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Facts
The assessee, Shree Tekchandji Maharaj Trust, failed to file its return of income for AY 2016-17. The Assessing Officer (AO) reopened the assessment under section 147 and added Rs. 1,11,38,732/- on account of unexplained cash deposits under section 69A, as the assessee failed to provide supporting documentary evidence.
Held
The Tribunal found that neither the assessment order nor the CIT(A)'s order was passed on merits and lacked proper reasoning. The Tribunal set aside both orders and remanded the matter back to the CIT(A) for a fresh adjudication on merits, expecting the assessee to cooperate fully.
Key Issues
Whether the cash deposits were unexplained and additions were justified, and whether proper opportunity of hearing was provided.
Sections Cited
147, 148, 69A, 142(1), 250, 253
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
second Appeal. The Assessee is aggrieved by the order bearing Number:-ITBA/NFAC/S/250/2025-26/1076353113 (1) dated 21.05.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned
Factual Matrix 2.1 That as and by way of an Assessment order made u/s 147 rws 144B of the Act, the total income of the Assessee was computed & assessed at Rs. 1,11,38,732/-. The assessee was non filer. The addition/variation in respect of issue of cash deposit u/s 69A is at Rs1,11,38,732/-. The aforesaid Assessment order bears No. ITBA/AST/S/147/2023-24/1062488084 (1) & that the same is dated 12.03.2024 which is herein after referred to as the “Impugned Assessment Order”.
2.2 That based on information, the assessee did not file its return of income u/s 139(1) for A.Y. 2016-17. The case of the assessee was re-opened u/s 147 of the Income-tax Act, 1961 and a notice u/s 148 was issued on 17.03.2023 after obtaining necessary approval of the Income tax Act, 1961. In response to notice u/s 148 of the Act, the assessee has filed
Page 2 of 18 2.3 The department of income tax had following information:-
Sr. Nature of Transaction Amount/transaction value(Rs.) No. 1 Cash deposits - saving Bank 1,11,38,732/- A/c no.60164513699 of bank of Maharashtra, Branch- Shivaji Nagar, Pune
2.4 It is recorded in the “Impugned Assessment Order” that a show cause notice u/s 148A(b) of the Act was issued to the assessee. However no explanation was given by neither the assessee nor any objection with regard to escapement of income (Supra) was given too. Accordingly order u/s 148A(d) was passed on 17.03.2023.
2.5 It is also recorded in the “Impugned Assessment Order” that following opportunities were given to the assessee which is reproduced by us as below:-
2.7 In para 2.4 of the “Impugned Assessment Order” following is recorded by the Ld. AO which is reproduced by us as below:-
“2.4. Vide show cause notice issued to the assesseeon 21.02.2024 and the following details/ clarification sought: Under the facts and circumstances of the case, the income to the extent of Rs. 1,11,38,732/- has escaped assessment for the assessment year 2016-17 and the same is proposed to be treated as unexplained money w/s. 69A of the Income-tax Act, 1961. Since you have failed to discharge the onus to prove the genuineness of the transactions of cash deposited Rs. 1,11,38,732/- maintained with Bank of Maharashtra Account No 60164513699 and you have failed to produce any documentary evidence in respect of Trust Registration. As per your submission, there are no amendments in trust deed and the trust is not registered u/s 12A and 80G of the Act. In this regard, you are hereby given an opportunity to show cause as to why the cash deposits appearing in the Bank of Maharashtra Account No. 60164513699 totalling to Rs. 1,11,38,732/- should not be treated as unexplained money as per the provision of section 69A of the Income Tax Act, 1961 and added to the total income and brought to tax under section 115BBE of the Act and deemed to be your income for such financial year i.e. F.Y. 2015-16 relevant to A.Y. 2016-17 The reply to this show cause notice should reach this Assessment Unit on or before the date mentioned above. If you fail to avail the opportunity being given to explain your case and reply to the show case notice on or before the date mentioned above, it will be presumed that you have nothing further to state in the matter and in case of such an eventuality, appropriate orders will be passed in the matter on the basis of material available on record, without any further reference, which may kindly be taken note of..." However, the assessee has failed to submit complete details as per the said notices till date. The assessee was required to submit the response within the stipulated time stating either to(a) accept the proposed variation (b) File written reply objecting to the proposed variation or (c) if required; in addition to filing written reply, a request for personal hearing so as to make oral submission through 'Seek Video Conferencing button available against the Show Cause Notice. However, it is pertinent to mention here that the assessee failed to file supporting documentary evidence or make oral submission through 'Seek Video Conferencing button available against the Show Cause Notice. Further, the assessee has requested for video conference on 24.02.2024 to explain his side with regard to the issues involved in the e-assessment proceedings. The video conference was scheduled on 29.02.2024 at 1.30 PM. Vide this office letter dated
27.02.2024. In the video conference the representative of the assesse has attended on behalf of the assesse and explained its side with regard to the issues involved in the e-assessment proceedings.”
