KAMLESH KOUSHAL,INDORE vs. INCOME TAX OFFICER, 1(2), INDORE

आदेश / O R D E R

Per Paresh M Joshi, J.M.:

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ herein after referred to as the Act for

the sake of brevity] before this Tribunal as & by way of second

appeal. The Assessee is aggrieved by the order bearing Number:-

ITBA/APL/S/250/2024-25/1075202299(1) dated 28.03.2025

passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after

referred to as the “Impugned order”. The relevant assessment

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year is 2017-18 and the corresponding previous year period is

from 01.04.2016 to 31.03.2017.

2.1 That as and by way of an “ Assessment order” made u/s

144 of the Act, the total income of the assessee was computed &

assessed at Rs. 5,62,071/-. The income as per ROI filed for AY

2017-18 was Rs. 0/-. The addition of Rs. 5,62,071/- was made

as unexplained money u/s 69A of the Act by virtue of para 12 of

the aforesaid assessment order which is reproduced by us as

below:-

“12. The assessee has made cash deposits amounting to

Rs.4,06,000/- other Credit entries appearing in bank

account of Rs. 1,56,071/- thereby total amounting to

Rs.5,62,0711-(Table:4) appearing in the Jila Sahakari

Kendriya Bank Maryadit, Double Chouki, Distt. Dewas,

Punjab & Sind Bank, Double Chouki Branch, Distt.

Dewase accounts of the assessee in the F.Y.2016-17

relevant to A.Y.2017-18 remained unexplained. The

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assessee has not filed his ITR, not declared his true

income and has not paid taxes due thereon. The assessee

has not responded to notices u/s 142(1) of the I.T. Act,

1961 and show cause notices issued during E-assessment

proceedings (Table:2). the assessee has failed to comply

with the notices u/s 142(1) of the Income Tax Act, 1961

issued and served upon the assessee during the course of

E-scrutiny proceedings, thus penalty u/s 272A(1)(d) of the

Act was initiated and show cause notice u/s 274

r.w.s.272A(1)(d) of the I.T. Act, 1961 was issued to the

assessee on 20/09/2019 and fixing the hearing on

24/09/2019. But on this date none appeared nor any

written submission filed by the assessee. The assessee

failed to give any explanation about the nature and source

of cash deposits, hence the value of Credit entries,

including cash deposits, appearing in the Jila Sahakari

Kendriya Bank Maryadit, Double Chouki, Distt. Dewas,

Punjab & Sind Bank, Double Chouki Branch, Distt. Dewas

as tabulated in the body of the Order (Table:4) is deemed

as unexplained money u/s 69A of the Income Tax Act,

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1961 and added to the Total Income of the assessee. The

total income assessed is taxed u/s 115 BBE of the Act at

the rate of 60%.”

That the aforesaid “Assessment order” bears No.

ITBA/AST/S/144/2019-20/1021206429(1) & that the same is

dated 27.11.2019 which is herein after referred to as the

“Impugned Assessment Order”.

2.2 That the assessee being aggrieved by the aforesaid

“Impugned Assessment Order” prefers the first appeal u/s

246A of the Act before the Ld. CIT(A) who by the “Impugned

Order” has dismissed the 1st appeal of the Assessee on the

grounds & reasons specified therein. The core grounds & reasons

for the dismissal of the 1st appeal were as under:-

“4.0 Determination & Decision: All the facts of the case,

assessment order of the AO and contentions raised by the

appellant have been carefully perused and considered.

Having considered the factual matrix of the case, I find

that the addition of Rs. 5,62,071/- was made by the AO

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as there were no satisfactory response received from the

appellant to various notices/SCN issued by the AO. I also

find that the additions made by the AO are based on

rational evidence's such as bank statements and

information gathered by issuing notice u/s 133(6) of the

Act to bank.

4.1 It is observed that the appellant has submitted

additional evidence during the appellate proceedings, but

at S. No. 12 & 12.1 of Form-35, the appellant has offered

'No' comments. Further, the appellant could not

demonstrate the circumstances under which he was

prevented by sufficient cause from producing the evidence

before the AO which are now being furnished before this

office. In this regard, it is pertinent to note that the

appellant cannot be permitted to take advantage of his

own illegal acts, and it is his duty to place all facts

truthfully before the assessing authority. In the present

case, the appellant was given sufficient opportunity of

being heard on various dates by the AO, but the appellant

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did not comply on most of the dates. The fundamental rule,

which is valid in all branches of law, including Income Tax

Law, is that the appellant should adduce the entire

evidence in his possession at the earliest point of time.

This ensures full, fair and detailed enquiry and

verification. A Seven-Judge Bench of the Supreme Court in

Keshav Mills Co. Ltd. vs. CIT (1965) 56 ITR 365 (SC) had

observed as under:

"Proceedings taken for the recovery of tax under the provisions of the Act are naturally intended to be over without unnecessary delay, and so, it is the duty of the parties, both the Department and the assessee, to lead all their evidence at the stage when the matter is in charge of the ITO."

4.2 It is for the aforesaid reasons the Rule 46A of the

Income Tax Rules, 1962 starts in a negative manner by

saying that an appellant before the CIT(A) shall not be

entitled to produce before him any evidence, whether oral

or documentary, other than the evidence's adduced by him

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before the AO. Further, few exceptions have been carved

out, wherein certain circumstances, it would be open to

CIT(A) to admit additional evidence. Therefore, additional

evidence's can be produced at the first appellate stage

when conditions stipulated in the Rule 46A of the Income

Tax Rules, 1962 are satisfied.

4.3 Further, the purpose and purport of Rule 46A of the

Income Tax Rules, 1962, is that the appellant is required

to explain and justify as to why the evidence could not be

produced in the assessment proceedings before the AO,

and reasons and justification for producing the evidence

for the first time before this office. However, in the present

case, on perusal of order, I find that AO had not refused to

admit evidence so Rule 46A(a) of the Income Tax Rules,

1962, so this is not applicable in the case of the appellant.

In support of Rule 46A(b) of the Income Tax Rules, 1962, it

is observed that the appellant did not file any evidence in

support of sufficient cause for not producing the evidence

before the AO.

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Hence, the appellant's case does not fall under any

of the circumstances as mentioned under Rule 46A(1) (a),

(b), (c) and (d) of the Income Tax Rules, 1962. Accordingly.

I am of the considered view that the additional evidence's

filed by the appellant are not found to be admittable under

Rule 46A of the Income Tax Rules. 1962.

4.4 Further, the merits of the additions made by the AO

are to be decided on the basis of materials available to the

AO at the time when the aforesaid assessment order was

passed. The question whether the assessing authority has

committed any error in his judgment u/s 144 of the Act

can be decided only on the basis of the materials gathered

by him and not on the basis of any materials that are later

produced by the appellant.

4.5 On perusal of the assessment order, I find that the

assessee had deposited cash of Rs. 4,06,000/- and other

credit entries of Rs. 1,56,071/- appearing in bank account

during the Financial Year 2016-17 relevant to the

Assessment Year 2017-18. The assessee has not offered

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any satisfactory explanation regarding the source of such

cash deposits. The assessee has also not submitted any

cogent and reliable evidence in this regard as concluded

by the AO. During the submission filed in appellate stage,

the assessee submitted that the only source of income of

the appellant was agricultural income, which is exempt in

nature. In the absence of any cogent reason backed by

sufficient evidence, the explanation of the appellant is only

a make-believe story and hence cannot be accepted.

4.6 It is important to note here that it was the prime

responsibility of the appellant to explain the nature and

source of cash deposit in his bank account(s) with

necessary supporting evidence. However, the appellant

has completely failed to discharge his onus as per law.

Moreover, Section 69A of the Act deals with money etc.

owned by the assessee and found in possession including

in the bank accounts of the assessee which remained

unexplained. As the assessee was found owner of the

money and not offered any acceptable and cogent

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explanation regarding the source of such money found in

his bank accounts, the AO has rightly treated the same as

unexplained income of the assessee u/s 69A of the Act.

4.7 Therefore, the addition on account of cash deposits

of Rs. 5,62,071/- as unexplained money u/s 69A of the

Act is confirmed.

5.0 In the result, the appeal is dismissed.”

2.3 That the assessee being aggrieved by the “Impugned Order”

has preferred the instant second appeal before this Tribunal &

has raised the following grounds of appeal in the Form No. 36

against the “Impugned Order” which are as under:-

“1. That, as per the provisions of section 246(5) read with e-

Appeal Scheme, 2023, the JCIT(Appeal) functioning

under National Faceless Appeal Centre is required to

conduct appellate proceedings in a faceless manner

without disclosing name and location of the authority

and therefore, Ms. Naina Karol, Hon'ble AddI /

JCIT(Appeals), Faridabad has erred in passing the

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impugned order dated 28/03/2025 by disclosing name

and location of the appellant authority. The appellant

prays that the impugned order 28/03/2025 being

contrary to the procedure laid down under section 246(5)

read with e-Appeal Scheme, 2023 deserves to be

quashed / set aside.

in passing the impugned order dated 28/03/2025

without giving an opportunity of personal hearing as

provided in clause 13 of e-Appeal Scheme, 2023 despite

specific request made by the appellant and therefore,

the appellant most humbly prays that the impugned

order dated 28/03/2025 deserves to be quashed / set

aside as being violative of principles of natural justice.

JCIT (Appeal), Faridabad has erred in confirming the

addition of Rs.5,62,071/- pertaining to cash (deposited

during demonetization) and other credits in the bank

account as unexplained income under section 69A of the

Income Tax Act and has further erred in ignoring the fact

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that the appellant is a farmer and having only source of

income out of agricultural activities. The appellant

therefore, most humbly prays that the impugned

addition of Rs. 5,62,071/- made under section 69A may

kindly be deleted.

erred in rejecting the documentary evidence filed during

the appellant proceedings treating the same as

additional evidences under Rule 46A of the Income Tax

Rules, 1962 and has further erred in appreciating the

facts on record that some documentary evidences were

already filed before the assessing officer and therefore,

Hon'ble Addl/JCIT(Appeal), Faridabad ought to have

considered the same before passing the impugned order

dated 28/03/2025. The appellant most humbly prays

that the impugned order dated 28/03/2025 as also the

addition of Rs. 5,62,071/-, therefore, deserves to be

quashed deleted /set aside on this ground also.

Appeal to e-Appeals Scheme, 2023 requires the appellate

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authority to send the additional evidence to the

assessing officer for furnishing a report on the

admissibility of additional evidence in accordance with

Rule 46A of the Rules and therefore, the Hon'ble

Addl/JCIT(Appeals) has erred in rejecting the appeal

without calling for such report. The appellant therefore

most humbly prays that impugned order dated

28/03/2025 as also the addition of Rs. 5,62,071 made

without compliance of the procedure laid down in clause

6 to e-Appeals Scheme, 2023 deserves to be

quashed/deleted / set aside on this ground also.

rejecting the additional evidence which goes to the root

of the addition made and the reasons therefore and

therefore, in the interest of justice, the Ld. Addl /

JCIT(Appeals) ought to have considered and admitted

the additional evidence filed by the appellant as per

Rule 46A of the Income Tax Rules, 1962.

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and/or delete all or any of the above Grounds of

Appeal.”

3.1 The hearing in the matter took place before this Tribunal on

23.02.2026 when the Ld. AR for & on behalf of the Assessee

appeared before us & inter alia contended that the “Impugned

Order” is bad in law, illegal & not Proper. It is in the violation of

the principles of natural justice. It therefore deserves to be set

aside. It was next contended that there is delay of 79 days in

filling the instant second appeal. It was submitted that the

“Impugned Order” is dated 28.03.2025 whereas date of filling of

the instant second appeal was on 21.08.2025 & the instant

appeal ought to have been filed within the time prescribed under

the Act & Rules. An application for the condonation of delay

dated 13.08.2025 is placed on record along with an affidavit in

support dated 13.08.2025 of the assessee. The reason of delay

has been attributed to erstwhile counsel who had not informed

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the assessee about the disposal of the first appeal consequently

the delay occurred. The delay also occurred due to the fact that

the assessee was collecting the relevant documents which were

required for preparing & filling the present appeal before this

Tribunal. Time was also spent in seeking legal consultation. An

affidavit in support is too placed on record affirming the contents

of the delay application. Per contra the Ld. DR appearing for &

on behalf of the revenue submitted that the issue of delay is left

to the wisdom of this Tribunal. We after hearing both the parties

& upon careful perusal of record & further so also upon

appreciating the rival contentions are of the considered opinion

that the delay is bonafidely incurred & for which sufficient cause

has been shown. Accordingly, we condone the delay. The appeal

is admitted & taken up for hearing.

3.2 It was then submitted by the Ld. AR that Return of

Income was not e-filed u/s 139 of the Act. The Ld. AR has placed

on record of this Tribunal a paper book containing pages 1 to

filed on 22.11.2019 in response to notice u/s 142(1) of the Act

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dt. 31.05.2019 wherein the total income as ROI is Rs. 1991/-.

Net agricultural income is Rs. 4,05,650/-. Our attention was

invited to page 17 of the PB to demonstrate that a reply dt.

21.08.2019 was filed before the Ld. AO. It was prayed that since

the the “Impugned Assessment Order” is under section 144 of

the Act, it would be just, fair & convenient that all their

submissions which were made before the AO which are

demonstrated in the paper book be considered afresh by setting

aside the “Impugned Order” & remanding it back to the file of

the Ld. AO on denovo basis. Per contra, the Ld. DR appearing for

the revenue has left the issue in this regard to be decided by this

Tribunal basis its wisdom.

4.1 We have to decide the legality, validity and proprietary of the

“impugned order” basis records of the case & the rival submission

canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

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4.3 We basis records of the case & after hearing & upon

examining the rival contentions of the Ld. AR & the Ld. DR

canvassed before us, are of the considered view that the

“Impugned Assessment Order” is under section 144 of the Act.

Basis paper book we observe & notice that on page 12, there is

notice u/s 142(1) of the Act dated 09.08.2019 & basis page 17

there is reply by the assessee dt.21.09.2019 with enclosures

therein. During the course of the hearing, the Ld. AR has eagerly

submitted that the assessee ROI [ P.B.pages 51-72 as noticed by

us] be considered, assessee reply dt. 21.03.2019 be considered

(as noticed by us PB page 17-47) including other submissions

afresh which request is fair & justifiable. Even the Ld. DR for the

revenue has stated that all these material & documents can be

considered afresh in denovo proceedings. In view of these facts &

circumstances, we deem it fit to set aside the “Impugned Order”

& remand the case back to the file of Ld. AO on denovo basis. We

direct assessee that all relevant information, material,

documents be furnished to the Ld. AO in a time bound manner.

The Ld. AO is directed to pass a fresh order in accordance with

law after giving assessee a reasonable opportunity of hearing.

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4.4 In the premises drawn up by us, we set aside the impugned

order & remand the case back to the file of the Ld. AO on denovo

basis, who shall now pass a speaking & well reasoned order.

5 Order

5.1 In the result, the impugned order is set aside as & by way of

remand back to the file of the Ld. AO.

5.2. The appeal of Assessee is allowed for statistical purpose.

Pronounced in open court on 06.03.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 06 /03/2026 SN

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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