very much aware of technology. It was the contention of Ld. Counsel of the assessee that the notices sent on email could not be seen by the assessee and the assessment order itself was seen by him on 14.07.2023 and prior to that on 10.07.2023 he got prepared a written reply and furnished the same before the Assessing Officer. We also find that after receiving notice u/s 148, the assessee got his books of accounts audited and furnished return of income disclosing income of Rs.2,75,548/- from business of onion trading under the name and style of ‘Smrudhi Trading Company’ but thereafter no compliance was made from the side of the assessee. We further find that the assessee has furnished bank accounts, purchase bills, affidavits of some of the farmers with their Aadhar Cards and ledger accounts and copy of accounts of brokers. However, the Assessing Officer in his remand report requested Ld. CIT(A)/NFAC not to accept all these evidences since they were not produced before the Assessing Officer. We further find that Ld. CIT(A)/NFAC without verifying all these documents simply accepted the request of the Assessing Officer and dismissed the appeal filed by the assessee. In this regard, we find that the names of brokers to whom onions were sold and payments were received and the names of farmers from whom onions were purchased are duly appearing in the bank accounts furnished by the assessee. We also find that the payments to the farmers were made through bearer cheques and therefore the withdrawal was considered as cash. We also find that the assessee has furnished copy of sale register, purchase register, copy of sale bills and purchase bills along with ledger accounts and copy of licence of business, issued by Man Taluka Krushi Utpanna Bazar Samiti and also the receipt for payment of licence fee to carry on the business of onion for the year under consideration. All these documents show that the assessee is engaged in the trading of onions, therefore it cannot be said that the creditors or debtors are not real, which is the prime objection of the Assessing Officer.
Considering the totality of the facts of the case and in view of our above discussions, we deem it appropriate to set-aside the order passed by Ld. CIT(A) and remand the matter back to the Assessing Officer with a direction to pass assessment order afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the