MOHAMMAD RAFIQ WARSI,PIPARIYA V. INCOME TAX OFFICER-2, ITARSI, ITARSI

ITA 383/IND/2025

AI Insights

The case involves Mohammad Rafiq Warsi, who appealed against the addition of Rs. 13,70,000 to his income as unexplained money under section 69A of the Income Tax Act, 1961. The Assessing Officer had initially assessed this amount as unexplained due to the assessee's failure to provide satisfactory explanations or evidence regarding the source of the cash deposits. The first appeal was dismissed by the CIT(A), leading to the second appeal before the Income Tax Appellate Tribunal. The Tribunal noted the assessee's lack of compliance and the procedural shortcomings in the assessment, leading to the decision to remand the case for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838485 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 22-04-2025
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIASHISHPORWAL
• Assessee Lawyers: SHRIMILINDWADHWANI
• Keywords: Set aside; Corroborative evidences; Principle of natural justice; Competent authority; Non compliance
• Section: 148; 144; 142(1); 271(1)(c)

Judgement Text

"Page 1 of 12 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M JOSHI, JUDICIAL MEMBER ITA No.383/Ind/2025 (AY: 2013-14) Mohammad Rafiq Warsi, Itwara Bazar pipariya District Hoshangabad, Madhya Pradesh (PAN: AAKPW2243B) बनाम/ Vs. ITO -2, Itarsi (Appellant) (Respondent) Assessee by Shri Milind Wadhwani, CA Revenue by Shri Ashish Porwal, Sr.DR Date of Hearing 16.02.2026 Date of Pronouncement 19.02.2026 आदेश/ O R D E R Per Paresh M Joshi, J.M.: This is an Appeal filed by the Assessee under section 253 of the income tax Act 1961,[ herein after referred to as the Act for the sake of brevity] before this tribunal as & by way of a second Appeal. The Assessee is aggrieved by the order bearingNumber:-ITBA/NFAC/S/250/2024-25/1073837035 (1) dated 28.02.2025 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned order”. The Relevant Assessment year is 2013-14 and the Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 2 of 12 corresponding previous year period is from 01.04.2012 to 31.03.2013. 2. Factual Matrix 2.1 That as and by way of an Assessment order made u/s 148/144 rws 144B of the Act, the total income of the Assessee was computed & assessed at Rs. 13,70,000/-. Income as per the ITR was at NIL. The addition/variation of Rs.13,70,000/- was made as unexplained money u/s 69A of the Act. The aforesaid Assessment order bears No. ITBA/COM/S/91/2021-22/1036033736 (1) & that the same is dated 29.09.2021 which is herein after referred to as the “Impugned Assessment Order” 2.2 In the aforesaid “Impugned Assessment Order” at para 4.1 & 4.2 it is recorded as under:- “4.1 The assessee has deposited cash of Rs. 13,70,000/- in bank account number 53015983831 held with State Bank Of India during the year under consideration. Assessee was asked to provide sources of this cash and reasons for not offering this amount for taxation. 4.2 Assessee was given opportunity to provide complete details regarding sources of this cash. Assessee was Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 3 of 12 issued notice u/s 148 dated 23.03.2020 requiring her to furnish ITR within 30 days. Thereafter a notice u/s 142(1) dated 06.03.2021 and 18.09.2021 was issued to the assessee asking for details and evidences for source of Cash deposit. The assessee has failed to respond any of these notices and did not filed ITR in response to notice u/s 148. Penalty proceedings u/s. 271(1)(b) of the Income Tax Act, 1961 are separately initiated for non compliance of notices. Assessee again failed to provide any evidence regarding this. However, assessee failed to comply and provide any concrete evidence for sources of this cash. Therefore, this office is constrained to treat cash deposited of Rs. 13,70,000/- as unexplained money u/s 69A of the Income Tax Act, 1961, and therefore, added back to the total income of the assessee. Penalty proceedings u/s 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961, are separately initiated for concealment of the income by way of furnishing inaccurate particulars of income. [Addition of Rs. 13,70,000/-]” 2.3 That the assessee being aggrieved by the aforesaid “Impugned Assessment Order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the first appeal of the assessee on the grounds & reasons stated therein. The core grounds & reasons for the dismissal of the first appeal were as under:- “6. The brief facts of the case are that the appellant had not filed its return of income for the year under Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 4 of 12 consideration u/s.139(9) of the I.T. Act. As per information, the appellant had made cash deposits of Rs. 13,70,000/- in his bank account for the year under