2.8 The Ld. AO in the “Impugned Assessment Order” has also recorded as follows:-
“However, the explanation filed by the assessee was not found plausible for want of supporting documentary evidences corroborating his claim. Documentary evidence regarding the genuineness of receipt of cash in respect of donation, if any, was not filed. Further no evidence was filed in respect of Trust Registration details ie. Charity Commissioner Certificate, Certified copy of Registered Trust Deed received from Charity commissioner, 12A/80G etc. by the assessee to establish their genuineness and creditworthiness of the transactions made during the year. As per the details filed by the assessee after the video conference scheduled, the Trust is a religious one and engaged in construction of Dharamshala but when asked about Trust registration, no answer except assesse admitted that still the process of Registration is not completed and don't have any Registered documents i.e. Copy of Charity commissioner Certificate, latest Certified copy of Trust Deed from charity commissioner, Copy of 12A or BOG certificate, details of Corpus fund along with supporting documentary evidence etc except a Trust Deed. Further, it is also noticed that the trust being operated is still not Registered under 12A or 80G of the Act. In the case of assessee, it has been accepted that all the cash deposited of Rs. 1,11,38,732/- in the account of Bank of Maharashtra is Corpus Fund but no legal proof is available in the context of the Corpus fund.
The submission so made by the assessee have been examined and it has been found that the assessee made cash deposits amounting to Rs. 1,11,38,732/- in Bank of Maharashtra but has failed to furnish a plausible explanation along with supporting documentary evidence in respect of source of the cash deposits of Rs. 1,11,38,732/- and the same has escaped assessment as the assessee has failed to file its return of income for the assessment year under consideration.”
“4.1 Summary of information evidence collected after SCN :NIl 4.2 upon: NIL Point-wise rebuttal of reply of the assessed including analysis of any case law relied upon: NIL”
2.10 The Ld. AO in the final conclusion drawn in the “impugned Assessment order” has observed & held as under which is reproduced by us as follows:-
“4.3 Conclusion drawn: In the present proceeding, the information has been analysed with respect to Cash deposit of Rs. 1,11,38,732/- exist in Bank of Maharashtra Account No 60164513699 during the F.Y. 2015-16 relevant to A.Y. 2016-17, The onus is on the assesse to explain the nature and source of cash deposits made with bank accounts maintained with Bank of Maharashtra during the year under consideration along with supporting documentary evidence. On verification of details available on record, it is seen that the assessee has failed to submit any supporting documentary evidence with regard to escapement of income as discussed supra and as informed vide show cause notice within the stipulated time. Thus, it was clearly established that the assessee did not have any explanation to offer and income has been escaped for the year under consideration, which was exceeding Rs. 50 lakhs, represented in the form of asset. Therefore, the cash deposits made by the assessee of Rs. 1,11,38,732/-remain unexplained and added to the total income as unexplained money u/s 69A of the Act. Accordingly, penalty proceedings u/s 271(1)(c) of the Act are initiated separately for concealment of particulars of income. Penalty proceedings u/s.271F of the Act has been initiated separately for Non-filer for the A.Y 2016-17.”
2.11 The Assessee being aggrieved by the “Impugned Assessment Order” Order” prefers the first appeal u/s 246A
Page 10 of 18 A.Y.2016-17 of the Act before the Ld. CIT (A) who by the “Impugned Order” has dismissed the first Appeal of the assessee on the grounds & reasons stated there in. The core grounds & reasons for the dismissal of the first appeal were as under:-
“3.The grounds of appeal are read as under- "1. Ld. AO has treated cash deposits as unexplained money u/s.69A of the Income Tax Act, 1961, which is unjustified and liable to set aside."
