NIDHI JAIN,C/O DESHLAHRA INDUSTRIES, NANDINI ROAD BHILAI V. INCOME TAX OFFICER WARD 1 (1), BHILAI, BHILAI

MA 20/RPR/2025

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The case involves Nidhi Jain, who filed a miscellaneous application arising from an earlier Tribunal order concerning the assessment year 2017-18. The original dispute centered on unexplained cash deposits made during the demonetization period, which were added to her income under section 69A of the Income Tax Act. The Tribunal had earlier scaled down the addition to Rs.3,00,000 based on CBDT Instruction No.03/2017, which states that no further verification is required for cash deposits up to Rs.2.5 lakh for individuals without business income. The assessee's application sought to recall the Tribunal's order, arguing that the order was ex-parte and lacked proper opportunity for hearing, which the Tribunal found insufficient to warrant a recall under section 254(2).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714175 (ITAT-RAIPUR)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-08-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Other Referred Cases: T.S. Balaram, ITO v. Volkart Bros., (1971) 82 ITR 50 (SC), Commissioner of Income Tax (IT-4) Vs. Reliance Telecom Ltd., (2021) 133 taxmann.com 41 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: SUNIL KUMAR AGRAWAL
• Keywords: Business income
• Section: 143(3)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER M.A. No.20/RPR/2025 (Arising out of ITA No.28/RPR/2025) Ǔनधा[रण वष[/Assessment Year : 2017-18 Nidhi Jain C/o. Deshlahra Industries, Nandini Road, Bhilai, Durg (C.G.) -490 001 PAN: AFHPJ2470H .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(1), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Sunil Kumar Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 08.08.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 08.08.2025 Printed from counselvise.com 2 MA No.20/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The captioned Miscellaneous Application has been filed by the assessee arising out of order passed by the Tribunal in ITA No.28/RPR/2025, dated 19.02.2025 for assessment year 2017-18 u/s.254(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Before proceeding any further, it would relevant to cull out the observation of the Tribunal in the impugned order which reads as follows: “5. Succinctly stated, the assessee had e-filed her return of income for A.Y.2017-18 on 15.03.2018, declaring an income of Rs.2,89,400/-. Subsequently, the case of the assessee was selected for scrutiny assessment through CASS to verify the “cash deposits during demonetization period”. 6. During the course of the assessment proceedings, the A.O observed that the assessee had made cash deposits of Rs.5,50,000/- and Rs.7,00,000/- in her bank account No.32654876179 and account No.30265716144 held with State Bank of India. On being queried about the source of the aforesaid cash deposits, it was submitted by the assessee that the bank account No. 30265716144 was a joint account held by her alongwith her husband, viz. Shri Vinod Jain and the cash deposits of Rs.7 lacs made in the said bank account pertained to him. The assessee in order to support her aforesaid claim had placed on record copy of the return of income a/w. consent letter of her husband, viz. Shri Vinod Jain. Apropos the cash deposits of Rs.5.50 lacs that was made in her bank account No. 32654876179 with State Bank of India, it was submitted by the assessee that the same was sourced out of the cash in hand that she had retained for her personal expenses. The assessee to support her aforesaid claim had filed before the A.O s copy of her balance sheet and capital a/c. as was called for by him. Accordingly, it was the assessee’s claim that she was having Printed from counselvise.com 3 MA No.20/RPR/2025 sufficient cash in hand (SBNs) as on 01.11.2016 during the pre-demonetization period which had sourced the subject cash deposits made in her bank account during the demonetization period. The A.O called for the bank statements of the assessee from State Bank of India for the period 01.04.2016 to 31.03.2017, and observed that the same revealed that the assessee had during the demonetization period made cash deposits of Rs.5,50,000/- in three tranches, viz. (i) 21.11.2016 : Rs.1,50,000/-; (ii) 19.12.2016 : Rs.1,00,000/-; and (iii) 19.12.2016 : Rs.3,00,000/-. 7. Also, a perusal of the bank account of the assessee, reveals that the cash deposits made by her, were thereafter, withdrawn in cash. As the assessee had failed to substantiate the source of the aforesaid cash deposits made during the demonetization period to the satisfaction of the A.O, therefore, the latter held the same as her unexplained money u/s. 69A of the Act. Accordingly, the A.O based on his aforesaid deliberations, had vide his order passed u/s. 143(3) of the Act, dated 12.12.2019 after making an addition of Rs.5,50,000/- determined the income of the assessee at Rs.8,39,400/-. 8. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). As the assessee despite having been afforded three opportunities i.e. on 31.01.2021, 11.09.2024 and 08.10.2024 had failed to participate in the proceedings before the first appellate authority, therefore, the latter was constrained to proceed with and dispose of the appeal vide an ex-parte order. After deliberating at length, on the facts involved in the case before him, though the CIT(Appeals) principally concurred with the A.O that the assessee had failed to come forth with any explanation as regards the cash deposits of Rs.5,50,000/- made in her bank account, but at the same time was of the view that she at the relevant point of time would have been in possession of cash in hand of Rs. 1 lac for personal purposes. Accordingly, the CIT(Appeals) scaled down the addition made by the A.O u/s. 69A of the Act to Rs.4,50,000/- and allowed a relief of Rs.1 lac. 9. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. As the assessee appellant despite having been intimated about the fixation of hearing of the appeal has neither put up an appearance nor filed any adjournment application, therefore, I am constrained to proceed with as per Rule 24 of the Appellate Tribunal Rules, 1963 and Printed from counselvise.com 4 MA No.20/RPR/2025 dispose of the appeal after hearing the revenue respondent and perusing the material available on record. 