JAYANTA DAS,MAHESHTALA V. ITO WARD 45(2) KOLKATA, KOLKATA

ITA 1540/KOL/2025

AI Insights

The case involves Jayanta Das, the proprietor of M/s. Maa Bhavani Printing House, who appealed against the order of the Commissioner of Income Tax (Appeals) - NFAC, which confirmed the addition of 55,13,183 as unexplained income under Section 69A during the assessment year 2017-18. The addition was based on cash deposits made during the demonetization period, which the Assessing Officer (AO) treated as unexplained. The Tribunal examined the profit and loss account and noted that the sales were higher than the cash deposits, leading to the decision to allow the appeal and delete the addition.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848056 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Kolkata
• Assessment Year: 2017-2018
• Appeal Filed On: 16-07-2025
• Other Referred Cases: M/s Chhabra Land & Housing Ltd. vs. AY 2002-03, B.N. Bhattacharjee & other 118 ITR 461 [SC]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: . FINDINGS
• Keywords: Condonation of delay; Source of fund; Capital asset converted into stock in trade
• Section: 148; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH AT KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No(s). 1540/KOL/2025 Assessment Year(s) 2017-18 Jayanta Das Vs. ITO, Ward-45(2), Kolkata (Appellant) (Respondent) PAN: BBMPD9116L Appearances: Assessee represented by : Souvik Guha, Adv. Department represented by : Pradip kumar Biswas, Sr.DR. Date of concluding the hearing : 18-March-2026 Date of pronouncing the order : 24-March-2026 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 07.11.2024. 1.1 The Registry has informed that the appeal is barred by limitation by 166 days. The assessee has filed an affidavit seeking condonation of delay by explaining the reasons that the appellate order u/s 250 of the Act was communicated to the email of the tax consultant of the assessee, who overlooked the email as well as the information in the portal and thus the assessee was not aware of the impugned appellate order. After being informed about the order, the assessee referred the matter to an Advocate to file the case before the Hon'ble Tribunal. However, the Advocate got minor cerebral attack and had was undergone treatment and advised for seven days rest and after recovery, the appeal was filed Printed from counselvise.com Page | 2 ITA No(s). 1540/KOL/2025 Assessment Year(s) 2017-18 Jayanta Das. before the Tribunal belatedly. Though as per the Registry, the delay is of 166 days; however, the assessee has filed an affidavit for condonation of delay of 172 days. After perusing the same, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication. 2. The assessee is in appeal before the Tribunal raising the following concise grounds of appeal: “1. For that the Appellate order under section 250 of the Income Tax, 1961 dated 07.11.2024 passed by the Ld. Commissioner of Income-tax (Appeals) Income Tax Department, NATIONAL FACELESS APPEAL CENTRE (NFAC) (hereinafter mentioned as Ld. Appellate Authority) is arbitrary, baseless and without considering ground of appeal and submission of the Appellant and based on surmise and conjecture and without considering the facts of the case and also the grounds of appeal and without giving any cognizance to the documents and reply submitted during appellate stage as well as the assessment case records. 2. For that the Ld. Appellate Authority erred in law and on facts in confirming the addition under Section 69A of Rs. 55,13,183/- by treating the entire deposit as demonetised currency and as unexplained income, despite the Appellant furnishing credible evidence bank passbooks, ledger of withdrawals, source of fund and confirmations showing that the amounts were legitimately derived from regular sales from his business and received from his debtors and not taxable undisclosed income, both at the assessment and appellate stage by reversing the legal burden established by Section 69A on proof of ownership and non-recording, the onus shifts to the Appellant to satisfactorily explained. 3. For that demonetised deposit addition under Section 69A must comply with Section 115BBE special tax regime, and Learned Assessing Officer as well as the Learned Appellate Authority failed to apply correct taxation rates and surcharges, leading to erroneous tax computation and interest liability mismanagement and the Learned Assessing Officer as well as the Learned Appellate Authority failed to appreciate the transactions that took place before 1st April 2017, even though caught or assessed in AY 2017-18, cannot be subjected to the enhanced rate of 60% under Section 115BBE and the law does not clearly provide for retrospective application as the amendments are effective from AY 2017-18 but that does not mean that the higher rate applies to all unexplained income regardless of date of origin.” Printed from counselvise.com Page | 3 ITA No(s). 1540/KOL/2025 Assessment Year(s) 2017-18 Jayanta Das. 3. Brief facts of the case are that the assessee is the proprietor of M/s. Maa Bhavani Printing House, which is trading in paints. The Assessing Officer (hereinafter referred to as Ld. 