INCOME TAX OFFICER, WARD-8(1), PUNE vs. SHAMSUNDAR KALIRAM AGARWAL, PUNE

The long and short of the case is that; the assessee is an individual whose return of income [for short ‘ITR’] filed for assessment year 2018-19 was subjected to limited ITAT-Pune Page 1 of 4

ITO Ward-8(1), Pune Vs Shamsundar Kaliram Agarwal scrutiny u/s 143(2) of the Act to verify huge cash deposits. For the assessee’s failure to effectively substantiate the very source & its nature and offer satisfactory explanation regarding cash deposit of ₹50,77,58,790/- made into his two bank accounts viz; 35574446021 & 34408217589 held with State Bank of India, the Ld. AO added the aforestated amount of deposits to his total income and brought to tax by an order of assessment framed u/s 143(3) of the Act.

Aggrieved assessee carried the matter before first appellate authority on a solitary ground that the Ld. AO erred in facts and law in making an addition on the basis of bank account statement/credit. The Ld. NFAC requoting from various judicial precedents without adjudicating the merits of the case in terms of 250(6) of the Act remanded the matter back to Ld. AO for recomputing respondent’s total income in accordance with the direction laid at para 5 of the impugned order which is placed at page 21/22 as; “During the appeal proceedings, the appellant has submitted the agreement with Oxigen Services India Pvt. Ltd., certificate of appointment of customer service point, request for opening of current account from Oxigen Services India Pvt. Ltd. to the Branch Manager, State bank of India, Bhosari, a part of the statements of the said bank account. From perusal of the submission and evidence produced by the appellant, it is apparent that the appellant is appointed as customer service point by Oxigen Services India Pvt. Ltd., which is duly authorized by the State Bank of India as business correspondent to appoint customer service point. From perusal of the bank accounts, it is found that these current accounts bearing account no. 35574446021 and 344082175890f State Bank of India are exclusively used for the purpose of collecting cash and deposit in his bank account on behalf of bank's customer and issue payments to bank customers. These accounts are opened on the request from Oxigen Services India Pvt. Ltd. to the Branch Manager, State bank of India, Bhosari. The appellant has failed to produce true working of the commission earned through the Customer service point. He merely produced the clauses of the agreement with ITAT-Pune Page 2 of 4

We have heard the rival contentions of both the parties; and subject to the provisions of rule 18 of ITAT-Rules, 1963 perused material placed on record and case laws relied.

We note that, all three grounds raised in the present appeal by the Revenue are solitarily revolves alleging around the action for setting-aside the original assessment to recompute the taxable income in accordance with directions, being violative of section 251(1)(a) r.w.s. 250(6) of the Act. We are heedful to quote here the, the restriction placed by clause (a) of sub-section (1) of section 251 of the Act obligates the first appellate authority to adjudicate the issue either by confirming or annulling the addition or reducing or enhancing the addition made by the assessing officer without the right to remand the ITAT-Pune Page 3 of 4

Per contra in the instant case, we find that the Ld. NFAC after considering the issue at length failed to adjudicate the issue conclusively in terms of section 250(6) of the Act but directed the Ld. AO for recomputing the total income in accordance with direction it appended therein. This directions to the Ld. AO in our considered view have effect of setting aside the original assessment therefore has suffered from clause (a) of s/s (1) of section 251 r.w.s. 250(6) of the Act. For the reasons without offering our comments on the merits of the case, we deem it fit to quash the directions by setting-aside the impugned order under challenge and remand the matter back to the file of Ld. NFAC for de-nova adjudication after according not more than three opportunities to the respondent assessee and pass a speaking order in terms of section 250(6) of the Act, ergo ordered accordingly. Thus, the grounds of the Revenue stands allowed.

In result, the appeal is allowed for statistical purpose in above terms. U/r 34 of ITAT Rules, the order pronounced in the open court on this Thursday 14th day of March, 2024.