10. Admittedly, it is a matter of fact borne from record that the assessee in the course of assessment proceedings had failed to come forth with any explanation as regards the source of the cash deposits of Rs.5.50 lacs that was made in her bank account No. 32654876179 with the State Bank of India. Though the A.O had held the entire amount of Rs.5,50,000/- as the assessee’s unexplained money u/s. 69A of the Act, but the CIT(Appeals) had scaled down the addition to Rs.4,50,000/-. 11. I have given thoughtful consideration to the facts involved in the present case. At the threshold, I may hereinabove observe that the CBDT Instruction No.03/2017 dated 21.02.2017, which is binding on the revenue, had, inter alia, stated that in case of an individual (either than minors) not having any business income, no further verification is required to be made if total cash deposit is up to Rs.2.5 lakh. Also, it is stated in Instruction No. 03/2017 (supra) that the basis for verification can be the income earned during past years and its source, filing of return of income and income therein shown, cash withdrawals from accounts, etc. For the sake of clarity, the CBDT Instruction No.03/2017 dated 21.02.2017 is culled out as under (relevant extract): \"1.1 In case of an individual (either than minors) not having any business income, no further verification required to be made if total cash deposit is up to Rs.2.5 lakh. In case of taxpayers above 70 years age, the limit is Rs.5 lakh per person. The source of such amount can be either household savings/savings from past income or amounts claimed to have been received from any of the sources mentioned in Paras 2 to 6 below. Amounts above this cut-off may require verification to ascertain whether the same is explained or not. The basis for verification can be income earned during past years and its source, filing of ROI and income shown therein, cash withdrawals made from accounts etc.\" (emphasis supplied by me) Accordingly, as per the CBDT Instruction No. 03/2017, dated 21.02.2017, it can safely be concluded that out of the cash deposit of Rs.5.50 lac made during the demonetization period in the bank account by the assessee, no adverse inferences Printed from counselvise.com 5 MA No.20/RPR/2025 could have been drawn by the A.O as regards the cash deposits of Rs.2.50 lacs in the backdrop of the concession given by the CBDT. I, thus, in terms of the aforesaid CBDT Instruction No.03/2017, dated 21.02.2017. I, thus, in terms of my aforesaid observations scale down the addition to Rs.3 lacs [Rs.5,50,000/-(-) Rs.2,50,000/-]. Thus, the Ground of appeal No.1 raised by the assessee is partly allowed in terms of the aforesaid observations. 12. The Grounds of appeal No. 2 & 3 being general in nature are dismissed as not pressed. 13. In the result, appeal filed by the assessee is partly allowed in terms of the aforesaid observations.” 3. The Ld. Counsel for the assessee failed to point out any mistake apparent from record in the aforesaid findings of the Tribunal. He has only reiterated the same submissions that since it is an ex-parte order, therefore, the same should be recalled. He further submitted that at the time of original hearing, there was neither any paper book filed by the assessee nor proper opportunity of hearing was provided to the assessee. 4. Per contra, the Ld. Sr. DR submitted that nothing has been submitted by the assessee pointing out any mistake apparent from the order of the Tribunal. It was submitted by the Ld. Sr. DR that the fact of the order of the Tribunal is absolutely correct and the same does not call for any intervene as per Section 254(2) of the Act. 5. Having heard the submissions of the parties herein and on careful consideration, I am of the considered view that the plea taken by the assessee through this miscellaneous application amounts to review of the Printed from counselvise.com 6 MA No.20/RPR/2025 order of the Tribunal which is beyond the scope of Section 254(2) of the Act. The only submission that has been put forth by the Ld. Counsel for the assessee that it is an ex-parte order and hence, should be recalled. However, the same cannot be the ground as envisaged u/s.254(2) of the Act to recall any order passed by the Tribunal. That further, the Ld. Counsel for the assessee even objected to the findings arrived at by the Tribunal which again tantamount to review of its own order by the Tribunal which is not permissible within the ambit of Section 254(2) of the Act. The aforesaid view is supported by the judgment of the Hon'ble Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros., (1971) 82 ITR 50 (SC), wherein the Hon'ble Apex Court had held as under: \" ....A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question.......an error which has to be established by a long-drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on debatable point of law is not a mistake apparent from the record........\" Also, a similar view had been taken by the Hon'ble Supreme Court in the case of Commissioner of Income Tax (IT-4) Vs. Reliance Telecom Ltd., (2021) 133 taxmann.com 41 (SC), wherein it was held as under: Printed from counselvise.com 7 MA No.20/RPR/2025 \"From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that.” 6. Considering the aforesaid facts and on careful perusal of the judicial pronouncements, I am of the view that as the assessee in the garb of the present application filed u/s.254(2) of the Act had, in fact, sought for a review of the order so passed by the Tribunal while disposing off the appeal, which as observed by me hereinabove does not fall within the realm of the powers vested with it u/s. 254(2) of the Act. Accordingly, the miscellaneous application filed by the assessee u/s.254(2) of the Act is dismissed in terms of the aforesaid observations. Printed from counselvise.com 8 MA No.20/RPR/2025 7. In the result, the miscellaneous application filed by the assessee company being devoid and bereft of any merits is dismissed. Order pronounced in open court on 8th day of August, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 8th August, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "