BINAY KUMAR,WEST CHAMPARAN vs. ITO, WARD- 1 (5), BETTIAH

The present appeal filed by the assessee is directed against the order dated 18.07.2025 passed by the NFAC, Delhi u/s 250 of the Income Tax Act, 1961 (the ‘Act’).

Brief facts of the case are that the assessee had made total cash deposits of 5,29,66,187 in his bank account maintained with the State Bank of India during the relevant assessment year. The Assessing Officer observed that the assessee did not disclose the said amount as income and failed to pay tax thereon. Since the assessee could not satisfactorily explain the nature and source of the deposits, the Assessing Officer treated the same as unexplained money under section Binay Kumar 69A, read with section 115BBE of the Income-tax Act, 1961, and added it to the total income of the assessee 3. Aggrieved, the assessee carried the matter in appeal before the learned CIT(A), who dismissed the appeal, upholding the addition made by the Assessing Officer.

Before us, the learned counsel for the assessee submitted that the entire deposits in the bank account were made in the course of business carried on by the assessee as an SBI Customer Service Point (CSP). It was contended that the deposits and withdrawals represented transactions made on behalf of various customers of the State Bank of India and were purely business transactions, not the income of the assessee. It was further submitted that certificates issued by the State Bank of India confirming the CSP business could not be produced before the learned CIT(A). It was argued that while framing the assessment, the Assessing Officer did not call for any details, from the bank, nor did he examine the nature of transactions carried out in the assessee's bank account bearing Account No.35037352633, which was a current account used exclusively for CSP operations. According to the learned counsel, both the authorities below failed to examine the factual matrix and passed the orders without proper verification. Accordingly, it was prayed that the matter be restored to the file of the Assessing Officer with a direction to re-examine the issue after obtaining necessary reports from the bank, if required.

On the other hand, the learned DR supported the orders of the authorities below.

We have heard the rival submissions and perused the material available on record. It is noted that the assessee has produced a certificate dated 12.04.2025 issued by the State Bank of India, Binay Kumar evidencing that the assessee was operating as a Customer Service Point and rendering banking services on behalf of the bank. We find that these crucial facts were not examined or verified by the Assessing Officer or the learned CIT(A). In the interest of justice, we deem it appropriate to set aside the orders of the authorities below and restore the matter to the file of the Assessing Officer with a direction to re- examine the issue afresh. The Assessing Officer shall provide adequate opportunity of being heard to the assessee and, if necessary, shall obtain confirmation and transaction details from the concerned banking authority to verify whether the deposits relate to services rendered by the assessee as a CSP.