consideration. Accordingly the case was reopened u/s.147 vide issue of notice u/s.148 on 23.03.2020after obtaining necessary approval from the competent authority and served on the appellant. However, the appellant failed to file the return of income. Thereafter, notices u/s. 142(1) were issued to the appellant on 06.03.2021 and 18.09.2021 calling for requisite information in connection with the assessment proceedings. However, the appellant did not make any compliance to the same. Accordingly, the Assessing Officer completed the assessment under section 144 of the Act, adding Rs. 13,70,000/- as unexplained money u/s. 69A of the I.T. Act and Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 5 of 12 Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 6 of 12 6.3 Under the circumstances, it is presumed that the appellant is not interested to pursue this appeal and it has nothing to say in defence of the grounds of appeal taken. Therefore, I have no option but to decide the appeal on merits on the basis of materials on record. 6.4 The present appeal is against the order w/s.144 of the Income Tax Act, 1961 passed by the Assessing Officer. I have carefully perused the grounds of appeal and statement of facts as well as the assessment order made by the Assessing Officer. 6.4.1 Through Ground no.1, the appellant has contested against passing of assessment order u/s.144 stating that the same was prejudicial in interest of the justice and bad in law. During the appellate proceedings, the appellant has not provided any concrete evidence showing that the assessment order is bad in law. Hence, the ground raised by the appellant is dismissed. 6.4.2 Ground nos.2 to 4 relate to the addition of Rs. 13.70.000/- u/s 69A of the Act on account of cash deposit made by the appellant. The appellant contended before the appellate authority that he is a daily wages labourer working on road side making labour work of TIN Parts and the cash deposits are out of his mothers earnings and sale of rural agricultural land and the same was withdrawn due to family disputes and distributed among family members and were utilized for medical expenses of mother. The appellant further claimed that he was illiterate and was not aware of income tax proceedings and was not registered under e portal. The Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 7 of 12 appellant has stated that the order is opposed to the facts of the case and the appellant being a mere labourer cannot afford the counsel's services to represent his case and the case is pro bono by the counsel in the interest of justice to the appellant. However, it is abundantly clear from the assessment order that inspite of multiple opportunities afforded, the appellant has failed to offer any explanation with documentary evidence as sought by the AO to explain the source of cash deposits in its bank account. Even during the course of appellate proceedings, inspite of multiple opportunities afforded, the appellant remained non compliant and did not offer any explanation with supporting evidence or documents to controvert the action of the Assessing Officer against his claim but merely requested the FAA to set aside the matter to the file of the AO to make fresh assessment. Another notice was issued to the appellant seeking details/documents in support of his grounds to determine if this was a fit case for setting aside the appeal to the file of the AO for making fresh assessment in view of the submissions made before the FAA. However, the appellant did not make any compliance till date. It is pertinent to mention here that the power to set aside the appeal can only be exercised provided the appellant submits relevant documentary evidence before the FAA, which he could not submit before the Assessing Officer. Accordingly, the grounds raised by the appellant are dismissed. 7. As a result, appeal is dismissed.” 2.4 The Assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & has raised following grounds of appeal in the Form No. 36 against the “Impugned Order” which are as under:- Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 8 of 12 “1. On the facts and in the circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC) erred in upholding the action of the Learned Assessing Officer (AO) in making an addition of Rs. 13,70,000/- to the income of the appellant as unexplained money under section 69A of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in upholding, the order passed by the Assessing Officer. 3. On the facts and in the circumstances of the case and in law, the Learned NFAC erred in not holding that the assessment order dated 24.09.2021 is erroneous, bad in law, void ab initio, and liable to be quashed. 