ANAND KUSHWAHA,BAHRAICH V. INCOME TAX OFFICER-1, BAHRAICH

ITA 35/LKW/2025

AI Insights

The case involves Anand Kushwaha, who appealed against the orders of the Income Tax Officer (ITO) and the National Faceless Appeal Centre (NFAC), which had assessed his income for the year 2018-19 based on unreported cash withdrawals and deposits. The ITO had reopened the case under section 147 of the Income Tax Act, 1961, after noticing significant cash transactions in the assessee's bank account and unreported commission income. The NFAC dismissed the appeal ex-parte, leading to the current appeal before the Income Tax Appellate Tribunal (ITAT). The Tribunal found procedural lapses in the handling of notices and the hearing process, leading to the decision to restore the case to the AO for a fresh assessment with the new evidences provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471428 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANU CHAURASIA
• Assessee Lawyers: RAKESH GARG; PASSING
• Keywords: Set aside; Additional evidence; Reasonable cause
• Section: 147; 148; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.35/LKW/2025 Assessment Year: 2018-19 Anand Kushwaha Sorrokala Motipur Bahraich v. The ITO-1 Bahraich TAN/PAN:CANPK9122Q (Appellant) (Respondent) Appellant by: Shri Rakesh Garg, Advocate Respondent by: Shri Manu Chaurasia, CIT(DR) Date of hearing: 12 03 2025 Date of pronouncement: 19 03 2025 O R D E R PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the assessee against the order dated 21.08.2024, passed by the ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2018-19. 2. The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made cash withdrawals to the tune of Rs.1,29,72,532/- and cash deposits to the tune of Rs.25,000/- in his Bank Account No.3406791921 maintained with State Bank of ITA No.35/LKW/2025 Page 2 of 7 India, during the year under consideration. It was further noticed that the assessee had received Commission/Brokerage, totaling to Rs.18,523/- under section 194H of the Income Tax Act, 1961 (hereinafter called “the Act’) from two different entities during the year under consideration. On the basis of the aforesaid information, the case of the assessee was reopened under section 147 of the Act after issuing notice under section 148 of the Act. The assessee did not respond to the notice issued by the AO under section 148 of the Act. The Assessing Officer (AO), thereafter, issued statutory notices, calling upon the assessee to explain the nature and source of cash deposits and credit entries. However, there was still no response from the side of the assessee. The AO, therefore, completed the assessment under section 147 r.w.s. 144 and 144B of the Act, computing the total income of the assessee as under: Total income as per ITR : Nil Additions under section 69A of the Act : Rs.1,29,97,532/- Addition on account of commission/ : Rs.18,523/- Brokerage Total taxable income : Rs.1,30,16,055/- 2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271AAC and 270A of the Act, separately. ITA No.35/LKW/2025 Page 3 of 7 3. Aggrieved, the assessee preferred an appeal before the NFAC, who dismissed the appeal of the assessee by passing an order ex-parte qua the assessee. 4. Now, the assessee has approached this Tribunal challenging the orders passed by the AO as well as the NFAC by raising the following grounds of appeal: 01. Because the CIT(A) was not justified in deciding the appeal ex-parte, especially when there was no service of notice as per the provisions of section 282 of the Income-tax Act, 1961, the order passed by the CIT(A) be quashed. 02. Because no notice having been served on the appellant by the CIT(A), and the notice as alleged to have been issued, has been issued on wrong e-mail address, the assessee was prevented by sufficient and reasonable cause in not complying to the notices, the order passed by the CIT(A) be quashed. 03. Because the addition of Rs.1,29,72,532/- made by applying the provisions of section 69A r.w.s. 115BBE of the Act, is all contrary to facts, bad in law be deleted. 04. Because the authorities below have failed to appreciate the facts and circumstances of the case and have arbitrarily held, that the amount of Rs.1,29,72,532/-withdrawn by the assessee from his bank account, with State Bank of India, is unexplained money under section 69A of the Act, the conclusion drawn by the authorities below is all ITA No.35/LKW/2025 Page 4 of 7 misconceived, non-appreciation of facts and circumstances of the case, narrated in the assessment order, the entire addition of Rs.1,29,72,532/- made, is bad in law and be deleted. 05. Because the notice issued under section 148A(b) and the order passed under section 148A(d) is all mechanical, without making any diligent enquiries by the authorities at their end inspite of knowing the facts, and fully aware of the CSC Scheme, the addition made by the Assessing Officer and upheld by the CIT(A) be deleted. 5. The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted before us that both the authorities below have passed ex-parte orders without providing reasonable opportunity of hearing to the assessee. The Ld. A.R. further submitted that the assessee could not be represented before the lower authorities owing to the fact that the notice of hearing from the office of the both the lower authorities could not be served on the assessee due to incorrect email address. The Ld. A.R. submitted an application for admission of additional evidence and invited our attention to the paper book consisting of bank statements, copy of Certificate issued by Yes Bank appointing the assessee as Business Correspondent Agent, copy of Certificate issued from Common Service Centre along with copies of Aadhar Card and PAN Card, etc. He submitted that these documents contain some ITA No.35/LKW/2025 Page 5 of 7 important facts relating to the case of the assessee and prayed that the same may be admitted under Rule 29 of the I.T.A.T. Rules. 6. The Ld. CIT(D.R) had no objection to the admission of the additional evidences. 7. Having gone through the additional evidences filed before me, we are of the view that these evidences go to the very root of the matter and are germane to proper determination/assessment in the case of the Assessee. Accordingly, we admit the same. 8. The Ld. A.R. further prayed that in the interest of natural justice, the matter may be restored back the file of the AO where all the aforesaid additional evidences shall be produced to prove the transactions entered into by the Assessee during the year under consideration. 9. The Ld. CIT(D.R) had no objection to the restoration of appeal to the AO. 10. We have heard the ld. CIT(D.R) as well as the ld. AR and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the Assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the AO with the direction to provide one more ITA No.35/LKW/2025 Page 6 of 7 opportunity to the Assessee to present his case. We have already admitted the additional evidences filed by the Assessee in the form of bank statements, copy of Certificate issued by Yes Bank appointing the assessee as Business Correspondent Agent, copy of Certificate issued from Common Service Centre along with copies of Aadhar Card and PAN Card, etc. under Rule 29 of the I.T.A.T. Rules. The Assessee shall produce them before the AO during the course of set aside proceedings. We also caution the Assessee to fully comply with the directions of the AO in the set- aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex- parte qua the Assessee. 11. In the result, the appeal of the Assessee stands allowed for statistical purposes. Order pronounced in the open Court on 19/03/2025. Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:19/03/2025 JJ: ITA No.35/LKW/2025 Page 7 of 7 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Assistant Registrar "