ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - SHILLONG, SHILLONG vs. SHRI CHANDRA MOHAN JHA, SHILLONG

Appearances by: Assessee represented by : Jaspal Singh Sethi, Advocate Department represented by : Sanjay Jha, JCIT Date of concluding the hearing : 18.11.2025 Date of pronouncing the order : 02.12.2025

ORDER

PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

(i) Rs. 21,22,58,822/- (cash u/s 69A of the Act)

(ii) Rs. 7,52,834/- as unexplained personal expenses (iii) Rs. 1,27,58,993/- as undisclosed investments u/s 69 of the Act.

(iv) Rs. 25,00,000/- as undisclosed investments u/s 69 of the Act. (v) Rs. 2,32,06,500/- again as unexplained investment u/s 69 of the Act. (vi) Rs. 41,25,000/- as unexplained cash deposit u/s 69A of the Act.

“1. Whether on the facts and in the circumstances of the case, the Ld CIT(A) was unjustified in determining the total income of the assessee at Rs.52,28,871/-as against the assessed income of Rs. 25,64,55,886/. 2. Whether on the facts and in the circumstances of the case, the Ld.CIT(A)

& 78/GTY/2018 Chandra Mohan Jha erred in accepting additional evidence in course of appellate proceedings without proper verification of the same with regard to financial capacity of assessee's son to advance huge gift through misuse of ID5-2016 Scheme as well as cash loans from M/s CMJ Foundation The IDS declaration was made after completion of assessment u/s 143(3) to facilitate explaining the source of investment which had already been assessed u/s 143(3) in violation of IDS, Scheme 2016.

3. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting an addition of Rs.20,86,67,681/- as unexplained money in undisclosed bank account of the assessee u 69A of the IT Act.

4. Whether on the facts an in the circumstances of the case, the Ld.CIT(A) erred in deleting an addition of Rs.7,52,834/- on account of undisclosed/ unexplained personal expenditure through credit card.

5. Whether in the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting an addition of Rs. 1,25,00,000/- as unexplained investments in Fixed Deposits u/s 69 of the IT Act.

6. Whether on the facts and in the circumstances of the case, the Ld CIT(A) erred in deleting an addition of Rs. 25,00,000/-as unexplained Investments in Mutual Funds u/s 69 of the IT Acts 7. Whether in the facts and in the circumstances of the case, the Ld.CIT(A) erred in the deleting an addition of Rs.2,32,06,500/- as unexplained investments in immovable property u/s 69 of the IT Act.

“1. That the appellate order as passed is against law and facts of the case.

2. That the learned Commissioner of Income Tax (Appeals) has erred in upholding an addition of Rs.32,91,141/-. Inspite of the fact that confirmation to that effect was duly filed.

4. That the learned Commissioner of Income Tax (Appeals has erred in upholding the addition of Rs. 2,58,937- on account of accrued interest of FDR when the same was duly explained during the course of hearing and alread included in the return of income.

& 78/GTY/2018 Chandra Mohan Jha 5. That the additions as made are highly accessible and arbitrary.

6. That the appellate as passed is not sustainable on the facts and circumstances of the case.” 2.3 During the course of first appellate proceedings, the assessee could, apparently obtain some documents seized by the CID, Meghalaya and submitted the same before the Ld. CIT(A). Thereafter, a remand report was called from the Ld. AO and the same was submitted vide the Ld. AO’s letter dated 25.03.2017. Unfortunately, the said remand report is cryptic and the Ld. AO is seen to have simply mentioned that since ample opportunities were provided during assessment stage to the assessee, hence at first appellate stage the provision of such new evidence was unacceptable. The following portion of the remand report deserves to be extracted:

“Additional evidence produce by the assessee at this state is not acceptable. Since these additions were made on undisclosed bank account, count, expenses in credit cards, undisclosed cash deposit. Further more evidence like cash gift received from his son Shri. Govind Jha, PAN-AGFPG8171N was made from the IDS Declaration 2016 which was after completion of assessment year and completion of assessment u/s 143(3) of the Act dated 05/03/2016. Cash loan received as shown in the paper book from CMJ University is not acceptable since it is violated the provision of section 269SS of the Act and file of the assessee CMJ University is assessed in this Circle under CMJ foundation PAN-AAATC6117A and filed return upto A.Y 2012-13 and same was assessed u/s 143(3) of the Act on 31.03.2015. So the additional evidence produce by the assessee is not acceptable.” We cannot but express sadness and displeasure at the casual manner in which this report has been prepared, but the fact remains that the plethora of documents submitted before the Ld. CIT(A) were virtually unexamined at the Ld. AO’s stage and the Ld. CIT(A) has, in the absence of an adequately drafted remand report, adjudicated the various issues mainly on the basis of details and explanations filed by the assessee. The present cross-appeals arise from the relief given by him and the additions sustained thereon. The actions of the Ld. CIT(A) have been captured in a tabular form, prepared with the help of both the Ld. DR/AR as under:

& 78/GTY/2018 Chandra Mohan Jha

4 2 3.2 3.3 3.4 4.1 4.2 4.3 4.4 5 Amount of addition Result in CIT(A) Order with Para no. Summary of Remarks by CIT(A) for amounts Description of deleted/confirmed Addition Cash Non Cash Total Cash Non cash Deleted Sustained Deleted Sustaine d • Amount of Maturity from LIC of India 1,12,31,997 NIL 2,54,83,314 1,42,51,317 1,12,31,997 1,42,51,317 Nil • Saving Bank interest Para 5.4, Page 4 • Confirmation of Credits filed and accepted

• Saving Bank interest declared in ROI 15,898 NIL • Inter Bank Transfers • Confirmation of Credits filed and accepted 28,20,898 28,05,000 15,898 28,05,000 NIL • Unexplained amount of Rs. 3,00,000/- addition 5.5, Page 5 confirmed -not challenged

36,005 32,91,141 • Saving Bank interest 43,67,146 10,40,000 33,27,146 10,40,000 NIL • No Documents filed - 32,91,141/- confirmed and Para 5.6, Page 5 and 6 Challenged by Assessee 17,00,000 17,00,000 NIL 17,00,000 NIL N/A N/A Addition of 86,03,774 NIL • Saving Bank interest 2,28,38,574 1,42,34,800 86,03,774 1,42,34,800 NIL Rs. • Confirmation of Credits filed and accepted Para 5.8, Page 6 21,22,58,822 and 7 Undisclosed 11,12,00,856 N/A Bank Accounts 11,12,00,856 N/A 11,12,00,856 N/A N/A • Bank A/c of some other Assessee Para 5.9, Page 7

• Saving Bank interest 2,85,82,280 NIL 2,87,82,280 2,00,000 2,85,82,280 2,00,000 NIL • Inter Bank Transfers 5.10, Page 7 • Confirmation of Credits filed and accepted and 8 • Saving Bank interest declared in ROI • Inter Bank Transfers 1,12,48,160 3,00,000 1,25,88,160 10,40,000 1,15,48,160 10,40,000 NIL • Confirmation of Credits filed and accepted • Unexplained amount of Rs. 3,00,000/- addition confirmed - not challenged

Para 5.11, page 8 and 9 27,594 NIL 24,77,594 24,50,000 27,594 24,50,000 NIL • Saving Bank interest Para 5.12, Page 9 and 10 Total Addition Confirmed = 32,91,142/- + 3,00,000/- = 35,91,142/- 21,22,58,822 3,77,21,117 17,45,37,705 Total Addition deleted = 1,12,31,997 + 15,898 + 36,005 + 86,03,774 + 2,85,82,280 + 1,12,48,160 + 27,594 +11,12,00,856= 17,09,46,564/- Total cash addition deleted = 3,77,21,117/- adjudicated at Para 5.13, Page 10, 11 and 12

Amount of addition Summary of Remarks by CIT (A) Result in CIT (A) Order with Para no. Description of for amounts deleted / confirmed Addition Cash Non Cash Total Cash Non Deleted Sustained Deleted Sustained cash Personal Exp. 7,52,834 NIL • Payments through Savings 7,52,834 N/A Through Para 6.3, Page 13 account already considered Credit Cards under Para 5 - Duplication of • Fixed Deposits made in earlier addition and thus Deleted assessment year and does not 1,25,00,000 2,58,993 Fixed Deposits 1,27,58,993 N/A belong to current year. • Fixed Deposits made from Savings Para 7.3, Page 14 and 15 Account already explained in para 5 - Duplication of addition

2,500,000 NIL Mutual Funds 25,00,000 N/A • Mutual Funds from saving Para 8.2, Page 15 an 16 accounts - Duplication of addition 2,32,06,500 NIL Immovable 2,32,06,500 N/A • Detailed documentation and Para 9.3, Page 17 Property explanations filed and accepted Unexplained 5,25,000 • Amount of 36,00,000/- does not 3,600,000 pertain to current year cash deposits 41,25,000 N/A • Rs. 5,25,000/- cash deposit - no and bank explanation filed - confirmed - deposits Para 10.3, Page 18 and 19 Challenged & 78/GTY/2018 Chandra Mohan Jha 3. Before us the Ld. DR argued with the help of submissions prepared by the Ld. AO. The Ld. DR took us through the contours of various additions and stated that the Ld. CIT(A) had fallen in error in granting relief to the assessee. The Ld. DR read out from the written submissions, some portions of which deserve to be extracted as under:

“It is to be kindly noted that M/s. CMJ Foundation did not filed any ITR for the A.Y.2013-14, whereas loan confirmations filed by the appellant before the Ld. CIT(A) were accepted. The Ld. CIT(A) erred in accepting the contention of the assessee w.r.t. the so called loans received and investments made through the sources of such loans which were not supported by any ITR. He also accepted the additional evidences without proper verification of the same w.r.t. the financial capacity of assessee's son to advance huge loans through misuse of IDS mechanism and advance huge gift through misuse of IDS-2016 Scheme as well as cash loans from M/s CMJ Foundation. It is also pertinent to mention that the IDS declaration was made after completion of assessment u/s.143(3) to facilitate explaining the source of investment which had already been assessed u/s.143(3) in violation of IDS, scheme 2016. Whereas, in the Remand Report [copy enclosed), the AD duly reported that these additions were made on undisclosed bank account, expenses in credit cards, undisclosed cash deposit. Further more evidence like cash gift received from his son Shri Govind Jha, PAN-AGFPG8171N was made from the IDS Declaration 2016, which was after completion of A.Y. and after completion of assessment u/s 143(3) of the Act on 05.03.2016, Further, Cash loan received as shown in the paper book for CMJ University is not acceptable, since it is violated the provisions of sec.26955 of the Act. Also, M/s. CMJ Foundation filed it's ITR upto the A.Y.2012-13 and the same was assessed u/s.143(3) on 31.03.2015, So, additional evidence produced by the assessee is not acceptable The CIT (A) simply citing that an amount of Rs.75,00,000/- (by cheque), Rs.36,60,000/- (received from LICI), Rs.71,997/- (saving bank interest), Rs.15,898/- (saving bank interest), Rs.36,005/- (saving bank interest), Rs.86,03,774/- (Cash deposits explained as gift received from Shri Gopal Jha, son), Rs. 11,12,00,856/- (cash deposits which was unexplained before the AO during assessment), Rs. 2,85,82,280/- Rs.1,12,48,160/-, Rs.27,594/- and Rs.3,77,21,117/-(Cash Deposits) totaling Rs.20,86,67,681/- were received from CMJ Foundation by way of transfer through bank account, he did not appreciate the fact that M/s. CMJ Foundation had not filed the ITR for the A.Y. 2013-14 and also the purpose of transfer of the said amount is not clear, whether it was salary, loan, gift or for any other consideration, which was not put before the AO nor the Ld. CIT(A). Further, the assessee being an interested person (founder and trustee) of the trust M/s. CMJ Foundation, the trust cannot advance money, loan etc for the benefit of the interested person as per section 13(1) of the IT Act, 1961 and as M/s. CMJ Foundation had not filed the ITR for the A.Y.2013-14, the same cannot be verified and treated as genuine. Further, whether the loan had been shown by the appellant in his balance sheet or not, remains a question. The Ld. CIT(A) has erred on this issue(s)........ 6 & 78/GTY/2018 Chandra Mohan Jha As per the IDS-2016, a declarant cannot disclose any income which has already declared by him in his ITR which has already been considered. However, the declarant can avail of the immunities in respect of any income disclosed which is over and above the assessed income where the assessment is completed. The IDS 2016 Rules [ copy enclosed] clearly states that while making the declaration: Clause (h) the income declared is not chargeable to tax under the Income Tax Act for any previous year. (i) Where a notice u/s.142 or 143(2) of 148 or 153A or 153C of the IT Act 1961 has been received in respect of such A.Y. and the proceeding is pending before the AO. In this regard, I would also like to rely on the decision of the Hon'ble Supreme Court reported in [2022] 136 taxmann.com 373 (SC) / [2022] 287 Taxman 649 (SC) [28/03/2022 wherein it has been held that ". declaration made under IDS would provide immunity only to declarant and no immunity would be provided from taxation in hands of a non-declarant assessee - Held, yes...............". [ copy enclosed ]. Hence, my reliance placed upon the order passed by the Ld. AO.” 3.1 Per contra, the Ld. AR supported the findings of the Ld. CIT(A) wherever relief was given and assailed the action with respect to quantum of income confirmed at first appellate stage. During the course of hearings over a period of time, the Ld. AR has filed several iterations of written submissions on various issues. The Ld. AR took us through the relevant portions of such written submissions which deserve to be extracted selectively for the sake of clarity. The relevant portions form the Ld. AR’s submissions on the Revenue’s appeal are as under:

“Ground 2 The ground is general in nature and not directed against any specific relief provided in the order of the CIT(A) It is incorrectly noted that the assessee has received cash loans from M/s. CMJ Foundation. There is no record of such 'statement' anywhere in the assessment order or the appellate order. Further, the claim of the revenue that the IDS declaration was made after the assessment u/s. 143(3) of the LT. Act is incorrect. It is also submitted that the revenue claim that there was some violation of IDS scheme is incorrect. As a matter of fact, there was no IDS declaration in the case of the defendant assessee. Despite having filed the appeal for more than 5 years, the revenue has not filed any paper book or any other document or argument in support of the ground of appeal substantiating the claim & 78/GTY/2018 Chandra Mohan Jha The defendant assessee relies upon the findings of the Commissioner of Income Tax (Appeals) in the order as passed. Ground 3. The ground taken by the revenue is general in nature and does not specifically point any irregularity in the order of the CIT(Appeals). The CIT(A) has passes detailed reasoning in para

5. (Page 4 to 12 of the order) while allowing the claim of the assessee....... Ground-4 The ground taken by the revenue is general in nature and does not specifically point any irregularity in the order of the CIT(Appeals). The CIT(A) has passed detailed reasoning in para 6.3 (Page 13 of the order) while allowing the claim of the assessee...... Ground-5 The ground taken by the revenue is general in nature and does not specifically point any irregularity in the order of the CIT(Appeals). The CIT(A) has passed detailed reasoning in para 7.3 (Page 15 of the order) while allowing the claim of the assessee and providing that the Fixed deposits pertain to earlier assessment years..... Ground 6. The ground taken by the revenue is general in nature and does not specifically point any irregularity in the order of the CIT(Appeals). The CIT(A) has passed detailed reasoning in para 8.2 (Page 16 of the order) while allowing the claim of the assessee and stating that the investments are out of the bank accounts of the assessee and the credits in the banks have been explained in detail..... Ground-7 The ground taken by the revenue is general in nature and does not specifically point any irregularity in the order of the CIT(Appeals). The CIT(A) has passed detailed reasoning in para 9.3 (Page 17 of the order) while allowing the claim of the assessee..... Regarding the assessee’s appeal, the Ld. AR’s submissions are as under:

“Ground-2 It may kindly be noted that the amount of Rs. 32,91,141/- was received by the appellant assessee from Cong El. The confirmation of account giving the details of the amounts received was also filed before the Commissioner of Income Tax (Appeals) and is filed herewith also. The appellant has filed a small paper book & 78/GTY/2018 Chandra Mohan Jha numbering into 14 pages wherein the conformation as noted above is available at Page No. 1 of the paper book. It may kindly be noted that Mrs. Cong El being a tribal does not file her Income Tax Return and as such the same could not be provided. The confirmation duly provides for the address and the PAN for identification. Ground-3 It may kindly be noted that the appellant assessee had explained the amount of Rs. 5.25,000/-as cash deposit before the learned Commissioner of Income Tax (Appeals). Para 10.2 of the order of the CIT(A) does mention the fact that the amount is reflected in the cash flow statement. As a matter of fact, the various cash deposits in the different banks were explained by way of the cash flow statement and detailed in Para 5.4 of the order. The cash flow statement as filed was duly accepted by the CIT(A). However, while adjudicating the amount of Rs. 5,25,000/- the CIT(A) overlooked the amount of Rs. 5,25,000/- which was a part of the cash flow statement. The copy of the cash flow statement as filed before the CIT (Appeals) is enclosed and available at Page No. 10 to Page No. 14 of the paper book. The specific transaction of Rs. 5,25,000/-is reflected at Page No. 14 of the paper book and highlighted for your kind perusal and record. The written submissions filed before the learned Commissioner of Income Tax (Appeals) wherein such amount was explained is also provided herein. The amount of Rs. 5,25,000/- is reflected at Page No. of the written submissions. As such the amount of deposit in the bank stands explained as being deposited out of the available cash in hand with the appellant assessee.

4.1 We also observe that the Ld. CIT(A) has taken pains to point out that substantial quantum of deposits considered to be in cash were actually transfer entries from other bank accounts, notably from one M/s CMJ Foundation (pages 4 to 7 of the impugned order.) While there can be no quarrel with such a factually correct finding by the Ld. CIT(A), but we find that exclusive reliance has been placed on the confirmation issued by the said CMJ Foundation. It was informed by the Ld. DR that in the said Foundation’s name CMJ stands for Chandra Mohan Jha (assessee). If this be so then such confirmations would be, prima facie, self-serving documents, which at least merit a deeper probe with respect to the genuineness of transaction and the capacity of M/s CMJ Foundation to advance such sums, especially when the said Foundation has not filed its return of income for AY 2013-14. Moreover, there has been no probing into & 78/GTY/2018 Chandra Mohan Jha the reasons for and the nature of such transactions. We also cannot be blind to the fact that the assessee is being probed by the CID, Meghalaya for some alleged misconduct. We find no attempt to determine the fate of such enquiry and whether any findings there would have any bearing on determining this assessee’s correct tax liability. Furthermore, there are serious errors pointed out by the Ld. CIT(A), for instance that an addition of Rs. 11,12,00,856/- as a cash deposit by the assessee, was actually deposits made in the bank account owned by M/s CMJ Foundation (para 5.9 at page 7 of the impugned order). Also, Rs. 32,30,000/- received by one Cong EI has been claimed by the assessee, through a confirmation from that person, but was not verified at any stage. Furthermore, significant transactions done by M/s CMJ Foundation have been added in the assessee’s hands, etc.

4.2 Considering the illustrative, and by no means an exhaustive, list of factual inaccuracies as per discussion above, about the gaps in fact finding, reliance on IDS done by son to justify cash deposit by the assessee, and heavy reliance on seeking justification of impugned transactions in the assessee’s hands vis-à-vis M/s CMJ Foundation, we deem it fit to set aside the impugned order and remand this matter to the file of Ld. AO for fresh assessment, with the following directions:

(i) The Ld. AO would segregate transactions done by M/s CMJ Foundation and grant relief, wherever due, from the earlier additions. However, loan transactions or any similar transactions which are claimed to be used by the assessee, would be examined with respect to their genuineness, etc.

(ii) The IDS declaration would be examined carefully and the sums declared there would be linked with dates, etc. to any gifts received by the assessee. The Ld. AO would be free to take any view, as per law, in case the cash transactions do not match.

& 78/GTY/2018 Chandra Mohan Jha (iii) The assessee would get relief on any amount added twice over in case it can be linked that a withdrawal in one account resulted in a consequent deposit in another.

(iv) The Ld. AO would enquire from CID, Meghalaya about the progress in their case and obtain any relevant document that they may have which could be useful in determining the correct income of the assessee, and also to see if any of the exceptions clauses could be triggered in the IDS done by the assessee’s son which may have a bearing on the transactions sought to be justified in that light.

(v) Investments in movable assets (mutual funds, etc.) and immovable assets would be examined for the reliability of sources of funds for these investments.

(vi) The Ld. AO would examine the Principal Officer of M/s CMJ Foundation for probing the genuineness of transactions with the assessee. Cong Eli would also be examined with respect to the claim that fees was collected and deposited in the assessee’s accounts by him/her.

Order pronounced on 02.12.2025