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Facts
The assessee's appeal is against an order confirming additions made by the Assessing Officer (AO). The AO noted that the assessee did not file a return of income and flagged the case under 'NMS Cases' due to cash deposits and withdrawals in bank accounts, and contract receipts. The AO made additions of Rs. 3,75,08,139/- as unexplained money, Rs. 50,659/- on account of contract receipts, and Rs. 14,776/- as interest income.
Held
The Tribunal observed that the documents claimed to have been filed by the assessee before the AO were not referred to by the lower authorities. Consequently, the Tribunal set aside the order of the CIT(A) and restored the grounds to the file of the CIT(A) for fresh adjudication after seeking a remand report from the AO regarding the documents filed by the assessee.
Key Issues
Whether the additions made by the AO as unexplained money, contract receipts, and interest income are justified, considering that documents filed by the assessee were not considered by the lower authorities.
Sections Cited
194C, 69A, 115BBE, 148, 142(1), 144, 139
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Income Tax Appellate Tribunal, JABALPUR BENCH “DB”, JABALPUR
Before: SHRI KUL BHARAT & SHRI, NIKHIL CHOUDHARY
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 25.07.2024, pertaining to the assessment year 2018-19. The assessee has raised the following grounds of appeal: -
1. That the Ld National faceless Appeal Centre: (NF AC) has grossly erred in facts and circumstances of the case to confirm the addition of Rs. 3,75,73,574/-
2. That the addition confirms for Rs. 3,75,08,139/- on account of aggregating deposit with Union Bank of - India account without allowing expenses as withdrawn from bank account is not justified.
3. That the addition made at Rs, 50,659/on account of contract receipt appearing in 26AS without allowing deduction is arbitrary and bad in law.
Page 2 of 4 4 That the addition made at Rs. 14,776/- on account of interest appearing in 26AS is arbitrary and bad in law.
That the Assesses crave leaves to raise any other ground’s on or before the date of hearing to prove that the order passed is bad in law.”
At the time of hearing, no one attended the proceedings on behalf of the assessee. However, the assessee has filed certain documents in the form of paper book, certifying that these documents were filed before the lower authorities. It is also noticed that the Assessing Authority has noted the fact that the no return was filed by the assessee. However, there is no discussion in the impugned assessment order regarding these documents
The Ld. Departmental Representative (DR) supported the orders of the lower authorities and submitted that the assessee had been negligent and adopted these dilatory tactics. Therefore, Ld DR contended that the finding of the lower authorities may be sustained and appeal be dismissed.
Heard, the Ld. Departmental Representative and perused the material available on record. We find that the Ld. CIT(A) passed ex parte order and sustained the impugned additions by observing as under: -
“6. The facts of the case are that as per information in the case of the assessee was flagged as per Risk Management Strategy formulated by the Central Board of Direct Taxes, New Delhi under the head “NMS Cases”. As per the specific information, during the year under consideration the assessee had made cash deposits and withdrawals through in his bank accounts. The assessee also has contract receipts u/s 194C of the Income- tax Act, 1961 and interest income. Accordingly, notice u/s 148 dated 29.03.2022 was issued by AO to the assessee for the AY 2018-19. During the course of assessment proceedings, various Notices were issued by AO to the assessee. In compliance of notice u/s 148 dated 29.03.2022, the assessee was required to file his return of income for the AY 2018-19. However, the assessee had not filed his return of income. During the assessment proceedings various notices u/s 142(1) and request letters as Page 3 of 4 were issued by AO to the assessee to furnish the details and documents necessary to complete his assessment. But the assessee did not comply with any of the notices and has not furnished any details and documents. The AO found that there were huge credits aggregating to Rs.3,75,08,139/- in the bank account of the assessee he has not filed his return of income either u/s 139 or in compliance of notice u/s 148 and have not offered the above transactions for taxation. Accordingly, a show cause notice u/s 144 of the income-tax Act, 1961 dated 28.02.2023 was issued by AO to the assessee to show cause as to why the credits of Rs.3,75,08,139/- not be treated as his unexplained money in terms of provisions of Section 69A of the Income-tax Act, 1961 and added to his total income. The assessee was further requested to show cause as to why the contract receipts and interest income available in Form 26AS should not be treated as his income for the year under consideration. But the assesee not replied SCN. Accordingly, the credits of Rs.3,75,08,139/- lying in the bank account of the assessee have remained unexplained. It is also pertinent to mention here that no return of income has been filed by the assessee either u/s 139 or in compliance of notice u/s 148. Therefore, the total credits of Rs. 3,75,08,139/-, which includes cash deposits also, lying in the bank accounts of the assessee as detailed above, are treated as unexplained money of the assessee u/s 69A of the Income-tax Act, 1961 and added to his total income. Tax on this addition is to be calculated as per provisions of Section 115BBE of the Income-tax Act, 1961. Further contract receipts of Rs.50,659/- are added by to the total income of the assessee and interest income of Rs.14,776/- from Union Bank of India which has also not been offered for taxation. The same was also added to the total income of the assessee.
In the instance of the case the appellant failed to make any submissions in support of grounds of appeal
, this gives rise to an undisputable conclusion that the assessee has got nothing more to say in this regard. I have gone through the record before me and based on the record I have decided to adjudicate the issue on the merits of the case. In the instant case the AO has rightly assessed income of Rs.3,75,73,574/-. Since the appellant failed to substantiate appellant's claim and addition/disallowances made by the Assessing Officer of Rs. 3,75,08,139/- on account of unexplained money and added to the total income of the assessee u/s. 69A r.w.s. 115BBE of the Act and contract receipts of Rs.50,659/- and and interest income of Rs.14,776/- are hereby confirmed.”
5. It is transpired from the record that the documents which are claimed to have been filed before the AO are not referred to by the lower authorities. We, therefore, set aside the order of the Ld. CIT(A) and restore the grounds to the file of the Ld. CIT(A) to decide it afresh, after seeking remand report from the Assessing Authority on the documents that were filed by the assessee as enclosed in the form of paper book before this Tribunal. Grounds raised in this appeal are allowed for statistical purpose.
Order pronounced in the open Court on 21/08/2025.