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Facts
The assessee challenged additions made under Section 69A for unexplained cash deposits of Rs. 10 lakhs for AY 2011-12 and a similar issue for AY 2012-13. The Assessing Officer made a best judgment assessment due to non-compliance, and the CIT(A) dismissed the appeal, confirming the additions.
Held
The Tribunal set aside the CIT(A)'s order and remanded the matter to the Assessing Officer for de novo adjudication. This was due to the assessee's claim of not receiving remand notices and the need for proper verification of evidence regarding the source of cash deposits.
Key Issues
The key legal issue was the unexplained cash deposits and the validity of the best judgment assessment due to alleged non-compliance by the assessee at various stages of the proceedings.
Sections Cited
Section 69A, Section 147, Section 144
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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM
The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals)/NFAC, dated 19.12.2025 for the assessment years 2011-12 & 2012-13 as per the grounds of appeal on record.
At the very outset, parties herein conceded that so far as facts and issues are concerned, they are absolutely identical and similar. Having heard the submissions of the parties, these cases are taken up together and disposed of vide this consolidated order. The Ld. Counsel for the assessee submitted that the appeal of the assessee in A.Y.2011-12 may be taken as lead matter.
In this case, additions have been made in the hands of the assessee u/s. 69A of the Income Tax Act, 1961 (for short ‘the Act’) of Rs.10 lakhs as unexplained cash deposits. The assessment order had been passed by the A.O u/s. 147 r.w.s. 144 of the Act since there was no compliance from the assessee.
That against the said addition, the assessee had preferred an appeal before the Ld.CIT(Appeals)/NFAC and the said authority had dismissed the appeal of the assessee observing as follows:
3 Hemant Kumar Tikariha Vs. ITO, Ward-Bhatapara (C.G.) & 98/RPR/2026
“5.1 The issue in the present appeal is that the AO made the addition of Rs.10,00,000/- under Sec.69A of the Act towards unexplained investment. Assessing officer during reassessment proceedings called for the information but due to noncompliance of the appellant, the AO concluded the assessment ex-parte. 5.2 The facts of the case, submissions of the appellant, and material available on record, remand report have been carefully examined. The appellant has furnished a cash book in support of the sources of cash deposits, claiming receipts from contract work, gold loan, agricultural income, and a gift received from her mother. The cash book and supporting documents submitted in this regard have been perused in detail. 5.3 On examination, it is observed that the cash book has not been properly maintained. Cash deposits made into the bank accounts have not been recorded on the credit side of the cash book, resulting in non-reduction of cash balances on the corresponding dates. Such discrepancies clearly indicate that the cash book does not present a true and fair view of the appellant's financial transactions and lacks reliability. Accordingly, the cash book cannot be accepted as a valid record for explaining the source of cash deposits. 5.4 With respect to the claim of gift received from the appellant's mother, it is noticed that although a gift deed and the bank statement of the donor have been furnished, the source of the cheque credited to the donor's bank account has not been explained. The bank account of the donor was opened shortly before the transaction and reflects no substantial balance except for the cheque in question. In the absence of evidence establishing the creditworthiness of the donor and the genuineness of the transaction, the alleged gift remains unsubstantiated and is accordingly treated as the appellant's own unexplained money. 5.5 The appellant has further claimed that the cash deposits represent agricultural income and has relied upon a certificate issued by Jila Sahakari Bank stating that the deposits were out of sale proceeds of agricultural produce. However, no withdrawals towards agricultural expenses have been recorded in the cash book, nor has any independent evidence been produced to substantiate the agricultural activity. Similarly, the claim of receipt from contract work remains unsupported due to absence of documentary evidence. In view of the above facts and circumstances, the 4 Hemant Kumar Tikariha Vs. ITO, Ward-Bhatapara (C.G.)
& 98/RPR/2026 explanation offered by the appellant is not found to be satisfactory. 5.6 Considering the totality of the facts and the defects noted in the accounts, I concur with the addition made by the Ld. Assessing Officer. Accordingly, the cash deposits amounting to Rs.10,00,000/- are held to be unexplained investment within the meaning of Section 69 of the Income-tax Act, 1961, and the same are liable to be taxed as unexplained income in the hands of the appellant in accordance with law. The addition made is, therefore, confirmed. Accordingly the ground no 1 is raised by appellant is hereby dismissed. 5.7 Multiple opportunities were accorded to the appellant through statutory notices and show-cause letters. However, the appellant failed to avail the same and did not furnish the requisite details or explanations. Consequently, the Assessing Officer was constrained to complete the assessment on a best-judgment basis in accordance with law. In view of the foregoing, the ground no 2 raised by the appellant is devoid of merit and is hereby dismissed.
In the result, the appeal filed by the appellant is 'Dismissed'.”
At the time of hearing, the Ld. Counsel for the assessee submitted that due to circumstances beyond control of the assessee, they were unable to attend the proceedings before the A.O which resulted in passing of best judgment assessment. The Ld. Counsel further submitted that they had filed entire evidences before the Ld. CIT(Appeals)/NFAC substantiating the nature and source of the said cash deposits. However, it is seen from record that there was a remand report called for by the Ld. CIT(Appeals)/NFAC from the A.O, but the assesse had not complied with the hearing notices of the remand proceedings. That on query from the Bench on this aspect, it was submitted by the Ld. Counsel that they had 5 Hemant Kumar Tikariha Vs. ITO, Ward-Bhatapara (C.G.)
& 98/RPR/2026 not received any notice regarding remand proceedings, therefore, they could not comply. It was the prayer made by the Ld. Counsel that since all these documents have been placed before the First Appellate Authority explaining the nature and source of cash deposits and since there was no compliance either before the A.O or at the time of remand proceedings, therefore, if it is deemed appropriate the matter may be remanded to the file of the A.O for proper verification and denovo adjudication as per law.
6. The Ld. Sr. DR fairly conceded to the arguments placed on record by the Ld. Counsel for the assessee in the interest of substantive justice.
In the light of entire facts and circumstances, I find force in the argument put forth and prayer made by the Ld. Counsel for the assessee and accordingly, in the greater interest of principles of natural justice, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter to the file of the A.O for denovo adjudication as per law examining all the evidences placed on record regarding nature and source of cash deposits made by the assessee. The addition u/s. 69A of the Act shall only sustain if the assessee is unable to explain the nature and source of the said cash deposits made during the relevant year, otherwise, the addition shall be deleted.
As per the above terms grounds of appeal of the assessee are allowed for statistical purposes.
6 Hemant Kumar Tikariha Vs. ITO, Ward-Bhatapara (C.G.) & 98/RPR/2026 A.Y.2012-13 10. Since at the outset both the parties conceded the facts and issue being similar for both these appeals, therefore, my decision rendered in A.Y.2011-12 shall “mutatis-mutandis” apply in for A.Y.2012-13 except for the amount of cash deposits involved therein. Resultantly, this matter is also remanded to the file of the A.O as per similar terms.
In the result, appeal of the assessee in for A.Y.2012-13 is allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in open court on 25th day of February, 2026.