KIVITO SEMA,DIMAPUR vs. INCOME TAX OFFICER, WARD - 1, DIMAPUR, DIMAPUR

INCOME TAX APPELLATE TRIBUNAL : GAUHATI BENCH : GUWAHATI BEFORE SHRI MANOMOHAN DAS, HON’BLE JUDICIAL MEMBER AND SHRI RAKESH MISHRA, HON’BLE ACCOUNTANT MEMBER ITA No. 214 / GTY / 2024 AY: 2017-18 Kivito Sema The ITO, Ward-1, Dimapur H. No. 37, Pukhato Village, Kuhuboto Area PIN- 797112 (Nagaland) PAN: FGUPS2877A (Appellant) (Respondent)

Assessee By: Shri Ramesh Goenka, Advocate Respondent By: Shri Kaushik Ray, JCIT Date of Hearing: 10.03.2025 Date of Pronouncement: 18.03.2025

ORDER PER MANOMOHAN DAS, JM The assessee filed this appeal against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the “CIT-A”) dated 13.08.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year [AY] 2017-18.

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ITA No. 214 / GTY / 2024 Kivito Sema -Vs- The ACIT, Circle-2, Guwahati AY: 2017-18 The grounds of appeal of the assessee are as under:- (i) That the ld. Commissioner of Income Tax (Appeals) ought to have held that the transfer of the appellant’s case from the office of the Income Tax Officer, Ward-1, Dimapur to the office of the Income Tax Officer, Ward-3, Jorhat without passing any order U/s 127 of the Income Tax Act, 1961, by the appropriate authority was illegal, and therefore the consequent assessment order dated 31.12.2019 passed by the Income Tax Officer, Ward-3 Jorhat was without jurisdiction, illegal and liable to be quashed. (ii) That the ld. Commissioner of Income Tax (Appeals) ought to have held that on the basis of evidence produced before him, the appellant was eligible for benefit of provisions of section 10(26) of the Income Tax Act, 1961 as the appellant belonged to a Scheduled Tribe as defined under Article 366 of the Constitution of India. (iii) That both the Assessing Officer as well as the ld. Commissioner of Income Tax (Appeals) erred in treating the purported peak -credit of Rs. 28,86,905/- as income from other sources of the appellant. (iv) That neither the Assessing Officer was justified in making addition of Rs. 22,95,000/- U/s 69A of the Income Tax Act, 1961, on account of cash deposits made during the demonetization period and charging to tax U/s 115BBE of the Income Tax Act, 1961 nor the ld. CIT(A) was justified in sustaining addition to the extent of Rs. 17,95,000/- out of the same. (v) That the aforesaid addition of Rs. 17,95,000/- made U/s 69A of the Income Tax Act, 1961 as sustained by the ld. CIT(A) is contrary to the materials on record, based on irrelevant considerations and non-consideration of relevant material and therefore not sustainable either in facts or in law. 2. The brief facts of the case are that, the assessee deposited huge cash during the year under consideration and he did not file any return of income for the previous year 2016-17 relevant to the assessment year 2017-18 voluntarily before the due date for filing of return under section 139(1) of the Act or thereafter and since the substantial cash transaction in the assessee’s bank account was not matching with his profile available with the Income Tax Department, there was a strong reason to suspect that the appellant’s income was much higher than the maximum amount not chargeable to tax for the AY 2017-18 and he was liable to declare such income by filing a return and to pay tax on it. Therefore, a notice under section 142(1) of the Act was issued to the appellant on 22.12.2017 calling for the return of income. Several opportunities of being heard were given to the assessee, but there was Page 2 of 4

ITA No. 214 / GTY / 2024 Kivito Sema -Vs- The ACIT, Circle-2, Guwahati AY: 2017-18 no compliance on the part of the assessee. Hence, the ld. Assessing Officer [AO] completed the assessment under section 144 of the Act as under:- Total Income of the assessee as discussed in order Rs. 28,86,905/- Add: Unexplained money u/s 69A Rs. 22,95,000/- Assessed Rs. 51,81,905/- Being aggrieved, the assessee filed 1st appeal before the ld. 3. CIT(A). The ld. CIT(A) vide order dated 13.08.2024 partly allowed the appeal of the assessee. 4. Aggrieved, the assessee filed the present appeal before the Tribunal. 5. We observe that, the ld. CIT(A) has not accepted the claim of the assessee that his income is exempted from income tax due to non- filing of return of income under section 10(26) of the Act as also due to failure in discharging the duty of the assessee under section 69A of the Act before the ld. AO. The ld. CIT(A) observed that the ld. AO has rightly added to the income of the assessee. 6. We further observe that, the ld. CIT(A) allowed relief of Rs. 5,00,000/- to the assessee and the assessment was under section 144 of the Act. It is our opinion that, the assessee may get more relief if he gets another opportunity to substantiate his claims. 7. observe that, the assessee is a resident of the State of Nagaland and belongs to Tribal community who can claim exemption under section 10(26) of the Act by filing return of income and areas of income exempted from income tax by furnishing relevant evidences before the ld. AO if he gets another opportunity. Accordingly, we set aside the order of the ld. CIT(A) dated 13.08.2024 and remand the case of the assessee to the file of the ld. AO. We direct the ld. AO to reframe the assessment after giving the assessee an adequate opportunity of being Page 3 of 4

ITA No. 214 / GTY / 2024 Kivito Sema -Vs- The ACIT, Circle-2, Guwahati AY: 2017-18 heard as the assessee is resident of remote area of the State of Nagaland. The parties also have no objection in remanding the case of the assessee to the ld. AO for a fresh assessment. We direct the assessee also to substantiate his claims before the ld. AO. 8. In the result, the appeal of the assessee is allowed for statistical purposes only. Order pronounced in the open court on this 18th day of March, 9. 2025. Sd/- Sd/- (Rakesh Mishra) (Manomohan Das) Accountant Member Judicial Member Date: 18.03.2025 Copy forwarded to:- 1. Kivito Sema, H No. 37, Pukhato Village, Kuhuboto area, PIN- 797113 (Nagaland) 2. The ITO, Ward-1, Dimapur 3. The Pr.CIT 4. The CIT(A) 5. The DR 6. Guard file By Order

Assistant Registrar ITAT, Guwahati / Kolkata

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