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Facts
The assessee, an NGO, failed to file its return of income as required under section 139(4C)(e). The Assessing Officer reopened the assessment under section 147, treating a cash withdrawal of ₹1,10,34,000/- as unexplained expenditure under section 69C due to lack of explanation. The CIT(A) dismissed the assessee's appeal for non-prosecution as the assessee failed to respond to notices.
Held
Considering the lack of proper compliance by the assessee's consultant before both the AO and CIT(A), the Tribunal deemed it fit to set aside the orders of both lower authorities. The matter was remanded back to the AO for a de novo reassessment, granting the assessee a fresh opportunity to be heard and submit explanations, with a directive not to seek unnecessary adjournments.
Key Issues
Whether the assessment reopening and addition of cash withdrawal as unexplained expenditure under Section 69C was justified, and if the assessee should be granted a fresh opportunity to present its case given prior non-compliance before lower authorities.
Sections Cited
139(4C)(e), 147, 144, 250, 69C, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, GUWAHATI ‘DB’ BENCH AT KOLKATA
Before: SHRI MANOMOHAN DAS & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 30.05.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that on the facts and circumstances of the case as well as on the points of law the order passed u/s 147 r.w.s. 144 and u/s 250 are bad in law.
For that on the facts and circumstances of the case as well as on the points of law the assessing officer erred in making an addition of ₹11034000/- as unexplained expenditure u/s 69C of the income tax act 1961 and the Ld. CIT(A) also erred in confirming the same.
For that any other grounds may kindly be allow to be urge at the time of hearing.” ITA No.: 276/GTY/2025 Assessment Year: 2018-19 Green Land Society (N.G.O.).
Brief facts of the case are that the assessee is an NGO/Society and had not filed the return of income despite being required to do so u/s 139(4C)(e) of the Act as its total income without considering the exempted income had exceeded the maximum amount not chargeable to tax. The assessee was found to have withdrawn cash from a current account amounting to ₹1,10,34,000/- during the relevant previous year and since no return of income was filed, therefore, the proceedings were reopened u/s 147 of the Act after following the prescribed procedure and in notice u/s 148 of the Act was issued. The assessee failed to respond to these communications from the Ld. AO and since no satisfactory explanation was provided, therefore, the source of cash withdrawn amounting to ₹1,10,34,000/- remained unexplained and was treated as unexplained expenditure u/s 69C of the Act and added to the total income of the assessee. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A). In Form no. 35 the assessee had mentioned that “Facts of the case will be furnished at the time of hearing.” The Ld. CIT(A) issued four notices during the course of the appeal but the assessee did not respond to any of the notices, therefore, the addition was confirmed and the appeal was dismissed on account of non-prosecution.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. The Ld. AR submitted that due to lack of communication between the consultant and the assessee, proper compliance could not be made. It is mentioned that the assessee has sufficient evidence for explaining the source of withdrawals and ITA No.: 276/GTY/2025 Assessment Year: 2018-19 Green Land Society (N.G.O.). requested that the matter may be remanded to the Ld. AO. The Ld. DR on the other hand requested that the order of the Ld. CIT(A) be confirmed.
Since there was no proper compliance before both the Ld. AO as well as before the Ld. CIT(A), in the interest of justice and fair play it was considered that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) as well as the order of the Ld. AO and remand the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced on 11th December, 2025 under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963. [Manomohan Das] [Rakesh Mishra] Judicial Member Accountant Member Dated: 11.12.2025 Bidhan (Sr. P.S.) ITA No.: 276/GTY/2025 Assessment Year: 2018-19 Green Land Society (N.G.O.). Copy of the order forwarded to:
Green Land Society (N.G.O.), Chotobashjani, Chagolchara, Dhubri, Assam, 783324. 2. Ward-2(3) Xempt, Guwahati.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Guwahati Benches, Guwahati.
Guard File. //// By order