JAY SINGH,MORENA V. ITO-1, MORENA

ITA 117/AGR/2025

AI Insights

The case involves Jay Singh, an agriculturalist, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs 22,01,000 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was based on cash deposits in Singh's bank account, which the AO deemed unexplained due to the absence of a filed income return. The ITAT found that the NFAC had not adequately considered the affidavits and other evidence provided by Singh, which claimed the deposits were from the sale proceeds of agricultural land. The ITAT noted that the NFAC had ignored its previous directions to verify the land's circle rates or make third-party verifications, leading to the decision to remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777277 (ITAT-AGRA)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2025
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-02-2025
• Other Referred Cases: NTPC Ltd vs. 229 ITR 383(SC)
• Laws Referred To: Income-tax Act, 1961
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR
• Assessee Lawyers: RAJENDRA SHARMA
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Reassessment proceedings
• Section: 147; 148; 144; 142(1)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “SMC”: AGRA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER (Through virtual hearing) ITA No. 117/AGR/2025 (Assessment Year: 2010-11) Jay Singh, Gram Khaneta, Maharajpur, Morena, Madhya Pradesh Vs. ITO, Ward-1, Morena (Appellant) (Respondent) PAN: CFWPS1529H Assessee by : Shri Rajendra Sharma, Adv Shri Manuj Sharma, Adv Revenue by: Shri Anil Kumar, Sr. DR Date of Hearing 18/08/2025 Date of pronouncement 17/09/2025 O R D E R 1. The appeal in ITA No. 117/AGR/2025 for AY 2010-11, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 26.12.2024 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.11.2017 by the Assessing Officer, ITO-1, Morena (hereinafter referred to as ‘ld. AO’). 2. The only issue to be decided in this appeal is as to whether the learned NFAC was justified in confirming the addition made in the sum of Rs 22,01,000/- on account of cash deposits made in the bank account in the facts and circumstances of the instant case. I also find that the assessee had raised the following additional legal grounds before me:- Printed from counselvise.com ITA No. 117/AGR/2025 Jay Singh Page | 2 “Ground No. 4 (Additional Legal Ground) That the order passed by NFAC dt. 26.12.2024 is passed not in accordance with the provisions of section 250(6) of Income tax Act. The order so passed is bad in law, liable to be set aside. Ground No. 5 (Additional Legal Ground) That while passing the order u/s 250 dt. 26.12.24, the NFAC has completely ignored the facts that the provisions of section 148 are not attracted in the case of the assessee. The assessment passed by the AO, invoking the provisions of section 148 is against the law, order passed by NFAC dt. 26.12.2024 is bad in law, liable to be set aside. Ground No. 6 (Additional Legal Ground) That while passing the order, NFAC has completely ignored that the notice issued u/s 148 dt. 29.03.2017 served upon the assessee on 05.04.2017 is barred by limitation, as per provisions of section 149 of Income Tax Act, the assessment completed subsequent to it is bad in law, liable to be set aside. Ground No. 7 (Additional Legal Ground) That while passing the order dt. 26.12.24, NFAC have completely ignored that the provisions of section 69A of Income tax Act are not attracted in the case of the assessee, order passed dt. 26.12.24, sustaining the addition made, invoking the section 69A of Income tax Act by NFAC is bad in law, liable to be set aside. Ground No. 8 (Additional Legal Ground) That while passing the order dt. 26.12.2024, NFAC have completely ignored the facts that in support of explanation, the assessee has duly filed the affidavits, which cannot be ignored, till they proved as false, the affidavits filed by the appellant are liable to be accepted, addition made by the AO, invoking the provisions of section 69A sustained by NFAC is liable to be deleted” 3. I find that the aforesaid additional grounds are purely legal in nature and goes to the root of the matter. The facts relevant for its adjudication are on record. Hence in view of the decision of the Hon’ble Supreme Court in the case of NTPC Ltd reported in 229 ITR 383(SC), these additional grounds are hereby admitted and taken up for adjudication along with the original grounds. Printed from counselvise.com ITA No. 117/AGR/2025 Jay Singh Page | 3 4. I have heard the rival submissions and perused the materials available on record. The assessee