4. On the facts and in the circumstances of the case and in law, the Learned NFAC erred in not setting aside the assessment order to the file of the Learned AO for conducting a fresh assessment after providing due opportunity to the appellant. 5. The appellant craves leave to add, amend, alter, vary and/or withdraw any of the above grounds of appeal at any time before or during the course of the hearing.” 3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 16.02.2026 when the Ld. AR for and on behalf of the assessee appeared before us and interalia contented that the “Impugned Order” is bad in law, illegal and not proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside. It was contended by the Ld. AR that only draft assessment order was on the Income Tax portal. The assessee is a black smith & is residing in a joint family set up. The assessee is not conversant with the income tax procedure, computer operations or internet usage. Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 9 of 12 Since the assessee was not registered on the income tax e-filling portal, he could not reply to any of the notice(s) issued by the Ld. AO. Before the CIT(A) a part response by letter dated 23.01.2025 was made wherein it was requested that the “Impugned Assessment Order” be set aside. Para 6.4.2 was read out by the Ld. AR during the hearing which is already reproduced by us (Supra). It was finally prayed that the “Impugned Order” be set aside & the matter be remanded back to the file of Ld. AO for fresh adjudication on denovo basis. Per contra the Ld. DR appearing for the on behalf of the revenue contended that the department of Income tax has No. objection if the matter is remanded back to the file of Ld. AO. Hearing was then concluded. 4. Observations Findings & conclusions 4.1 We have to decide the legality, validity and proprietary of the “impugned order” basis records of the case & the rival submission canvassed before us. 4.2 We have carefully perused the records of the case and have heard the submissions. Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 10 of 12 4.3 We basis records of the case & after hearing & upon examining the rival contentions of the Ld. AR and the Ld. DR canvassed before us, are of the considered opinion that the “Impugned Assessment Order” is under section 144 of the Act & that the matter has not been adjudicated and adjudged basis merits. The assessee is a black smith by profession. He is illiterate & has no knowledge of technology. The Assessee is not even registered on Income Tax Portal. Even the impugned order is not on merits. The assessee sought remand of the case back to the file of the ld. AO as the “Impugned Assessment Order” was under section 144 of the Act vide letter dated 23.01.2025 which too was not sympathetically considered. We observe that even the “Impugned Order” has followed the “Impugned Assessment Order” u/s 144 of the Act. Nothing new is before the first appellate authority [FAA]. This Tribunal desires that the total Income of the assessee should be computed & assessed on the real time basis exigible to Tax in accordance with law by following the due process of law under the Act. This Tribunal also expects the assessee to be compliant & should Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 11 of 12 cooperate with the department of Income Tax, as & when notice(s) are issued. In brief this Tribunal desires that there should be meritorious disposal of both the “Impugned Assessment Order” as well as the “Impugned Order”. The assessee cooperation in this regard assumes importance. The assessee cannot go in slumber mode. In the result we are of the considered opinion that the “Impugned Order” should be set aside & the matter should be remanded back to the file of Ld. AO for passing a fresh order on merits of the case. It is the expectation of this tribunal that the assessee would give his full & complete postal details including latest e- mail of his & of his counsel where notice(s) etc could be served effectively by the department of Income Tax. The assessee to attend hearings as & when fixed & to file reply & the details as may be sought by the Ld. AO. The assessee to file reply, submissions, in support of his defences. 4.4 In view of the above, We set aside the “Impugned Order” & remand the case back to the file of Ld. AO on denovo basis, who shall now pass a speaking & well-reasoned order. Printed from counselvise.com Mohammad Rafiq Warsi ITA No. 383/Ind/2025 - A.Y.2013-14 Page 12 of 12 5 Order 5.1 In the result, the Impugned order is set aside as and by way of a remand back to the file of the Ld. AO. 5.2. The appeal of the Assessee is allowed for statistical purpose. Pronounced in open court on 19.02.2026. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore Dated : 19/02/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Printed from counselvise.com "