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Facts
The assessee did not file a return of income, leading to the reopening of their case to verify cash deposits and investments in FDRs. The Assessing Officer (AO) assessed an income of Rs. 136.74 Lacs on a best judgment basis due to non-compliance. The CIT(A) upheld an addition of Rs. 41.50 Lacs after considering the assessee's explanations for the sources of deposits.
Held
The tribunal dismissed the legal ground challenging the reopening, finding that the AO had sufficient reasons and tangible material. On merits, the tribunal restored the issue of the Rs. 41.50 Lacs addition back to the CIT(A) for fresh adjudication, granting the assessee another opportunity to substantiate the source of the deposits.
Key Issues
The key legal issues were the validity of the reopening of the assessment and the substantiation of the source of cash deposits made by the assessee.
Sections Cited
Section 147, Section 144
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Income Tax Appellate Tribunal, “DB” BENCH, AMRITSAR
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & SHRI UDAYAN DASGUPTA, JM
(िनधा�रणवष� / Assessment Year: 2014-15) Shri Lakhvir Singh ITO Ward 1(1) बनाम/ H No. 16, Kotshimir Wala Kacha Rasta, Aaykar Bhawan, Bhatinda Village Chathe Wala, Bhatinda Punjab - 151302 Vs. Punjab - 151302 �थायीलेखासं./जीआइआरसं./PAN/GIR No. FBGPS-2609-K (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. Vipul Arora (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Charan Dass (Addl. CIT) - Ld. Sr DR सुनवाईकीतारीख/Date of Hearing : 03-02-2026 घोषणाकीतारीख /Date of Pronouncement 05-02-2026 : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2014- 15 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC dated 25-11-2024 in the matter of an assessment framed by Ld. AO on best judgment basis u/s 147 r.w.s. 144 on 23-03- 2022. Having heard rival submissions, the appeal is disposed-off as under.
The assessee did not file return of income and the case of the assessee was reopened to verify the cash deposits and investment in FDRs. The assessee remained non-compliant and accordingly, Ld. AO assessed income of Rs.136.74 Lacs.
The assessee’ submissions during first appeal were subjected to remand proceedings. The assessee sought to explain the sources of cash deposits and contended that the deposits were sourced from sale of crops, interest free loans, gifts and cash withdrawals etc. which are tabulated at para 6.8 of the impugned order. The Ld. CIT(A), considering assessee’ submissions, upheld addition of Rs.41.50 Lacs and deleted the remaining addition. The legal ground questioning reopening was dismissed on the ground that Ld. AO had sufficient reasons to reopen the case of the assessee. Aggrieved, the assessee is in further appeal before us.
The Ld. AR assailed reopening on the ground that the amount of deposit for Rs.114.01 Lacs and cash deposit of Rs.22.50 Lacs as stated by Ld. AO while reopening the case of the assessee was factually incorrect. The assessee deposited cash of Rs.49.50 Lacs. On merits, the Ld. AR, in the written submissions, has sought to explain the deposits from different sources. The Ld. Sr. DR pleaded for dismissal of the appeal.
It is clear that the assessee remained non-filer. Pursuant to receipt of information of deposit by the assessee, Ld. AO formed prima-facie belief of escapement of income and reopened the case of the assessee. At the time of reopening, in our considered opinion, it