SURESH JAT,BADNAWAR vs. THE INCOME-TAX OFFICER, DHAR, DHAR

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 a

second Appeal. The Assessee is aggrieved by the order

bearingNumber:-ITBA/NFAC/S/250/2025-26/1078511085(1)

dated 15.07.2025 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 year is 2016-17 and the

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corresponding previous year period is from 01.04.2015 to

31.03.2016.

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

147 rws 144/144B of the Act, the total income of the

Assessee was computed & assessed at Rs. 9,84,35,092/-.No

income tax return was filed. The addition on account of

unexplained money u/s 69A rws 115BBE of the Act was at

Rs. 9,80,10,563/-.There was yet another addition on the

account of interest under the head income from the other

sources at Rs. 4,19,451/-. There was yet one more addition

on the account of commission/brokerage under the head

income from other source at Rs. 5,078/-. The aforesaid

assessment order bears number:-ITBA/AST/S/147/2023-

24/1061442259(1) & that the same is dated 24.02.2024

which is herein after referred to as the “Impugned

Assessment Order”.

2.2 The Assessee is a Non-Filer during the year Under

Consideration despite having taxable Income.

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2.3 That the assessee had made various financial

transactions on the PAN allotted to it which are as under:-

1) The Assessee had deposited Cash of Rs. 52, 62, 900/-in

his bank account held with Axis Bank RS 14,94,000/ in his

bank account with held with the State bank of India and Rs

91,54,000/- in his bank Account-held with bank of Baroda

during the Financial Year 2015-16.

2) The assessee had received interest (Section 194A) of Rs.

4,19,451/- from Shri Omprakash Gupta and had also

received commission/brokerage (section 194H) of Rs. 5078/-

from the HDFC bank Ltd.

2.4 The transaction based upon the financial activity of the

assessee has been summarized in the data base of the Income

Tax Department. On the basis of analysis of this data the then

AO issued notice u/s 148A(b) vide dated 21.02.2023 and same

was duly served upon the assessee in time. Later on notice u/s

148 of the I.T. Act, 1961 dated 28.03.2023 was issued vide DIN

No. ITBA/ASST/S/148-1/2022-23/1051516250(1) and same

was delivered in due time.

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2.5 It is recorded in the “Impugned Assessment Order” as

under:

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2.6 It is also recorded in the “Impugned Assessment Order”

“after considering the facts available on record detailed

show cause 08.02.2024 has been issued and same is

reproduced as under:

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2.7 It is recorded in the “Impugned Assessment Order” that

since the assessee had not furnished any reply during the

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assessment proceedings. Hence the case completed as per

the provision of section 144(1)(6). It is also recorded in the

“Impugned Assessment Order” that “ it is evident and self

explanatory that the assessee has intentionally not filed

any details against the statutory notice including

specific questionnaire & Show cause notices regarding

deposits in bank account during the F.Y. 2015-16

relevant to A.Y. 2016-17 as to escape fron imposable tax

liability and hence failed to discharge his onus. Hence,

cash deposited amounting to Rs.9,80,10,563/- remained

unexplained income of the assessee during the year and

same is hereby treated as unexplained money under the

ownership of the assessee u/s 69A of the Act.

2.8 In the impugned assessment order in para 5 it is

recorded as under:

“5. xxx it is concrete evidence and crystal clear that the assessee intentionally resorted the delaying tactics so that the deposits of Rs.9,80,10,563/- ( 62,78,124+27,77.042+8,89,55,397) in the bank accounts so maintained with Axis Bank Limited, SBI & Bank of Baroda would be evaded and not liable to be taxed. Since, huge amount was deposited in the assessee's banks account & the assessee has failed to explain the source of deposited and the assessee

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completely failed to discharge its primary onus which lies only over the assessee for proving genuineness and correctness of source of such deposits and whether the assessee is the owner of the money or not. Thus, the provisions of aforesaid sections, the total deposit of Rs.9,80,10,563/- being in the bank accounts of the assessee amounting to Rs.9,80,10,563/- is hereby treated as unexplained money and added the same to the total income of the assessee u/s 69A r.w.s 115BBE of the Act for the year under consideration.”

2.9 In the “Impugned Assessment Order” the Ld. AO has

also recorded finding in respect of the Income of Rs

4,19,451/-which was received as interest income from "Sh.

Om Prakash gupta.” No reply to notice u/s142 (1). The

finding is also recorded in respect of income of Rs. 5078/-

which was received by the assessee as a

commission/brokerage from HDFC Bank. It was not

declared. Thus total income of Rs. 9,84,36,092/- was

determined in the In the “Impugned Assessment Order”

found exigible to tax.

2.10 That the assessee being aggrieved by the aforesaid the

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

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

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Order” has dismissed the first appeal of the assessee on the

grounds & reasons stated therein. The core ground &

reasons for the dismissed of first appeal are as under:-

“5.3. Vide Grounds 4, 5 and 6, the Appellant has objected to the additions of Rs. 9,80,10,563/-u/s 69A, undisclosed interest income of Rs.4, 19,451/- and undisclosed brokerage income of Rs.5078/- respectively. In this regard, I find that the Appellant has not submitted any details/explanation in support of these grounds of appeal. Non-submission of details were precisely the reasons for which the AO made the impugned additions. The Appellant has repeated the same behavior in the present proceedings as well. Non- submission of any details either before the AO or in the present proceedings, is indicative of fact that the Appellant has no explanation to offer explaining the source of cash deposits in the bank accounts and non-taxability of interest income and brokerage income received by the Appellant. The Appellant has simply submitted that since, AO has passed order u/s 144, the same may be set aside to the AO u/s 251(1)(a). This shows that the Appellant is in mistaken belief that all orders passed u/s 144 of the Act, has to be necessarily set aside to the AO u/s 251(1)(a) of the Act. In my considered opinion, this is not correct interpretation of section 251(1)(a). The said provision has simply given power to the CIT(A) to set aside cases to the AO wherein orders have been passed u/s 144. The said section does not make it mandatory to set aside all such cases wherein order has been passed u/s 144 of the Act. This provision has been introduced to mitigate hardships faced by the assessee in cases where the assessee could not furnish details before the AO due to bonafide reasons and has, furnished such details before the CIT(A), which prima facie, indicate that consideration of such submissions by the AO will do justice to the assessee. In the present case, I have already discussed above that the reasons for non-compliance to notices issued is not convincing since notices were sent on the email ID and also through registered post. Further, assuming that the Appellant could not furnish details before the AO since he could not receive notices, nothing

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prevented the Appellant to furnish such details in the present proceedings. However, the Appellant has failed to furnish any such details in the present proceedings inspite of providing sufficient opportunities vide issue of hearing notices u/s 250 of the Act. In view of the same, I do not deem it fit to set aside the case to the AO for fresh assessment. Further, in absence of any details/submissions in support of the grounds of appeal, the additions made by the AO are confirmed. Grounds are, thus, dismissed. 5.4. As regards Ground 7, the same pertains to levy of interest u/s 234A and B. This being consequential in nature, does not require any independent adjudication and hence, dismissed. 5.5. As regards Ground 8, since the Appellant has not added, altered, modified, any grounds of appeal taken by him before the date of final hearing, the ground is dismissed as not pressed. 6. In the result, the Appeal is dismissed.”

2.11 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 on the facts and in the circumstances of the case and in law, the 14. Assessing Officer erred in reopening the case of the appellant merely for verification of source of cash deposits in the bank accounts which tantamounts to making roving and fishing inquiries which is not permissible within the garb of reassessment proceedings under section 147 of the Act

2.That on the facts and in the circumstances of the case and in law, the Ld. Assessing Officer erred in reopening the case of the appellant merely on the basis of non-existent/factually incorrect reasons 3.That on the facts and in the circumstances of the case and in law, the Id. jurisdictional Assessing Officer erred in issuance of notice under section 148 of the Act even when such notice ought to have been issued from the faceless assessment unit and not by the jurisdictional Assessing Officer in light of the binding

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notification dated 29 March, 2022 (Notification No. 18/2022) issued by the Hon'ble CBDT which stated that any notice issued under section 148 of the Act on or after 29th March, 2022 should have been through automated allocation and in a faceless manner 4. That on the facts and in the circumstances of the case and in law, the Ld. Assessing Officer erred in making addition of Rs. 9,80,10,563/- to the total income of the appellant on account of cash deposited in the bank accounts by treating it as unexplained money under section 69A r.w.s. 115BBE of the Act without properly appreciating the facts of the case

3.1 The hearing in the matter took place 08.01.2026 before

this Tribunal when the Ld. AR for & on behalf of the assessee

appeared before us & has placed on record of this Tribunal

PB volume I from pages 1 to 80 & another PB volume II from

pages 81 to 97. It was interalia contended by the Ld. AR that

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the “Impugned Assessment Order” was an exparte order.

