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Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR
Before: SH. KUL BHARAT & SH. NIKHIL CHOUDHARY
A.Y. 2016-17 Asha Baderia, vs. ITO, 1752, Saraswati Colony, Cherital Ward-1(1), Jabalpur Ward, Jabalpur, M.P.-482002 PAN:AJEPB7660E (Appellant) (Respondent) Assessee by: Sh. Rahul Bardia, C.A. Revenue by: Sh. Shravan Kumar Meena, CIT DR Date of hearing: 19.09.2025 Date of pronouncement: 30.09.2025 O R D E R PER NIKHIL CHOUDHARY, A.M. This is an appeal filed by the assessee against the order of the ld. Addl/JCIT(A)-1, Nasik dated 14.11.2024 passed under section 250 of the Income Tax Act dismissing the appeals of the assessee against the orders of the ld. ITO, Ward-1(1), Jabalpur, passed under section 143(3) of the Income Tax Act on 29.12.2017. The grounds of appeal are as under:- “1. The order passed by the Ld CIT (A) supporting the order of Ld AO is bad in law and facts, void ab initio and with jurisdiction.
2. That the Ld CIT (A) erred in law and facts of the case in sustaining the order for AY 2016-17, when the Ld AO passed one consolidated order u/s 153A/143(3) instead of siz separate orders.
3. That the Ld CIT(A) erred in law and facts of the case in sustaining the addition of Rs 25,25,000 when it is submitted that Shri Saurabh Baderiya has surrendered the income of Rs 25,25,000 in his return of income and hence the addition made for the same amount in the hands of assessee on protective basis has become infructuous.
4. The Ld CIT (A) erred in law and facts of the case in sustaining the addition of Rs 25,25,000 on protective basis, without enquiring into the status of addition done on substantive basis.
A.Y. 2016-17 Asha Baderia 5. The appellant reserves the right to add or amend any ground of appeal
.”
2. The facts of the case are that a search and seizure operation under section 132(1) of the Income Tax Act was carried out on 17.11.2015 in the premises of numerous assessees related to the Jabalpur Hospital Group and Metro Hospital Group. Residential premises of the assessee’s husband Sh. Shambhu Dayal Baderia, in which the assessee also resides, was also covered during the search. During the course of the search and seizure operation, locker no. 27 standing in the name of the assessee and her husband was covered and therefore, a notice under section 153A of the Act was issued against the assessee. In response, the assessee filed a return declaring her income at Rs.5,25,970/- and the case was taken up for scrutiny. During the course of assessment, the ld. AO referred to some seized materials relating to advances given to M/s P.P. Constructions, M/s Rajni Builders, Shri Gokul Prasad Narayan Das More and Sh. Deepak, proprietor M/s Agarwal Iron Stores, totaling to Rs. 25,25,000/- which had been given by Sourav Badauria, out of his undisclosed income for the year 2016-17 in favour of the assessee. Sh. Saurabh Badauria had already surrendered this amount and paid due taxes upon it. Therefore, the ld. AO decided to add this amount back to the income of the assessee on protective basis. Thus, the income of the assessee for the assessment year in question was computed at Rs. 30,50,970/- including the protective addition.
3. Aggrieved with the said addition, the assessee went in appeal before the ld. CIT(A)-1, Jabalpur. Subsequently, her appeal was migrated to the NFAC and taken up for disposal by the Addl/JCIT(A), Nasik. The ld. Addl/JCIT(A) records that he issued three notices to the assessee on 29.12.2020, 7.06.2021 and 17.10.2024 to submit arguments in support of the appeal but the assessee did not submit any response. From the same, the ld. Addl/JCIT(A) came to the A.Y. 2016-17 Asha Baderia conclusion that the assessee was not interested in pursuing the appeal and therefore, he dismissed the appeal of the assessee.
4. The assessee is aggrieved at this summary dismissal of her appeal and has accordingly come in appeal before us. Sh. Rahul Bardia, C.A. (hereinafter referred to as the ld. AR) appearing on behalf of the assessee drew our attention to his paper book and pointed out that the assessee had filed an affidavit submitting the reasons for not appearing before the ld. CIT(A). It was submitted that the ld. AO had made a protective addition of Rs. 25,25,000/- in the hands of the assessee for the A.Y. 2016-17 and her son Sh. Saurabh Baderia had already accepted this amount as his undeclared income and paid tax on it. This had been mentioned in the order of the ld. AO but still the ld. AO had chosen to do a protective addition in the hands of the assessee. The assessee had filed an appeal against that protective addition, but was advised by her counsel that since the Department had accepted surrender of income in the hands of the Sh. Saurabh Baderia, there was no meaning for any addition made on protective basis. The case of Saurabh Baderia for the assessment years 2010-11 to 2016- 17 had already been completed. Based upon the advice of the counsel, the assessee did not follow up for the appeal case pending before the first appellate authority. The counsel also did not inform about the notices served. The assessee was an old lady of 75 years of age and she was not conversant with electronic procedure. She was fully dependent on the counsel for this purpose and the ld. Addl/JCIT(A) had passed the order on ex parte basis on 14.11.2024.
The ld. AR, thereafter, took our attention to the assessment order passed in the case of Sh. Saurabh Baderia in assessment year 2016-17 which was placed on page 55 of his paper book and submitted that since Sh. Saurabh Baderia had already surrendered the impugned amount and paid taxes on it, no addition could be made in the hands of the assessee. Accordingly, it was prayed A.Y. 2016-17 Asha Baderia that the ld. Addl/JCIT(A) had failed to consider this fact and therefore, his decision was bad in law.
On the other hand, Sh. Shravan Kumar Meena, CIT. DR (hereinafter referred to as the ld. DR) submitted that the matter could be sent back to the file of the ld. Addl/JCIT(A) to examine whether the amount added back in the hands of the assessee was the same amount as had been surrendered by Sh. Saurabh Baderia in his assessment so that there was no ambiguity left in the matter.
We have duly considered the facts and circumstances of the case. The additions that are made on protective basis are only done with a view to protect the interest of Revenue in case the substantive addition that is made in somebody else’s hands does not survive the test of appeal. In the instant case, the ld. AR has submitted that the amounts have fully been surrendered by Sh. Saurabh Baderia, son of the assessee and therefore, there is no need for sustaining the addition in the hands of the assessee. We observe that the ld. Addl/JCIT(A) has not considered this aspect before dismissing the appeal. We also observe that a protective addition cannot be sustained as a protective addition beyond the stage of assessment. The first appellate authority has either to decide whether the addition is maintainable in the hands of the assessee or whether it is confirmed in the hands of another assessee, in which case there is no need for the protective addition in the hands of the assessee. That being the case, we restore the matter to the file of the ld. Addl/JCIT(A) with a direction to the assessee to produce the necessary evidences before the ld. Addl/JCIT(A) to demonstrate that the amounts which have been added back protectively in the hands of the assessee are the same amounts which have been surrendered by Sh. Saurabh Baderia on which taxes have been paid and A.Y. 2016-17 Asha Baderia thereafter the ld. Addl/JCIT(A) may consider the matter on its merit and pass a fresh decision in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 30.09.2025 in the open Court.