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

आदेश / O R D E R

Per Paresh M Joshi, J.M.:

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

“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 Page 2 of 18 A.Y.2017-18 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,

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

Page 4 of 18 A.Y.2017-18 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

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

Page 6 of 18 A.Y.2017-18 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.

(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

Page 8 of 18 A.Y.2017-18 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

Page 9 of 18 A.Y.2017-18 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 Page 10 of 18 A.Y.2017-18 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.

2. That, the Hon'ble Addl / JCIT (Appeal) has erred in law

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

Page 11 of 18 A.Y.2017-18 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.

4. That, the Hon'ble Addl / JCIT(Appeal), Faridabad has 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.

Page 12 of 18 A.Y.2017-18 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.

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. Page 13 of 18 Kamlesh Koushal A.Y.2017-18

and/or delete all or any of the above Grounds of Appeal.”

3. Record of Hearing 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

Page 14 of 18 A.Y.2017-18 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

Page 15 of 18 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.

4.2 We have carefully perused the records of the case and have heard the submissions.

Page 16 of 18 A.Y.2017-18 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.

Page 17 of 18 A.Y.2017-18 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.