Hence bad in law, illegal & not proper. It is in the violation of

the principles of natural justice. It therefore ought to have

been set aside by the Ld. CIT(A) which has not happened.

With regard to the “Impugned Order” it was submitted that

written submissions were filed before the Ld. CIT(A) which

are at pages 81 to 85 of PB volume II. It was also submitted

basis page 86 of PB that notice(s) u/s 148,142(1) & show

cause notice(s) the e-mail id on record was of “Ashok

Surjan” who was counsel of the assessee & no notices came

to him from Ld. AO at e-mail id (1)

ashokesurjan19@yahoo.co.in (2) surjan102@gamil.com . We

were taken through the reply of the assessee before Ld. CIT(A)

dated 03.03.2025 pages 81 to 85 of PB volume II. Our

attention was specifically invited to page 84 A12, A13 which

is reproduced by us as below:-

“A.12) That in the present case ex-parte order was passed by the assessing officer. Hence, as per proviso of section 251 of the Income Tax Act, the Ld CIT(A) is empowered to set aside the case to the assessing officer for making fresh assessment. Relevant extract of provision of section 251 is as under: - 251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers-

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(a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment: [Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment;] A.13) That in view of the above, you are very kindly requested to set aside the assessment order as passed by the assessing officer exparte in absence of any submission of the appellant which was neither legal nor proper.”

Basis above the Ld. AR contended that the Ld. CIT(A) has

not set aside the “Impugned Assessment Order” & for

which he has the necessary powers now. A brief discussion

& debate took place on the powers of the CIT(A) in this

regard. It was submitted that PB in two volumes are now

placed on record of this Tribunal for the first time & hence

factual verification is required & for which the “Impugned

Order” should be set aside & the prayer was made that the

matter may be remanded to the Ld. AO for denovo

adjudication a fresh.

3.2 Per contra the Ld. DR appearing for the Revenue interalia

submitted that the “Impugned Order” & so also the

“Impugned Assessment Order” are legal, proper & valid.

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The intervention of this Tribunal is not required. All notices

referred in the orders of lower authorities went on portal & in

addition to this one notice amongst others mentioned in para

2 of the “Impugned Assessment Order” was sent by speed

post too. [This query was also raised by bench too]. It was

submitted by the Ld. DR for the Revenue that before the

CIT(A) in the statutory form no. 35 of the first appeal nothing

is filed which fact too is noted by the Ld. CIT(A) in his

“Impugned Order” It was then submitted that the legal

issues are dealt by the Ld. CIT(A) & dismissal of first appeal

is correctly made. The reliance was placed on compilation

which was placed on record on the Tribunal by the Ld. DR. It

was repeated & reiterated that both the “Impugned

Assessment Order” as well as the “Impugned Order” of the

Ld. AO & the Ld. CIT(A are in accordance with law by

following due process of law & the assessee has not

successfully assailed the orders of lower authorities on any

cogent grounds whatsoever. The orders of the lower

authorities are according to the provisions of law including

section 144 & section 250 of the Act. The opportunities were

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afforded & the assessee remained Non-compliant & even

on merits no contentions are canvassed before the CIT(A)

as is apparent perse. One notice has gone by speed post

& no satisfactory reply is given by the assessee which

fact should be noted by this Tribunal. Mere & bald

statements that notices were not received during

assessment proceedings is no ground to interfere with

the orders of lower authorities. Assessee is silent on merits

of additions. The hearing was then closed.

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 opinion that the

“Impugned Assessment Order” is under section 144 of the

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act & the matter has not been adjudicated & adjudged basis

merits of the case. Notices(s) supra have gone on e-

mail/portal & one notice (supra) has gone by speed post.

No valid explanation worth a credence has come forth

about service of notice(s) on portal & by speed post.

Merely averring that one Ashok suraj was counsel of the

assessee & his two ID’s are on record & that no notice(s)

have come from the Ld. AO perse is not sufficient to

discharge the onus of proof on part of the Assessee. No

positive material, no affidavits of assessee/assessee’s

counsel has been placed on record that notice(s) (supra)

issued by the Ld. AO were never received by assessee or his

counsel. In absence of any material on record we find

difficult to accept the submission made by the Ld. AR on this

score. Secondly we are not inclined to accept the submission

of the Ld. AR that since the “Impugned Assessment Order”

was under section 144 the Ld. CIT(A) ought to have

remitted back the matter back to the file of the Ld. AO. We

are afraid we cannot subscribe to this proposition

canvassed by the Ld. AR. The Ld. CIT(A) u/s 250

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discharges quasi-judicial function & every proceeding under

the act are judicial proceedings by virtue section 136 of the

act. No one can put fetters to the power of the CIT(A) & if the

proposition canvassed by the Ld. AR is accepted then section

144 would become redundant & otiose. Hence a discretion is

given to the Ld. CIT(A) as to whether he should remit the

matter to the Ld. AO if assessment order are u/s 144 as

asessee genuinely was not able to place material/evidence

before the ld. AO & that there is need for verification & it

however does not mean & it cannot be interpreted that in

each & every case of assessment order u/s 144 the issue

should be remitted back to the Ld. AO as a matter of right.

Earlier prior to amendment this power was not expressly

stated in the statute but w.e.f. 01.10.2024 a provision is

inserted u/s 251(1)(a) which reads as under:-[“ Provided

that where such appeal is against an order of assessment

made under section 144, he may set aside the

assessment and refer the case back to the assessing

officer for making a fresh assessment”]. The use of the

word “May” appearing in above proviso is not a mandatory

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provision of law but is directory in the nature & it is up to

the CIT(A) to exercise such power of remand or not back to

the file of the Ld. AO on cogent grounds only. It is not a

mandatory requirement in law that in each & every

assessment order u/s 144 the matter must be remitted back

to the Ld. AO as a rule. The contention of the Ld. AR in this

regard is meritless & is rejected.

4.4 We are of the considered view that in both the orders of

the lower authorities below i.e the Ld. AO & the Ld. CIT(A)

the real income of the assessee is not computed & assessed

basis merits of the case in ultimate analysis of things. The

assessment of income could not be adjudged & adjudicated

basis merits only for the reasons of non-compliance on the

part of the asessee before both the lower authorities. One

notice had gone by speed post too. Under these peculiar

facts & circumstances we direct the assessee to pay the cost

of Rs. 5000/- to the Department through a challan under

category others & for the cost of Rs. 5000/- upon payment

no credit of any type would be claimed by the assessee under

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this score, be it noted. This tribunal does not want clogging

of the matters before the lower authorities as same is

detrimental to the interest of economy as a whole.

We accordingly in order to meet ends of justice & so also the

fact that real income of the assessee is required to be

computed & assessed basis merits of the case set aside the

“Impugned Order” back to the file of the Ld. AO who shall

now pass a fresh order basis merits. The assessee is strictly

directed to give & to provide all the material information

documents, papers, evidences in support of his case & in

order to help Ld. AO to assess & compute total income of the

assessee exigible to tax according to law by following due

process of law provided in the act. The Ld. AO is directed to

pass a well reasoned & speaking order on merits after

assessee shows to him proof payment of Rs. 5000/- as cost.

4.5 In the premises drawn up by us, the “Impugned Order”

is set aside as & by way of remand back to the file of Ld. AO

with directions as aforesaid.

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5.1 In result the “Impugned Order” is set aside & matter is

remanded back to the file of Ld. AO on denovo basis with

directions as aforesaid appeals.

5.2 Appeal is allowed for statistical purpose.

pronounced in open court on 16.01.2026

Sd/- Sd/-

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

Indore Dated : 16/01/2026 Patel/Sr. PS 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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