ITO, W-1(3), VAISHALI, HAJIPUR vs. SHIV SHARAN SINGH, HAJIPUR

The Revenue is in appeal before the Tribunal raising the following grounds of appeal:

Brief facts of the case are that the assessee is an individual and derived income from salary working as a Professor at N. N. College and from other sources. The assessee did not file the return for the year under consideration. Information was received from Central Bank of India ITA No.: 524/PAT/2025 Assessment Year: 2014 Shiv Sharan Singh. about cash deposits in the savings bank account of the assessee bearing a/c no. 2310333874 with transaction made on the party name N. N. College and thus the Assessing Officer (hereinafter referred to as Ld. 'AO') determined that the said amount had escaped assessment. Accordingly, the case was reopened u/s 147 of the Act and notice u/s 148 of the Act was issued on 28.03.2021. The assessment order was passed after making the addition of ₹2,05,73,999/- while in the draft assessment order dated 12.03.2022 the addition proposed was for ₹1,04,04,266/-. Accordingly, the total income was assessed at ₹2,06,37,721/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who noted the fact that the assessee did not file the return of income for the impugned assessment year, considered the written submission of the assessee and decided the appeal as under: “On due consideration of the above set of facts assimilated and presented, it stands to reason that the grounds raised by the appellant relate to the basis of reopening of assessment and the merits of the addition and the consequent fallout by way of interest and penalty and the special rates of tax at which the tax liability came to be determined. On reopening except for the fact that the AO treated the credits in the impugned bank account as cash deposit which were later on found to be electronic transfer. But this would not in any way discredit the belief formed by the AO for the income escaping assessment, for the default lies only with the appellant for not having furnished the ROI for the impugned assessment year for which no reasons were assigned by the appellant at any point of time. Therefore, the connected grounds relating to reopening do not require any merits taking into account the appellant had travelled too far to raise any such objection without waking up at the right time. Nevertheless, justice is directed to be done in the other way round. On merits, it requires to be conceded that the AO failed to bring on record any evidence connecting the credits as representing the income of the appellant and did not bother to cause any enquiries in consequence thereof and was content with concluding the assessment recording that the appellant did not respond to the show cause notice. ITA No.: 524/PAT/2025 Assessment Year: 2014 Shiv Sharan Singh. Taking into account the fact that a similar exercise attempted by the revenue for the next assessment year 2015-16 fizzled out with the transactions routed through the bank account of the appellant for the funds transferred meant for defraying the cost to be incurred for construction of the building for the college, it is directed that the impugned credits the source for which could be directly linked to the institution in which the appellant had been serving for a long time cannot be taxed as unexplained credits in the hands of the appellant taking into account the evidence available on record and therefore requires to be deleted, with a caveat that the AO shall satisfy himself about the correctness of the facts already presented before him and reiterated in the assessments by going through the credits and the subsequent application thereof and assessing the income offered in the ROI u/s 148 at regular rates. This should not in any way be construed as setting aside the order for framing a fresh order of assessment by the AO. Accordingly, the appeal stands allowed for statistical purposes.” {emphasis supplied}

Aggrieved with the order of the Ld. CIT(A), the Revenue has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. It is contended that the Ld. CIT(A) has exceeded his juri iction as he directed the Ld. AO to satisfy himself and in effect had set aside the order yet did not formally set aside the assessment for de novo consideration and the Act does not empower the Ld. CIT(A) to remand matters partially but entirely. It is also contended that the Ld. CIT(A) accepted additional evidence in violation of Rule 46A of the Income Tax Rules, 1962 without affording sufficient opportunity to the Ld. AO.

We have considered the facts of the case, the submissions made and the documents filed. The Ld. CIT(A) upheld the reopening of the assessment order but directed the Ld. AO to grant relief in respect of the credits for which the source could be directly explained as relating to the institution in which the assessee had been serving for a long time and the same cannot be taxed as unexplained. The appeal stood allowed for ITA No.: 524/PAT/2025 Assessment Year: 2014 Shiv Sharan Singh. statistical purposes although this was not to be construed as setting aside the order for framing a fresh assessment order by the Ld. AO.

We have considered the facts of the case, the submissions made and the documents filed. Since additional evidence had been accepted which was not furnished before the Ld. AO and the order of Ld. CIT(A) is dated 19.02.2025 on which date, as per the proviso to section 251(1)(a) of the Act with effect from 01.10.2024, the Ld. CIT(A) was empowered to set aside the ex parte assessment order made u/s 144 of the Act and to refer the case back to the Ld. AO for making a fresh assessment, therefore, there was no justification for partially setting aside the order with certain directions. Hence, in view of the submission made, the order of the Ld. CIT(A) is hereby set aside and the matter is remanded to the Ld. AO to frame the assessment order de novo after granting an opportunity of being heard to the assessee and after considering the evidences to be filed and the submissions of the assessee. The assessee shall be at liberty to raise all legal issues before the Ld. AO as well who shall decide the same as per law. Hence, all the Grounds of appeal are partly allowed for statistical purposes.

In the result, the appeal filed by the Revenue is partly allowed for statistical purposes. Order pronounced in the open Court on 24th February, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 24.02.2026 Bidhan (Sr. P.S.) ITA No.: 524/PAT/2025 Assessment Year: 2014 Shiv Sharan Singh. Copy of the order forwarded to:

CIT-

CIT(DR), Patna Benches, Patna.

Guard File. //// By order