DHARAM PAL SINGH,GHAZIABAD V. INCOME TAX OFFICER, WARD 2(1)(2), GHAZIABAD

ITA 3112/DEL/2024

AI Insights

The case involves Dharam Pal Singh, a freight transporter, who appealed against the order of the Commissioner of Income Tax (Appeals), which upheld the AO's decision treating cash deposits of Rs.1,10,06,500 during the demonetization period as unexplained investment under section 69 of the Income Tax Act, 1961. The AO had taxed these deposits as unexplained investments due to non-compliance by the assessee in providing satisfactory explanations or evidence during the assessment proceedings. The CIT(A) dismissed the appeal, agreeing with the AO's findings. The Tribunal, however, decided that the case should be examined on its merits, given the additional evidence presented, and thus remitted the case back to the AO for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474943 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANISTA
• Keywords: Additional evidence; Unexplained investment
• Section: 69; 69A

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.3112/Del/2024, A.Y. 2017-18 Dharam Pal Singh 156, New Madhopura, Gaushala Phatak,Ghaziabad, PAN:BCOPS1601L Vs. ITO, Ward 2(1)(2), Ghaziabad (Appellant) (Respondent) Appellantby None Respondent by Sh. Rajesh Kumar Dhanista, Sr. DR Date of Hearing 29/01/2025 Date of Pronouncement 29/01/2025 ORDER PER AVDHESH KUMAR MISHRA, AM This appeal for the Assessment Year (hereinafter, the ‘AY’) 2017-18 filed by the assessee is directed against the order dated 30.04.2024 passed by the Commissioner of Income Tax (Appeals), NFAC, New Delhi [hereinafter, the ‘CIT(A)’]. 2. We are tasked to decide two issues in this appeal (i) taxability of cash deposit of Rs.1,10,06,500/- in bank account, during the demonetization period, as unexplained investment under section 69 of the Act r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter, the ‘Act’) and (ii) non-admission of ITA No.3112 /Del/2024 Dharam Pal Singh 2 additional evidence filed during the appellate proceedings in accordance with the Rule 46A of the I.T. Rules. 3. The brief facts of the case relevant for deciding this appeal are that the assessee, freight transporter, filed his Income Tax Return (hereinafter, the ‘ITR’) on 22.03.2018 declaring income of Rs.5,00,000/-. The case was picked up for scrutiny on the reasoning that cash deposits, aggregating to Rs.1,10,06,500/-, made in the bank account during the demonetization period was not commensurate with the income and cash deposits made in corresponding time during the preceding years. The Assessing officer (hereinafter, the ‘AO’) provided various opportunities of being heard to the assessee vide various statutory notices as detailed on page 2 of the assessment order. However, the assessee failed to ensure any compliance before the AO. Therefore, the AO, having no option except to treat the deposits aggregating to Rs.1,10,06,500/- as unexplained investment. Accordingly, he taxed the entire cash deposits in the bank as unexplained investment. Aggrieved, the assessee filed appeal before the CIT(A), who dismissed it observing as under: “None of the conditions provided in sub-rule 1 of Rule 46A of the Income tax Rules 1062 apply to this case and no proper justification was provided by the appellant to fit in his case in one or more of the conditions prescribed above. As discussed elaborately, sufficient opportunities have been provided during the assessment proceedings which was clearly specified by the AO in the assessment order and the appellant chose not to furnish evidences. It is seen from the assessment order that ten notices ITA No.3112 /Del/2024 Dharam Pal Singh 3 were issued starting from 27/08/2018 until 24/08/2019. Further, the assessment order was passed by the AO only on 3/12/2019 u/s 144. The reasons cited by the appellant are lame excuses to wriggle out of the tax liability. Therefore, filing evidences directly at this stage without sufficient cause is unjustified and hence not admitted. To conclude on the above discussion, in the instant case, the appellant has failed to discharge the initial onus of explaining the source and nature of funds for all deposits appearing in the bank accounts of the appellant. The AO therefore rightly added the unexplained amount to the income of the appellant under Section 69A of the Act. Further, in the absence of the furnishing of valid details or supporting documentation on the part of the appellant to counter the order, it is found unnecessary and imprudent to disturb the order of the AO and his findings. Therefore, the impugned assessment order is upheld and no interference is called for” 4. Before us, none appeared on behalf of the assessee. Therefore, we heard the Ld. Sr. Departmental Representative (hereinafter ‘Sr. DR’). With the help of facts mentioned in the assessment order and appellate order, he submitted that reasonable opportunities of being heard were provided to the appellant/assessee by the AO and the Ld. CIT(A). However, the appellant/assessee tactfully ensured noncompliance to avoid proper investigations. Hence, he prayed for upholding of orders of the lower authorities. On specific query by us, he admitted that the issue in dispute had not been decided on merit either by the AO or the Ld. CIT(A). Since the additional evidence filed before the Ld. CIT(A) were not admitted; therefore, the case was not decided on merit. 5. We have heard Ld. Sr. DR and have perused the material available on record. Considering facts of the case in entirety and in the interest of justice, ITA No.3112 /Del/2024 Dharam Pal Singh 4 we find it fit that this case requires to be decided on merit. We therefore, set aside the impugned order and remit the matter back to the file of the AO to decide the case denovo considering the additional/any other evidence filed not only before the Ld. CIT(A) but also before him during the remitted proceedings. The case has to be decided on merit by the AO. Ordered accordingly. 6. The appeal of the assessee is allowed for statistical purposes. Order pronounced in open Court on 29th January, 2025 Sd/- Sd/- (YOGESH KUMAR US) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 29th/01/2024 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "