SHASHI BHALLA,LAKHIMPUR KHERI V. ITO RANGE-3(5), LAKHIMPUR KHERI

ITA 675/LKW/2024

AI Insights

This case involves an appeal by Shashi Bhalla against the order of the Commissioner of Income Tax (Appeals), which set aside the assessment order and directed a fresh assessment by the Assessing Officer. The original assessment added significant amounts to the assessee's income based on cash deposits during the demonetization period, which the assessee contended were from past savings and not unaccounted income. The Tribunal found that the CIT(A) did not properly address the merits of the case and merely referred the matter back for a fresh assessment without adequate reasoning, leading to the setting aside of the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785048 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 18-11-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.R.N. SHUKLA
• Keywords: Set aside; Salary income; Gift
• Section: 144; 44AD

Judgement Text

"I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘B’, LUCKNOW BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.675/Lkw/2024 Assessment Year: 2017-18 Shashi Bhalla Opposite Kotwali, Main Road, Lakhimpur Kheri, U.P. PAN:ADFPB8087Q Vs. Income Tax Officer, Range-3(5), Lakhimpur Kheri. (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) This appeal vide I.T.A. No.675/Lkw/2024 has been filed by the assessee for assessment year 2017-18 against impugned appellate order dated 25/10/2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1069940506(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. The grounds raised by the assessee are as under: “1. The Ld. CIT(A) NFAC erred on facts and law in setting aside the Assessment Order to the file of Assessing Officer for fresh adjudication without appreciating that assessee has submitted Appellant by None Respondent by Shri R.R.N. Shukla, Addl. CIT (D.R.) Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 2 written submission on merits regarding addition of Rs.45,60,907/- u/s 69A r.w.s 115BBE of I.T. Act. 2. The Ld. CIT(A) NFAC erred on facts and in law in not appreciating that addition of Rs.39,02,000/- being Cash Deposited in Bank during Demonetization Period u/s 69A of I.T. Act r. w. s. 115BBE of I. t. Act was out of Past Savings Lying as Cash in hand as shown in the Return of A. Y. 2016-17 and Cash received during the year out of Cash Income and Cash Gifts from her Brother's wife. 3. The Ld. CIT(A) NFAC fails to appreciate that being an old age, the assessee is keeping Cash for safety and medical purposes out of savings from income of earlier years as shown in the Income Tax Return of earlier year and out of current year income which was deposited in Bank during demonetization period hence same cannot be treated as Income u/s 69A of I.T. Act. 4. The Ld. CIT(A) NFAC failed to appreciate that Assessee is showing Income from Business and Profession Rs.5,06,475/- u/s 44AD of I. T. Act and Income from Salary Rs.2,28,000/-. In addition to this Income from other sources is Rs.2,94,288/-.” (B) In this case assessment order dated 20/12/2019 was passed u/s 144 of the I. T. Act whereby the assessee’s total income was assessed at Rs.54,29,667/- as against returned income of Rs.8,68,760/-. In the aforesaid assessment order, an addition of Rs.39,02,000/- and a further addition of Rs.6,58,907/- were made on account of cash deposited by the assessee in bank. The assessment order was passed ex-parte qua the appellant assessee. The relevant portion of the aforesaid assessment order is reproduced below: Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 3 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 4 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 5 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 6 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 7 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 8 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 9 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 10 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 11 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 12 (C) The assessee filed appeal against the aforesaid assessment order in the office of the learned CIT(A), which was dismissed vide impugned appellate order dated 25/10/2024 of the learned CIT(A). The learned CIT(A), vide aforesaid appellate order, set aside the assessment order and directed the Assessing Officer to make assessment afresh. The relevant portion of the order of the learned CIT(A) is reproduced as under: Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 13 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 14 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 15 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 16 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 17 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 18 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 19 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 20 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 21 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 22 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 23 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 24 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 25 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 26 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 27 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 28 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 29 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 30 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 31 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 32 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 33 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 34 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 35 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 36 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 37 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 38 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 39 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 40 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 41 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 42 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 43 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 44 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 45 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 46 Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 47 (C.1) The present appeal has been filed by the assessee against the aforesaid impugned appellate order. At the time of hearing, the assessee was represented by none. In the absence of any representation from assessee’s side, learned Departmental Representative was heard, who relied on the impugned appellate order of learned CIT(A) and left the matter to the discretion of the Bench. (D) In ground No. 1 of appeal, the appellant assessee has contended that the learned CIT(A) erred on facts and law in setting aside the issue to the file of the Assessing Officer for fresh adjudication without adjudicating the assessee’s appeal on merits. On perusal of the impugned appellate order of Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 48 the learned CIT(A), the relevant portion of which has been reproduced in foregoing paragraph (C) of this order, the contention of the assessee is found to be correct. The assessee had filed written submissions on merits but the learned CIT(A) took no view on the merits of the additions. The learned CIT(A) has set aside the assessment order merely because as per amendment with effect from 01/10/2024, the CIT(A) has been empowered to set aside the assessment and refer the case back to the Assessing Officer for making fresh assessment. The reason mentioned by the learned CIT(A) for setting aside the assessment back to the Assessing Officer for making a fresh assessment is that there was huge pendency of appeals and disputed tax demands at the CIT’s stage. However, in our opinion, the learned CIT(A) has failed to discharge the statutory role prescribed under section 250(6) of the Act, which is reproduced below for the ease of reference: Section-250 (6) The order of the 67[Joint Commissioner (Appeals) or the] Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. Huge pendency of appeals and disputed tax demands, is not a valid reason for the CIT(A) to avoid his aforesaid statutory role. The learned CIT(A) has erred in taking an easy way out for disposal of the appeal without giving a proper reason for setting aside the assessment. Therefore, the impugned appellate order of the learned CIT(A) is set aside with the direction to pass de novo appellate order in accordance with law after providing reasonable opportunity to the assessee, in conscious discharge of his statutory role as prescribed under section 250 and 251 in particular, and other provisions of Printed from counselvise.com I.T.A. No.675/Lkw/2024 Assessment Year:2017-18 49 law in general. All the grounds of appeal are treated to be disposed of in accordance with the above directions. (E) In the result, the appeal of the assessee is partly allowed for statistical purposes. (Order pronounced in the open court on 11/11/2025) Sd/. Sd/. (KUL BHARAT) (ANADEE NATH MISSHRA) Vice President Accountant Member Dated:11/11/2025 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. Concerned CIT 4. D.R. ITAT Printed from counselvise.com "