is an agriculturalist having only agricultural income. It is not in dispute that the assessee had made cash deposit of Rs 22,01,000/- in his bank account. Since no return of income was filed by the assessee, the learned AO formed a belief that income of the assessee had escaped assessment and accordingly sought to reopen the case vide issuance of notice under section 148 of the Act on 29-3-2017, which stood served upon the assessee on 5-4-2017. In the reassessment proceedings, notice under section 142(1) of the Act stood issued to the assessee. Assessee, being an uneducated person and having no knowledge of operating the computer and income tax portal could not make compliance to the notices issued by the learned AO, which ultimately culminated in framing of assessment under section 144 read with section 147 of the Act on 27-11-2017, adding a sum of Rs 22,01,000/- on account of cash deposits made in the bank account as unexplained money under section 69A of the Act. This action of the learned AO was upheld by the learned NFAC. Aggrieved, the assessee preferred an appeal before this Tribunal. This Tribunal vide its order dated 20-09-2021 remanded the matter back to the file of Learned NFAC for deciding the issue afresh after granting sufficient opportunity of hearing to the assessee within 6 months from the receipt of the order of Tribunal. The Learned NFAC ignoring the directions given by this Tribunal passed an order on 26-12-2024 dismissing the appeal of the assessee. The Learned NFAC however noted that assessee had furnished written submissions along with copy of agreement to sale of land, copy of his bank account held with SBI and copies of affidavits of his brothers Mr Naresh Singh and Mr Bishan Singh. The affidavits of brothers are enclosed in Pages 8 to 10 of the Paper Book filed before me. 5. I find that in the affidavits filed by the brothers of the assessee, they had stated and duly affirmed that they had received sale proceeds on sale of jointly Printed from counselvise.com ITA No. 117/AGR/2025 Jay Singh Page | 4 held agricultural land and the sale proceeds thereon were duly deposited in cash in the bank account of the assessee. The breakup of cash deposits made in the bank account are as under:- By assessee - Rs 6,51,000/- Cash belonging to Mr. Naresh Singh - Rs7,40,000/- Cash belonging to Mr. Bishan Singh - Rs 8,10,000/- Total Rs 22,01,000. 6. The assessee had also filed copy of sale deed and sale agreement copy before the Learned CITA as additional evidences in support of the affidavit in the first round of proceedings. The Learned CITA had ignored the sale agreement and the sale deed in view of the fact that both reflected two different sale consideration figures. The Tribunal in the first round had observed that neither the seller has confirmed the fact that he actually paid Rs 26,87,500/- and not Rs 1,76,500/-. The Tribunal in its order had noted that the Learned CITA ought to have either verified the circle rates of the agricultural land from the office of land registering authority to arrive at the correct value of the land or should have made third party verification regarding the value of rates of land in the vicinity or neighbourhood instead of outrightly rejecting the additional evidences filed by the assessee in a casual manner. Accordingly, the Tribunal had restored the entire appeal to the file of Learned CITA for deciding the same afresh. 7. In the second round of proceedings, I find that the Learned CITA had merely reiterated the observations made in the first round and dismissed the appeal of the assessee ignoring the directions of the Tribunal . I find that the brothers of the assessee had filed affidavits in support of the fact that they had received sale proceeds from sale of agricultural land and had given that Printed from counselvise.com ITA No. 117/AGR/2025 Jay Singh Page | 5 cash to the assessee for depositing in the bank account belonging to the assessee. This affidavit has not been put to test by the revenue. Hence, in the interest of justice and fair play, I deem it fit and appropriate to restore the entire issue to the file of Learned AO for de novo adjudication in accordance with law. The assessee is at liberty to raise all the legal grounds raised before me and also fresh legal grounds before the Learned AO, if he so desires, in support of his contentions. Needless to mention that the assessee be given reasonable opportunity of being heard. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 17/09/2025. -Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 17/09/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "