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Facts
The assessee's appeal for AY 2017-18 arose against an order treating cash deposits of Rs.4.65 lakhs as unexplained. The Assessing Officer had initially completed assessment under Section 143(3), which was later modified by the CIT(A). The PCIT then exercised revisionary powers under Section 263.
Held
The Tribunal held that the cash deposits of Rs.4.65 lakhs had already been explained by the assessee in the first round of assessment. The lower authorities wrongly added these deposits as unexplained.
Key Issues
Whether the impugned cash deposits of Rs.4.65 lakhs were correctly treated as unexplained by the lower authorities, especially when they were explained in the initial assessment and the revisionary proceedings.
Sections Cited
144, 143(3), 263, 6F
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Date of hearing 25.11.2025 Date of pronouncement 25.11.2025 ORDER This asssessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1079471295(1), dated 11.08.2025 involving proceedings under section 144 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Coming to the assessee’s sole substantive ground raised herein challenging both the learned lower authorities action treating his cash deposits during demonetization amounting to Rs.4.65 lakhs as unexplained, it is noticed during the course of hearing that the Assessing Officer had completed his section 143(3) assessment on 14.12.2019 adding his cash deposits of Rs.2,81,12,921/- which stood deleted in the CIT(A)’s order dated 12.11.2021. It is further noticed that the learned PCIT thereafter exercised his section 263 revision jurisdiction for assessing the impugned cash deposits of Rs.4.65 which has already been already been explained by the assessee in the first round of assessment hereinabove. All these facts sufficiently indicate that this is not an instance wherein either the assessee’s impugned deposits had been left to be examined or unadjudicated in the first round of assessment. This is indeed coupled with the fact that the assessee is stated to be engaged in the specified business of sale of medicines i.e. “medical” profession wherein he supposed to maintain Form 3C in compliance of Rule 6F of the Income Tax Rules, 1962 which has not been questioned by the learned lower authorities in all fairness.
It is thus concluded in light of all the foregoing facts that both the learned lower authorities have wrongly added the assessee’s impugned cash deposits of Rs.4.65 as unexplained and the same stands deleted.