DEVIKA SINGH,LUCKNOW V. INCOME TAX OFFICER-1(1), LUCKNOW

ITA 479/LKW/2025

AI Insights

Devika Singh, the appellant, was engaged in trading construction materials and had her income tax return for the assessment year 2017-18 scrutinized, leading to the addition of Rs.13,84,500 as unexplained cash credits under section 68 of the Income Tax Act, 1961. This amount represented cash deposits made during the demonetization period, which the Assessing Officer (AO) found unexplained. The First Appellate Authority dismissed her appeal due to non-compliance, prompting her to approach the Income Tax Appellate Tribunal. The Tribunal found merit in her request for a further opportunity to present her case and thus restored the matter to the AO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785685 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 14-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.R.N. SHUKLA
• Assessee Lawyers: SANDEEP KUMAR; PASSING AN
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.479/LKW/2025 Assessment Year: 2017-18 Devika Singh B-1529, Indira Nagar Lucknow (U.P) v. The Income Tax Officer 1(1) Lucknow - New TAN/PAN:CMIPS8743J (Appellant) (Respondent) Appellant by: Shri Sandeep Kumar, FCA Respondent by: Shri R.R.N. Shukla, D.R. O R D E R This appeal has been preferred by the assessee against separate order dated 02.01.2025, passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017- 18. 2.0 The brief facts of the case are that the assessee was engaged in the business of trading of construction material. The assessee e-filed her return of income for the year under consideration on 28.10.2017, declaring a total income of Rs.11,04,900/-. The case of the assessee was selected for scrutiny under CASS. From the details furnished by the assessee, the Assessing Officer (AO) noticed that the assessee had made cash deposits totaling to Rs.13,84,500 in her bank accounts No.001510200038757 maintained with IDBI Bank and Printed from counselvise.com ITA No.479/LKW/2025 Page 2 of 7 bank account No.20185032690 maintained with State Bank of India during the demonetization period. The assessee was required to explain the source of cash deposits in Specified Bank Notes (SBNs). As per the AO, since the assessee had failed to explain the source of these cash credits/deposits, the amount of Rs.13,84,500/- was to be treated as unexplained cash credits of the assessee and added to the total income of the assessee under section 68 of the Income Tax Act, 1961 (hereinafter called “the Act’). The AO completed the assessment under section 143(3) of the Act, assessing the total income of the assessee at Rs.24,89,400/-. 2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under section 271AAC of the Act, separately. 2. Aggrieved, the Assessee preferred an appeal before the Ld. First Appellate Authority, who dismissed the appeal of the assessee for the reason of non-compliance by the Assessee. 2.2 Now, the assessee has approached this Tribunal challenging the order of the Ld. First Appellate Authority, by raising the following grounds of appeal: 1. Because the Id. CIT(A), NFAC ought not to have passed the appellate order ex-parte and dispose off the appeal without hearing the assessee. Printed from counselvise.com ITA No.479/LKW/2025 Page 3 of 7 2. Because the Id. CIT(A), NFAC erred in law and on facts in confirming addition of Rs.13,84,500/-under section 68 of the Income Tax Act, 1961. 3. Because the learned CIT(A), NFAC ought to have deleted the tax charged u/s 115BBE of the Income Tax Act, 1961. 4. Because the Id. CIT(A), NFAC ought not to have confirmed the action of learned assessing officer to treat cash deposit in bank accounts of Rs.13,84,500/- (correct figure is Rs. 13,21,500/-) in specified bank notes (SENs) during demonetization period as unaccounted income of the assessee. 5. Because the Id. CIT(A), NFAC failed to appreciate that the figure of specified bank notes deposited by the assessee in bank accounts during demonetization period as Rs.13,84,500/- instead of the correct figure of Rs.13,21,500/-. 6. Because the learned CIT(A), NFAC failed to appreciate that bank accounts in which specified bank notes have been deposited by the assessee are forming part of the books of account of the assessee which has been duly audited by a Chartered Accountant u/s 44AB of the Income Tax Act, 1961 and no adverse comment has been made by the tax auditor. 7. Because, without prejudice to above, taxing the amount of Rs.13,84,500/- (correct figure is Rs.13,21,500/-) by adding the same to income returned by the assessee has resulted in double taxation of the said amount. 8. Because the Id. CIT(A), NFAC has made the assessment on the basis of conjectures and surmises and without Printed from counselvise.com ITA No.479/LKW/2025 Page 4 of 7 considering the facts, the applicable law and without application of mind. 3. The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that there is a delay of 105 days in filing the appeal before the Tribunal. He further submitted that the assessee had filed an application dated 14.07.2025 for condonation of delay, duly supported by an Affidavit, stating therein that the appeal before the Ld. First Appellate Authority was fixed for hearing on 29.01.2021 on which date the assessee sought for adjournment for third week of February, 2021 and that, thereafter, neither any notice fixing the appeal for hearing was received from the Office of the Ld. First Appellate Authority nor any order passed by the Ld. First Appellate Authority was received by the assessee and that further when the Accountant of the assessee opened e-filing portal of the Income Tax Department on 17.06.2025, he came to know about passing of the order by the Ld. First Appellate Authority. He further submitted that immediately thereafter the order of the Ld. First Appellate Authority was downloaded from the site and appeal was filed before the Tribunal. He prayed that the delay be kindly condoned and the appeal be heard on merits. Printed from counselvise.com ITA No.479/LKW/2025 Page 5 of 7 3.0 The Ld. Sr. D.R. had no objection to the delay being condoned. 4.0 In view of the prayer made by the Ld. A.R. and no objection by the Ld. Sr. D.R., I condone the delay in filing of the appeal and admit the appeal for hearing. 5.0 During the course of hearing before me, the Ld. A.R. submitted that the Ld. First Appellate Authority erred on facts and in law in dismissing the appeal of the assessee by passing an ex-parte order, without adjudicating the issues involved in the appeal of the assessee on merits and without providing a reasonable opportunity of hearing to the assessee. The Ld. A.R. further submitted that certain details and documents relating to the transactions entered into by the assessee during the year under consideration could not be filed before the AO. The Ld. A.R. prayed that the matter may be restored to the file of the AO and that if an opportunity is given, the assessee will produce all the relevant documents in support of her claim before the AO. 6.0 The Ld. Sr. D.R. had no objection to the restoration of appeal to the file of the Assessing Officer as requested by the Ld. A.R. 7.0 I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of Printed from counselvise.com ITA No.479/LKW/2025 Page 6 of 7 the considered view that the assessee deserves one more opportunity to present her case and, therefore, I restore this file to the Office of the Assessing Officer with the direction to provide one opportunity to the assessee to present her case and produce the necessary evidences in support of the impugned transactions entered into by the assessee during the year under consideration. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee. 8.0 In the result, the appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open Court on 27/10/2025. Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:27/10/2025 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Printed from counselvise.com ITA No.479/LKW/2025 Page 7 of 7 By order Assistant Registrar/DDO Printed from counselvise.com "