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Facts
The Revenue filed an appeal against the order of the CIT(A) which deleted an addition of Rs. 5,00,00,000/- made by the AO on account of cash deposits. The assessee, a housewife, claimed the amount was Rs. 5 lacs, not Rs. 5 Crore, and this was due to a bank error. The CIT(A) accepted this submission and allowed the appeal.
Held
The Tribunal noted that the CIT(A) accepted additional evidence from the assessee without giving the AO an opportunity to examine it, violating Rule 46A. The Tribunal also observed that the bank certificate was without a stamp, and the veracity of the documents needed examination. Therefore, the issue was remitted back to the AO for re-examination.
Key Issues
Whether the CIT(A) erred in deleting the addition by accepting additional evidence without allowing the AO an opportunity to examine it as per Rule 46A and whether the AO was given sufficient opportunity of being heard.
Sections Cited
Sec. 148A, Sec. 148, Sec. 144, Sec. 147, Rule 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH”, PATNA
O R D E R
PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
This is an appeal filed by the revenue against the order passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)] dated 24.02.2025, DIN & order No. ITBA/NFAC/S/250/2024-25/1073647027(1) on the following grounds:
Sapna “1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs 5,00,00,000/-/ made by A.O by accepting additional evidence submitted by the Assessee without allowing the Assessing officer an ample opportunity to examine and submit his report/argument, as per Rule 46A of the Income tax Rule, 1962.
2. Whether on the facts and in the circumstances of the case and in law, the action of the CIT(A) in not allowing the Assessing officer sufficient opportunity of being heard was in contravention of Rule 46A of the Income tax Rule, 1962. iii. Any other ground that may be urged at the time of hearing.”
At the outset of hearing, we noticed that the appeal filed by the Revenue is delay by 357 days of which the Revenue has filed a condonation petition F.No. ITO/W-1(1)/BGP/ITAT/2025-26/115, dated 30.10.2025 in which the reasons for delay in filing has been explained as under:
Subject:- Submission of application for Condonation of Delay for filing 2nd Appeal in the case of Mrs. Sapna, PAN-CHBPS5152D, A.Y. 2015-16-reg. Kindly refer to the above. In this connection, it is to submit that in this case, the Ld. CIT(Appeal), NFAC has decided the appeal in favour of the assessee and entire addition of Rs. 5,00,00,000/- was deleted vide order dated 24.02.2025. Accordingly, tax effect of Rs. 1,68,04,454/- is involved in this case. which is above the monetary limit to file 2nd Appeal by the department. The appeal is being filed with a request to condone the delay. Reason for delay:- In this case, the Centralised Scrutiny Report (CSR) was initiated after receipt of order u/s 250 of the 1. T. Act. 1961 and the same was submitted. Later on, a clarification was sought in this regard by the Range Head and during re- submission of CSR, the proceedings got disappear from the worklist due to system error. Since, the case is not appearing in the worklist, the date of first submission of CSR report is not known and the CSR is resubmitted manually on 06.10.2025, which resulted in delay of filing 2nd Appeal. Submitted for kind consideration with a request to condone the delay in filing 2nd Appeal.
On going through the above application, we noted that the Revenue had reasonable cause for non-filing of appeal within the specified date. Considering the condonation petition and reasons given therein, we condoned the delay relying on the judgment of Hon’ble Apex Court in the Sapna case of Collector, Land Acquisition vs Mst. Katiji, (1987) 167 ITR 171 (SC), we also rely on the co-ordinate bench of the ITAT Bangalore in in the case of Welcome Traders vs DCIT FOR Ay 2020-21 , we condone the delay and the appeal is taking for adjudication.
Briefly stated the facts of the case are that the as per the information available in ITBA system and insight portal of the income tax department in which it has been noted that the assessee had not filed the return of income for the AY 2015-16 and has made substantial amount of cash deposit of Rs. 5 Crore in his bank account. Accordingly, notice u/s 148A of the Act was issued to the assessee and the assessee was given opportunity to explain but there was no compliance, thereafter, order u/s 148A(d) was passed with the prior approval of the competent authority and notice u/s 148 of the Act was issued on 30.03.2022. In response to the said notice, the assessee did not file return of income and thereafter other opportunities granted to the assessee but there was no response, the case was getting time barred, now there was no other option to complete assessment exparte u/s 144/147 of the Act on basis of facts available on record. Therefore, for want of explanation from the assessee regarding the nature and source of cash deposit were treated as unexplained money and assessed the income from other sources. It was further observed that the assessee has received interest of Rs. 22,737/- as interest income other than securities. Accordingly, the amount of Rs. 22,737/- was being considered as unexplained money deposit in savings bank account added into the total income of the assessee.
Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A). During the course of appellate proceedings, the assessee filed detailed written submissions and the copy of bank statement and a Sapna certificate from the Union Bank of India dated 11.04.2023 without stamp of the bank. The Ld. CIT (A) after considering the submissions and certificate issued by the bank noted that the amount has been wrongly reported it is actually Rs. 5 lacs and he allowed the appeal of the assessee observing as under:
5.6 In addition to the above, the appellant also uploaded a letter dated 11.07.2024, addressed by the Branch Manager of Union Bank of India, Bhikhanpur Branch, to ITO W-2(2)(3), Ghaziabad, by explaining a technical error committed by from their side while uploading the data into the Income Tax Portal. Because of the human error happened from the banker, the appellant's case was reopened u/s 148 of the IT Act, without carrying out any basic verification and the ITO W-2(2)(3) added entire sum of Rs. 5,00,00,000/- as 'Income from other source'. Upon perusal of all these details, it is concluded that we addition made by the AO is not maintainable and the AO is directed to delete the same.
Aggrieved from the above order, the Revenue filed appeal before the ITAT.
The Ld. DR relied on the order of AO and submitted that the Ld. CIT(A) has without giving any opportunity to the AO accepted the additional evidences filed by the assessee which is violation of Rule 46A of the Income Tax Rules, 1962 and he also stated that during the course of assessment proceedings various opportunities were granted to assessee but the assessee did not submit any documents. He further submitted that while allowing appeal of the assessee. The Ld. CIT(A) did not call any information from the bank to examine the veracity of the documents furnished by the assessee and requested that the AO should have been given opportunity to veracity of the documents furnished.
On the other hand, the Ld. AR relied on the order of Ld. CIT(A) and submitted that the assessee is a housewife, the amount was given by her husband the bank has wrongly reported the figures of Rs. 5 Crore in spite of Rs. 5 lacs the amounts reported by the bank may belong to some other persons, but not of the assessee. In support of his argument, he relied on the bank statement and bank certificate which is incorporated
Sapna in the Ld.CIT(A) in his order and he submitted that the assessee has no any other income and further submitted that the interest of FD of Rs. 22,737/- is very less looking to the quantum of Rs. 5 lacs of time deposit which are given strengthen for wrong reporting by the bank.
Considering the rival submissions and perusing the material available on record and orders of authorities below. The income tax department received information that the assessee has invested Rs. 5 lacs in his bank account and for want of documentary evidences. It was considered as unexplained money and the Ld. CIT(A) accepted the additional evidences filed by the assessee i.e. bank statement and certificate issued by the bank and the Ld. CIT(A) did not give any opportunity to the AO and accepted the additional evidences which is violation of the Rule 46A of the Income Tax rules, 1962 and he has also not independently examined the certificate submitted by the assessee and allowed the appeal of the assessee. Therefore, to examine the veracity of the certificate issued by the bank (without stamp) and bank statement. We remitting this issue back to the file of AO for the limited purpose of examination of the certificate and bank statement and decide the issue as per law after giving reasonable opportunity of being heard to the assessee. We also direct to AO for taking action as per income tax provisions against those bank officers who has/have reported wrong figures to the income tax department.
In the result, appeal of the revenue is allowed for statistical purposes.
Order pronounced on 20.01.2026