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Facts
The assessee made cash deposits of Rs. 20.14 Lacs during the demonetization period, leading to a scrutiny of the sources. The return filed was treated as invalid, and the assessee's claims of sources like agricultural income and earlier withdrawals were largely unsubstantiated. Consequently, the Assessing Officer made an addition of Rs. 94,87,033/- to the assessee's income under best judgment assessment, which was later confirmed by the CIT(A).
Held
The tribunal acknowledged the assessee's claim of being an agriculturist who could substantiate the bank credits. Recognizing the principles of natural justice, the tribunal decided to provide the assessee with another opportunity to present their case. Therefore, the impugned order was set aside, and the assessment was restored to the Assessing Officer for fresh consideration.
Key Issues
Whether the assessee should be granted a fresh opportunity to substantiate cash deposits made during demonetization. Validity of the best judgment assessment when the assessee disputes the source of income.
Sections Cited
Section 144 of the Income Tax Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
(िनधा"रणवष" / Assessment Year: 2017-18) Shri Rai Virender Singh ITO Ward-1 बनाम/ Mangol Patti, Ward No.-9, Village Bhagal Ambala Road, Kaithal Vs. Kaithal (Haryana) – 136034 Haryana - 136034 "थायीलेखासं./जीआइआरसं./PAN/GIR No. EFBPS-6495-K (अपीलाथ"/Appellant) : (""थ" / Respondent) अपीलाथ"कीओरसे/ Appellant Sh. Ashok Goyal (CA) and Sh. Sifatpreet Singh (Advocate) – Ld. ARs by : ""थ"कीओरसे/Respondent by : Sh. Dr. Ranjit Kaur (Addl.CIT) – Ld. Sr. DR (Virtual) सुनवाईकीतारीख/Date of Hearing : 03.02.2026 घोषणाकीतारीख /Date of Pronouncement : 04.02.2026 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017- 18 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 11-03-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 144 of the Act on 27-12-2019. Having heard rival submissions, the appeal is disposed-off as under.
2 Assessment Year: 2017-18 2. Pursuant to receipt of information of cash deposits of Rs.20.14 Lacs by the assessee during demonetization period, the case of the assessee was scrutinized wherein the assessee was required to establish the sources of these deposits. The return as filed by the assessee was treated as invalid return being filed beyond the time limit. The assessee attributed the deposits to earlier withdrawals, out of agricultural income and out of sale of trees and buffalo etc. However, these claims largely remained unsubstantiated / unverified. The Ld. AO computed that total credits in the bank accounts were Rs.99,87,033/-. After granting benefit of agricultural income for Rs.5 Lacs, the remaining amount of Rs.94,87,033/- was added to the income of the assessee. The Ld CIT(A) confirmed the assessment for want of any representation from the assessee against which the assessee is in further appeal before us. The Ld. AR stated that the assessee is an agriculturist and he is in a position to substantiate the sources of bank credits. The Ld. Sr. DR pleaded for dismissal of the appeal.
Keeping in mind the principles of natural justice, we deem it fit to grant another opportunity to the assessee to substantiate its case. Accordingly, the impugned order is set aside the impugned order and the assessment is restored back to the file of Ld. AO for fresh consideration with a direction to the assessee to plead and prove its case forthwith. No other ground has been urged in the appeal.
3 Assessment Year: 2017-18