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Facts
The assessee, an individual, failed to file his Income Tax Return for AY 2019-20 despite information revealing a cash deposit of Rs. 15,81,34,560/-. The Assessing Officer (AO) reopened the assessment, and due to non-compliance, completed it ex-parte, adding the cash deposit to the assessee's income. The CIT(A)/NFAC subsequently deleted this addition, stating the deposits belonged to M/s Bharat Financial Inclusion Limited (BFIL), for whom the assessee was a Branch Manager.
Held
The Tribunal observed that the CIT(A)/NFAC deleted the substantial addition without proper application of mind, without calling for a remand report from the AO, and by accepting new evidence in violation of Rule 46A(3) of the Income-tax Rules, 1962. Therefore, the matter was remanded back to the CIT(A)/NFAC for a fresh decision in accordance with law, giving due opportunity to the assessee and allowing the CIT(A) to seek a remand report from the AO if deemed appropriate.
Key Issues
Whether the CIT(A) was justified in deleting the addition of cash deposits without obtaining a remand report from the AO and by accepting new evidence in violation of Rule 46A(3) of the Income-tax Rules, 1962, thus not applying proper judicial mind to the facts of the case.
Sections Cited
Section 69A, Section 139(1), Section 139(4), Section 147, Section 148, Section 142(1), Section 144, Section 144B, Section 133(6), Section 144A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI R.K. PANDA, VICE- & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER R.K. PANDA, VP This appeal filed by the Revenue is directed against the order dated 07.08.2025 passed by the Ld.CIT(Appeals)/National Faceless Appeal Centre (in short, “NFAC”), Delhi, relating to assessment year 2019-20.
2. The only effective ground raised by the Revenue reads as under: “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in allowing the appeal of the assessee and deleting the addition of Rs. 15.81,34,560/- made u/s 69A of the Income-tax Act, 1961, without calling for a remand report from the Assessing Officer, despite admitting and relying upon new evidence and submission which were never produced before the Assessing Officer during the assessment proceedings, thereby violating the mandatory provisions of Rule 46A(3) of the Income-tax Rules, 1962 and principles of natural justice.
Any other ground to be adducted at the time of hearing”
Facts of the case, in brief, are that the assessee is an individual and had not filed his return of income. As per information available with the department that the assessee, during the FY 2018-19, had made cash deposit to the tune of Rs.15,81,34,560/- and had not filed his return income either u/s 139(1) or 139(4) of the Act, the AO, after recording reasons, re-opened the assessment as per the provisions of sec 147 of the Act. Accordingly, notice u/s 148 of the Act dated 23.03.2023 was issued and served on the assessee. However, there was no response from the side of the assessee to the notice issued u/s 148 of the Act. Subsequently, notices issued by the AO u/s 142(1) of the Act also remained un-complied with. The AO, therefore, completed the assessment u/s 147 r.w.s 144 r.w.s. 144B of the Act on 20.02.2024 determining the total income of the assessee at Rs.15,81,34,560/-.
In appeal, the Ld. CIT(A)/NFAC deleted the addition made by the AO by observing as under:
“4. In the absence of compliance of any sort on the part of the appellant. the assessment proceedings initiated u/s. 147 had to be completed under the provisions of section 144. Apparently, the faceless assessment unit made the addition of Rs.15,81,34,560 without even verifying the bank statement. Notices u/s. 133(6) were issued to State Bank of India instead of Punjab National Bank. The appellant submitted an intimation dated 10/12/2019 from the Jurisdictional Assessing Officer that the assessment proceedings for AY 2017-18 were dropped in his case. It is mentioned that, during the demonetization period, the assessee has made cash deposits of Rs.20,52,500 on different dates. On examination, it was found that the aforesaid bank account is in the name of Bharat Financial Inclusion Limited) BFIL), Pendra Road. In this connection, Punjab National Bank, Branch Pendra has submitted a letter stating that Shri Baldev Prasad Patel, PAN BIDPP4710J was working as BM for FY 2016-17 in M/s Bharat Financial Inclusion Limited (BFIL), Pendra Road and he is just an authorized official jointly to sign cheques and other payment instruments for making payments from the Bank accounts opened in the name of BFIL. It has also been stated that all the transactions occurred in the FY 2016-17 in A/c No. 6103002100000889 (current account) relates to M/s Bharat Financial Inclusion Limited. As per directions U/s 144A of the Income-tax Act, 1961 and in view of the above facts, the present assessment proceedings in the case of the assessee for the above assessment year are being dropped. It is clear from above that the cash deposits in the Punjab National Bank account relates to M/s Bharat Financial Inclusion Limited and not the appellant. As a result, the appeal is allowed.”
Aggrieved with the order of the CIT(A)/NFAC, the revenue is in appeal before the Tribunal.
Ld. CIT-DR strongly opposed the order of the Ld. CIT(A)/NFAC in deleting the addition made by the AO. She submitted that the assessee did not file his return nor responded to the statutory notices issued u/s 142(1) and no details were filed for which the AO had made the addition. Ld. CIT(A)/NFAC, without calling for any remand report from the AO or without giving any opportunity to the AO, had deleted the addition by accepting certain evidences filed by the assessee in violation of Rule 46A(3) of the Income-tax Rules, 1962 (in short, IT Rules). She accordingly, submitted that the order of the CIT(A)/NFAC be setaside and that of the AO be restored.
Ld. AR appearing for the assessee on the other hand supported the order of the Ld. CIT(A)/NFAC. In his alternate contention, he submitted that he has no objection if the matter is restored to the file of the Ld. CIT(A)/NFAC.
We have heard the rival arguments made by both the sides and perused the orders of the CIT(A)/NFAC and AO. It is an admitted fact that due to non-compliance to the various statutory notices issued by the AO, he completed the assessment u/s 147 r.w.s 144 r.w.s. 144B of the Act on 20.02.2024 determining the total income of the assessee at Rs.15,81,34,560/-. We find the Ld. CIT(A)/NFAC without calling for any remand report from the AO has accepted certain evidences filed by the assessee and deleted the addition in violation of Rule 46A (3) of the IT Rules. Although, the AO at page No. 3 of the order has mentioned that a notice u/s 133(6) of the Act was issued to State Bank of India, however, in subsequent line, he has categorically mentioned that there was cash deposit in Punjab National Bank to the tune of Rs.15,81,34,560/-. Therefore, merely on the basis of a typographical error, the Ld.
1. CIT(A)/NFAC, in our opinion, should not have deleted the huge addition without going through the details of the cash deposits made by the assessee in Punjab National Bank. Since, a perusal of the order of CIT(A)/NFAC shows that he has not applied his mind properly before deleting the additions, has not called for any remand report from the AO and has accepted certain evidences filed before him in violation of Rule 46A(3) of the IT Rules, therefore, considering the totality of the facts of the case and in the interest of justice, we, deem it proper to restore the issue back to the file of Ld. CIT(A)/NFAC with a direction to decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. He may if think proper can call for a remand report from the AO. The ground raised by the revenue is accordingly allowed for statistical purpose.
In the result, the appeal filed by the revenue is allowed for statistical purposes.
Order pronounced in open court on 14th day of November, 2025.