'AO') noted that during the demonetization period, the assessee had deposited cash of ₹2,34,000/- in his Punjab National Bank account for which it was stated the source was his earlier income or savings. The Ld. AO also noted that the assessee had also deposited cash of ₹2,85,000/- in his State Bank of India account which was stated to be the cash sales of paints. Also, in Punjab National Bank account an amount of ₹10,23,000/- was deposited, the source of which was stated to be partly cash sales of paint and partly receipt from debtors. Notice u/s 142(1) of the Act was issued to furnish a true and correct return of income as per the provisions of the Act and as per format prescribed in Rule 12 of the Income Tax Rules, 1962, in response to which the assessee did not respond and file any return of income. Subsequently, a show cause notice u/s 148 of the Act was issued on 19.06.2019 in response to which the assessee filed his return of income showing total income of ₹3,25,980/-. Since the no satisfactory explanation was furnished by the assessee regarding the source of the cash deposits in the bank accounts, the Ld. AO added a sum of ₹55,13,183/- as unexplained money u/s 69A of the Act to the returned income of the assessee and the total income was assessed at ₹58,39,163/- u/s 144 of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 07.11.2024 dismissed the appeal of the assessee by holding as under: “4. Findings:- The appellant was issued notices on 04.01.2021, 27.01.2021 and 21.02.2024. In response thereto the appellant on dated 27.02.2024 submitted some attachments (Balance Sheet, Trading Account, Computation and Receipt of ITR-V only) without any covering letter. Again, notices were Printed from counselvise.com Page | 4 ITA No(s). 1540/KOL/2025 Assessment Year(s) 2017-18 Jayanta Das. issued to the appellant on 29.02.2024 and 14.10.2024 to submits its detailed reply, but no reply or nor any adjournment requested by the appellant. Further on 21.10.2024 notice was again issued to the appellant to submit his response by 28.10.2024, in which it was specifically, mentioned that \"Please refer to this office notice dated 14.10.2024 vide DIN No.: ITBA/NFAC/F/APL_1/2024-25/1069654542(1). It is observed that, compliance was to be made to this office notice by you on 21.10.2024, but however the same was ignored. Hence, please submit your details by or before 28.10.2024, failing which the case shall be decided on merits.\" but the same remain un-complied. The aforementioned circumstances show that the appellant is not interested in pursuing its appeal. The maxim vigilantibus non-dormientibus jura subvenunt i.e. the law assists those who are vigilant and not those who sleep over their right, is applicable in this case. The Hon'ble ITAT in ITA No. 1025-1027/CHD/2005 for the AY 2002-03 in the case of M/s Chhabra Land & Housing Ltd. after following the decision of The Hon'ble Supreme Court in the case of B.N. Bhattacharjee & other 118 ITR 461 [SC] held that the appeal does not mean merely filing of the appeal but effectively pursuing the same. Considering the above facts and material on record, it is held that the assessing officer has made the addition on merits considering facts of the case and no infirmity is noticed in the order of the Assessing officer, hence the appeal of the assessee is dismissed. In the result, appeal of the assessee is dismissed.” 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made have been examined. It was stated by the Ld. AR that a sum of ₹55,13,183/- was added u/s 69A of the Act. The total amount deposited in the bank was on account of sale proceeds, which was shown in the profit and loss account and the same did not relate to SBNs. The money deposited during the demonetization period was only a fraction of ₹55,13,183/-. The closing balance was ₹7,800/-. The assessee stated that he could not attend at the appellate stage but only the balance sheet was submitted. Printed from counselvise.com Page | 5 ITA No(s). 1540/KOL/2025 Assessment Year(s) 2017-18 Jayanta Das. Before us a statement of accounts of Berger Paints India Ltd has been filed and it is also observed that in the bank account cash has been deposited regularly throughout the year. The assessee is a dealer of Berger Paints and most of the sales are claimed to have been made in cash. The notice was served at the residence of the assessee. Therefore, could not be complied with. The profit and loss account, balance sheet were all filed. It was stated that since the deposits in the bank account were more than the sale proceeds which were deposited throughout the year, therefore, the addition was not justified 6. The Ld. DR vehemently argued in favour of the Ld. AO and stated that the order of the Ld. CIT(A) ought to be confirmed. 7. We have considered the facts of the case, the submissions made and the documents filed. Since the assessee had filed the profit and loss account and the sales had not been disturbed which are higher than the cash deposits in the bank account therefore, there is no justification for the addition of the entire deposits made during the financial year as unexplained without disturbing the sales as the Ld. AO has also considered the returned income in which the entire sales have been considered for arriving at the profit. Therefore, the addition is hereby deleted and the grounds of appeal raised by the assessee are allowed. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 24th March, 2026. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 24.03.2026 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 6 ITA No(s). 1540/KOL/2025 Assessment Year(s) 2017-18 Jayanta Das. Copy of the order forwarded to: 1. Jayanta Das, 1-FR, FL-1A, Jalkal, 1/1/27/0/2 Maheshtala, South 24 Parganas, West Bengal, 700141. 2. ITO, Ward-45(2), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "