SHAHID UMAR,ETAH vs. ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE
Facts
The assessee, engaged in green peas trading, did not file an income tax return for AY 2018-19 despite significant cash transactions. Reassessment proceedings were initiated, and the AO estimated business income at 8% of bank credits, making an addition. The NFAC confirmed the addition without considering the assessee's detailed explanations and documents.
Held
The tribunal found that the NFAC mechanically confirmed the AO's order without properly considering the assessee's multiple replies, explanations, and supporting documents, including bank statements, cash book, and business license. Therefore, the tribunal restored the entire appeal to the NFAC for a fresh adjudication.
Key Issues
The key legal issue was whether the lower authorities correctly assessed the assessee's business income without adequately considering the explanations and documents provided, particularly regarding cash deposits and withdrawals in the context of green peas trading.
Sections Cited
Section 147, Section 144, Section 144B, Section 148, Section 142(1), Section 44AD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH “SMC”: AGRA
The appeal in ITA No. 604/AGR/2025 for AY 2018-19, arises out of the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 27.10.2025 against the order of assessment passed u/s 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 09.03.2023 by the Assessing Officer, ITO, Ward-4(3)(3), Kasganj, UP (hereinafter referred to as ‘ld. AO’).
One of the ground raised before me is that the learned NFAC had mechanically confirmed the order of the ld AO without considering the multiple replies filed by the assessee. This goes to the root of the matter and hence I proceed to address the same first.
ITA No. 604/AGR/2025 Shahid Umar
I have heard the rival submissions and perused the materials available on record. The assessee is engaged in the trading of green peas in the name of M/s Shahid Trading Company. No return of income was filed by the assessee for assessment year 2018-19 inspite of making huge cash deposits/ withdrawals of Rs 2.33 crores and accordingly the Learned AO initiated reassessment proceedings as per law. The Learned AO observed that assessee sought details for deposits made in the bank account from the assessee. No return of income was filed by the assessee in response to notice issued under section 148 of the Act on 26-3- 2022. During the course of reassessment proceedings, the assessee was given several notices under section 142(1) of the Act dated 17.10.22, 16.11.2022, 06.12.2022 and show-cause notice on 27.02.2023. In response to the show-cause notice dated 27.02.2023, the assessee submitted that he is engaged in trading of green peas by purchasing from farmers and further stated that in this line of business the payments for purchases are to be made only in cash. The assessee completely explained the modus operandi of conducting his business of trading in green peas. The assessee pleaded before the Learned AO to compute the income from business by applying the presumptive taxation prescribed under section 44AD of the Act and attached the computation of income thereon. The assessee explained that the receipts in the bank account are emanating out of business and payments are made to the farmers in cash out of cash withdrawals made from the bank account. It was also explained that the deposits in cash deposits made in the bank account were out of earlier cash withdrawals made during the same year. The assessee enclosed the complete copies of bank statements, computation of total income, cash account for the whole financial year 2017-18 and a letter dated 4-3-2023 explaining the transactions in the bank account. The Learned AO noted that assessee had filed returns of income for assessment
ITA No. 604/AGR/2025 Shahid Umar
years 2019-20 and 2022-23 enclosing audit reports in Form No. 3CB and 3CD wherein the same business were carried out by him. Finally the Learned AO determined the income from business of trading in green peas by considering the total credits in the bank account as sale proceeds and estimated income at the rate of 8% and made an addition of Rs. 17,00,036 and completed the assessment on 09.03.2023. The assessee challenged the assessment before the Learned NFAC. The Learned NFAC merely reiterated the findings of the assessment order and confirmed the addition without looking into the various documents submitted by the assessee and explanations given thereon. Even there was discrepancy in the total turnover figure adopted by the Learned AO and the assessee, which was also not looked into by the Learned NFAC. I find that the assessee being carrying on business of trading in green peas is not disputed by the lower authorities. The assessee had also enclosed the copy of UP Mandi license in the name of Shahid Trading Company for carrying on the business which is enclosed in pages 6 & 7 of the paper book. The paper book also contained various documents such as the complete statement of facts, computation of income, summarized cash book, copy of bank statements of the assessee. These documents were not considered by the Learned NFAC in the right perspective. Hence in the interest of justice and fair play, I deem it fit and appropriate to restore the entire appeal to the file of Learned NFAC for denovo adjudication in accordance with law. The assessee is given liberty to furnish fresh evidences, if any, in support of his contentions. The assessee is also directed to cooperate with the Learned NFAC for expeditious disposal of the appeal by not taking unwarranted adjournments except due to exceptional or bona fide circumstances. With these observations, the grounds raised by the assessee are allowed for statistical purposes.
ITA No. 604/AGR/2025 Shahid Umar
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21/01/2026.
-Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 03/02/2026 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi
