Loading judgment…
Facts
The assessee, Akhtar Hussain, a salaried employee earning Rs. 15,000 per month, challenged the addition of Rs. 2,36,52,638 as unexplained money under Section 69A of the Income Tax Act for the AY 2016-17, arising from cash deposits in his bank account. The CIT(A) confirmed this assessment ex-parte, as hearing notices were sent to an incorrect email address, depriving the assessee of an opportunity to be heard.
Held
The Tribunal found a gross violation of natural justice, acknowledging that the CIT(A) issued notices to an incorrect email, leading to an ex-parte order. Considering the assessee's limited income and the large cash deposits, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for a de novo assessment, granting the assessee a proper opportunity to explain the source of deposits. The appeal grounds were allowed for statistical purposes.
Key Issues
Validity of assessment proceedings under sections 147, 144, 148, 151A; Violation of natural justice due to incorrect email for hearing notices; Addition of unexplained money under section 69A; Levy of interest and initiation of penalty proceedings.
Sections Cited
147, 144, 148, 151A, 250, 69A, 271AAC, 234A, 234B, 272A(1)(d), 271F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
O R D E R
PER KUL BHARAT, VICE PRESIDENT.
: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 20.06.2025 pertaining to the assessment year 2016-17. The assessee has raised the following grounds of appeal: -
1. That the Ld. CIT(A)erred on facts and in law in confirming the action of Ld. Income tax officer, Basti (‘assessing officer’) to assess income of the appellant for the relevant assessment year at Rs.2,36,52,638. Re: Validity of the assessment order:
Page 2 of 4 2. That the Ld. CIT(A) erred on facts and in law in confirming the action of assessing officer of passing assessment order under section 147 read with section 144, without appreciating that there assessment proceedings, including issuance of notice under section 148 dated 18.03.2023 and passing of assessment order dated 07.03.2024,have been conducted by the jurisdictional assessing officer, in contravention of the provisions of section 151A of the Act. Re: Violation of principles of natural justice; 3. That the Ld. CIT(A) erred on the facts and circumstances of the case, by sending hearing notices under section 250 of the Act to an incorrect email address, despite the correct email address having been duly provided in Form 35 and also updated in the profile section on the e-filing portal.
4. That the Ld. CIT(A) erred on the facts and circumstances of the case and in law in confirming the action of assessing officer of passing assessment order under section 147 read with section 144 of the Act, without affording any opportunity of being heard to the appellant including personal hearing, and in gross violation of principles of natural justice. Re: Addition of Rs.236,52,638 as unexplained money under section 69A of the Act: 5. Thai the Ld. CIT(A) erred on the facts and circumstances of the case and in law in confirming the action of the assessing officer to assess income of the appellant Rs2,36,52,640, by treating the same as unexplained money under section 69A of the Act 6. That the Ld. CIT(A) erred on the facts and circumstances of the case in confirming the action! of the assessing officer without appreciating the fact that the appellant did not own the alleged money and merely acted as a facilitator for payment of taxes and charges to the Regional Transport Office (RTO) on behalf of customers purchasing motorcycles. Re: Other issues: 7. That the Ld. CIT(A) failed to adjudicate the ground raised
by the appellant challenging the direction of the assessing officer for initiation of penalty proceedings under the existing section 271AAC of the Act.
8. That the assessing officer erred on facts and in law in levying interest under sections 234A and 234B of the Act.
9. That the assessing officer erred on facts and in law in initiating penalty proceedings under sections 272A(l)(d) and 27IF of the Act.”
2. Apropos the grounds of appeal, the Ld. Counsel for the assessee, at the outset, submitted that there was no effective representation on behalf of the assessee before the lower authorities. Further, he pointed out that the Ld. CIT(A) issued notice at an incorrect email address, and consequently, the assessee did not receive proper intimation of the appellate Page 3 of 4 proceedings. He further submitted that the assessee is a small salaried employee earning Rs. 15,000/- per month and that the amount deposited in the bank account does not belong to him. He further contended that no effective and reasonable opportunity of being heard was granted to the assessee.
On the other hand, the Ld. Departmental Representative for the Revenue opposed the submissions and supported the orders of the lower authorities.
We have heard the Ld. Representatives of both parties and perused the material available on records. It is not in dispute that the notice issued by the Ld. CIT(A) was sent to an incorrect email address, different from the email address furnished by the assessee. Consequently, the assessee could neither appear nor file any explanation before the appellate authority. It is further observed that the assessee failed to appear before the Assessing Officer, and the impugned addition was made ex parte, on the basis of cash deposits reflected in the bank account of the assessee. Having considered the fact that the assessee is a salaried employee earning Rs. 15,000/- per month, such a huge amount could not have been deposited requires proper examination. Therefore, we are of the considered view that an opportunity should be granted to the assessee to represent his case and explain the source of such cash deposits in his account. Therefore, the impugned order passed by the Ld. CIT(A) is hereby set aside, and the assessment is restored to the file of the Assessing Officer for making de novo assessment in accordance with law. Needless to say that the assessee would provide all the information which is relevant and necessary for adjudication of Page 4 of 4 the matter. Grounds of appeal
of the assessee are allowed for statistical purposes.
5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 24/02/2026.