4. Ground No.1 pertains to the single issue of addition of cash deposits of Rs. 1,11,38,732/- on account of unexplained money u/s.69A of the Act and the same is adjudicated as under :- 4.1. During the assessment proceedings, the AO issued notice u/s 142(1) of the Act to explain nature & source of cash deposits made amounting to Rs. 1,11,38,732/-made in the Bank of Maharashtra savings account. In view of this fact, the assessee failed to justify the claim of cash deposits with supporting documentary evidences. In view of this fact, failure to comply to the notices issued, the AO concluded the assessment thereby adding the cash deposited amount of Rs. 1,11,38,732/- as unexplained money u/s.69A of the Act to the total income of the assessee for the year under consideration.
5. During the appellate proceedings, the appellant was issued a number of notices for filing the submission in respect of the ground of appeal filed by the assessee. However, the assessee merely in Form 35 has filed its submission thereby stating as under.-
1. Assessee is trust registered under Indian Trust Act 1882, also maintaining Dharamshala in the name of Shree Radha Krishna Mandir Darji Dharamshala at Ujjain.
2. The case was reopened U/s 147 of the Income tax Act 1961 due to return was not filed U/s 139(1) of the Income tax Act
3. Notice U/s 148 of the income tax Act was issued
4. On the basis of NMS information of cash deposits of Rs. 1,11,38,732, the case was opened.
5. A Income tax return was filed in response Income tax Act. in response to notice U/s 148 of the 6. In response to notice U/s 142(1) of the Income tax Act a reply has been submitted before the assessment unit. A reply has been submitted along with all supporting evidences.
The trust was receiving corpus donations for construction of Dharamshala, evidences of all such corpus donation and trust registration has been submitted. All cash deposits has been recorded in books of accounts and also the books were audited by CA.
Case laws referring to the non taxability of corpus donation has also been given.
The assessment unit has not considered the corpus donations and mentioning that Trust is not registered U/s 12AA of the Income tax Act.
As the trust is constructing dharamshala during the FY 2015- 16, activity is not started hence trust is not registered U/s 12AA of the Income Tax Act.
All the documents, information has been available to the Officer during Video Conferencing also.
Total income assessed was Rs. 1,11,38,732 U/s 69 of the Income Tax Act 13. Penalty U/s 271(1)(c) and U/s 271F of the Act was initiated 5.1. On going through the aforesaid submission of the assessee it can be seen that the assessee has stated that the trust was receiving corpus donations for construction of Dharamshala and evidences of the donation and trust registration had been submitted. However, it can be seen that the assessee has merely filed appeal on the ground of unexplained cash deposits, but has not filed any submission regarding the same. The assessee was issued a number of notices for submitting the documentary evidences in support of its claim which the assessee failed to do so during the appellate proceedings. The assessee did not submit the receipts of cash received in respect of donation. Further, it was seen that the assessee did not file the registration certificate received from the Charity Commissioner, copy of Registered Trust Deed u/s 12A/80G for establishing the genuineness and creditworthiness of the transactions made during the year under consideration. The assessee was required to file the confirmation from the persons from whom the donation was being received which the assessee failed to furnish during the assessment as well s appellate proceedings. 5.2. The assessee was required to justify its claim by providing necessary documentary evidences regarding the amount of Rs. 1,11,38,732/- deposited in the savings bank account maintained with Bank of Maharashtra, Pune. However, no requisite clarification in respect of the same was received. Thus the appellant is only making a story to cover up the unexplained cash deposits made in its bank accounts during the year under consideration. Thus the appellant had failed to discharge its onus under section 69A of the Act. Hence, the addition made by the AO
Page 12 of 18 A.Y.2016-17 of Rs. 1,11,38,732/- as unexplained money u/s.69A of the Act is confirmed. Accordingly, Ground Nos. 1 is hereby dismissed. 6. In the result, the appellant's appeal is DISMISSED.”
2.12 The Assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this tribunal & has raised following grounds & appeal in the form no. 36 against the “Impugned Order” which are as under:-
“Ld. AO has treated cash deposits of Rs. 1,11,38,732 which is recorded in audited books of accounts as an unexplained money u/s 69A of the Income Tax Act, 1961, which is unjustified and liable to set aside, also proper opportunity of being heard was not provided.”
2.13 The assessee in the statement of facts filed with appeal memo has stated as under:-
“During the assessment proceedings, the AO issued notice u/s 142(1) of the Act to explain nature & source of cash deposits made amounting to Rs. 1,11,38,732/- made in the Bank of Maharashtra savings account. In view of this fact, the assessee failed to justify the claim of cash deposits with supporting documentary evidences. In view of this fact, failure to comply to the notices issued, the AO concluded the assessment thereby adding the cash deposited amount of Rs. 1,11,38,732/-as unexplained money u/s.69A of the Act to the total income of the assessee for the year assessee has stated that the trust was receiving corpus donations for construction of Dharamshala and evidences of the donation and trust registration had been submitted. It was also stated that The assessee was required to justify its claim by providing necessary documentary evidences regarding the amount of Rs. 1,11,38,732/- deposited in the savings bank account maintained with Bank of Maharashtra, Pune. The appeal was dismissed without giving proper opportunity of being heard.”
Record of hearing 3.1 The hearing in the matter took place before this Tribunal on 14/01/2026 when the Ld. AR for & on behalf of the assessee appeared before this tribunal & interalia contended that the “Impugned Order” is bad in law illegal & not proper.
The “Impugned Order” is passed in the violation of the principles of natural Justice. The “Impugned Order” is ex- parte one. It was further submitted that though two opportunities were afforded by the Ld. CIT (A) to the Assessee & on both the occasions adjournment were sought.
Para 5.1 of the “Impugned Order” at internal page 5 was readout before this tribunal. A copy of the screen shot was placed on record. It was submitted that one adjournment request and/or response was filed on the first occasion. The Ld. AR emphasised that it was an adjournment application.
The ld. AR in the ultimate analysis of her arguments stated that it would be just & fair that the matter be remanded back to the CIT(A). Per contra the Ld. DR appearing for and on behalf of the Revenue contended that department has no Page 14 of 18
Observations Findings & conclusions 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.
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 144B of the Act & and the matter in the final analysis para 4.3 of the “Impugned assessment Order” wherein the conclusion is drawn by the Ld. AO has not adjudicated & adjudged basis merits of the case. Even the “Impugned Order” basis para 5.1 is not on merits as no documentary evidences and relevant material information details etc were placed before the Ld. CIT(A). This Tribunal time and again has emphasised
Page 15 of 18 A.Y.2016-17 that the total income of the assessee should be computed and assessed on the real time basis exigible to tax and that too in accordance with Law by following the due process of law prescribed under the Act. This tribunal desires both the “Impugned assessment Order” as well as the “Impugned Order” on merits. Both the orders of the lower authorities must be speaking one & reasoned too. This tribunal expects the assessee to be compliant too & in this regard the assessee should cooperate with the revenue, as & when notice(s), summons etc are issued. The assessee’s cooperation in this regard assumes importance. Assessee cannot go in slumber mode. In the analysis of the present case we are of the considered the view that the “Impugned Order” should be set aside & matter should be remanded back to the file of the Ld. CIT(A) for passing a fresh order on denovo basis, which order should be on merits of the case. It should be speaking & reasoned one. It is the expectation of the this tribunal that assessee would give his full and complete details of income & shall file all material, evidences, documents, books of accounts, bank statements details of Page 16 of 18 A.Y.2016-17 sources of cash deposit, identity genuineness of transaction of persons from whom amounts in cash was received and deposited in bank, utilization if any of such amounts etc.
The assessee to attend the hearing as & when fixed, file detailed submission, reply and provide all the details as would be sought by Ld. CIT(A). The Ld. CIT(A) is at full and complete liberty to pass appropriate order under section 250 of the Act a fresh. The Ld. CIT(A) is also it full and complete liberty to conduct such inquiry and verification as he/she deems fit for proper adjudication of the first appeal on denovo basis. The Ld. CIT(A) may call for a remand report if he/she desires in the fitness of things. In brief this tribunal desires meritorious disposal of first appeal. It is expected that assessee in this round of litigation would cooperate with the department.
4.4 In the premises drawn up by us, We set aside the impugned order as and by way of remand to Ld. CIT(A) on denovo basis with directions as per para 4.3 above.
Page 17 of 18 5.2 Appeal of assessee allowed for statistical purpose. pronounced in open court on 30.01.2026.