SHAHJAD,MEERUT V. ITO, WARD 2(5), MEERUT

ITA 2660/DEL/2024

AI Insights

The case involves an appeal by the assessee, Shahjad, against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which arose from an assessment order concerning unexplained cash deposits amounting to INR 1,37,81,029 in the assessee's bank accounts for the assessment year 2016-17. The AO had initiated proceedings under sections 147, 144, and 144B of the Income Tax Act, 1961, following the issuance of a notice under section 148 due to large cash deposits discovered in the assessee's accounts. The assessee contested the additions made by the AO, claiming that the deposits were proceeds from his dairy business. However, the Tribunal found that the assessee had not complied with statutory notices and requirements, leading to a non-compliance assessment under section 144. The Tribunal decided to remit the matter back to the AO for a thorough examination and factual verification of the assessee's claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23861 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Other Referred Cases: CIT vs T. Rangroop Chand Chordia [2016] 69 taxmann.com 202 (Madras)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: ROHIT AGARWAL
• Keywords: Set aside
• Section: 147; 148; 144; 142(1); 143(2)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “G” BENCH: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.2660/Del/2024 [Assessment Year : 2016-17] Shahjad 13, Ghosiyan, Near Sardhana Church Sardhana, Meerut Uttar Pradesh-250342 PAN-FMEPS9251N vs ITO Ward-2(5) Meerut APPELLANT RESPONDENT Appellant by Shri Rohit Agarwal, CA Respondent by Shri Sahil Kumar Bansal, Sr. DR Date of Hearing 19.03.2025 Date of Pronouncement 19.03.2025 ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal has been filed at the instance of the assessee seeking to assail the First Appellate order dated 28.03.2024 passed by Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“CIT(A)”] under s. 250(6) of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 24.03.2022 passed under s. 147 r.w.s 144 r.w.s 144B of the Act pertaining to assessment year 2016-17. 2. As per the grounds of appeal, the assessee has challenged the additions of INR 1,37,81,029/- made by the AO towards unexplained cash deposits in his bank account(s). 3. As transpired in the course of hearing and from the case records, notice under s. 148 was issued requiring the assessee to file the return of income on discovery of large cash deposits in the bank account(s) of the assessee. The assessee has not filed the return of income prior to issuance of such notice under s. 148 of the Act. In pursuance of notice issued under s. 148 dated 23.03.2021, the return of income was not filed within the stipulated time limit of 30 days. Consequently, the proceedings under s. 142(1) were initiated ITA No.3448/Del/2023 Page | 2 without any need for issuance of notice under s. 143(2) of the Act. The assessee however filed return of income after a considerable gap on 21.12.2021. The assessment proceedings at the time of filing of return of income were already initiated and set in motion. The assessee is apparently remained stoically non- compliant to the statutory notices and requirement of law. Hence, the plea of the assessee that notice under s. 143(2) was required to be served on the assessee before initiating the assessment proceedings does not hold any water. Support is drawn in this regard from the judgement rendered in the case of CIT vs T. Rangroop Chand Chordia [2016] 69 taxmann.com 202 (Madras). The objection of the assessee on this count is adjudicated against the assessee. 4. On merits, it is asserted on behalf of the assessee in the course of hearing that the assessee is engaged in dairy, milk supply business and thus the money deposited represents the proceeds of dairy products supplied. The amount is also withdrawn from time to time for purchase of milk etc. and therefore entire cash deposits cannot be regarded as income of the assessee and the allowance for corresponding cash withdrawals ought to have been given to the assessee. 5. Such explanation requires factual verification. There is no evidence on record to show that the assessee is actually engaged in dairy business. The month-wise cash withdrawals and cash deposits is also required to be understood to appreciate the pattern of deposits and withdrawals to come to any definite conclusion. It appears from the record that the assessment order has been framed under s. 144 of the Act owing to non-compliance of the statutory provisions. Hence, it will be in fitness of things to remit the matter back to the file of the AO for denovo assessment in accordance with law after giving opportunity to the assessee. The assessee will be at liberty to raise all contentions and adduce evidence in support of such contentions as may be considered appropriate. Thus, the first appellate order is set aside and matter is restored back to the file of AO. ITA No.3448/Del/2023 Page | 3 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 19th March, 2025. Sd/- Sd/- (VIKAS AWASTHY) JUDICIAL MEMBER (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER *Amit Kumar, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "