TEJARAM CHOUDHARY,GUJARAT V. INCOME TAX OFFICER, WARD-2(3)(1), BANGALORE

ITA 508/BANG/2025

AI Insights

Tejaram Choudhary, the appellant, contested the order of the CIT(A)/NFAC which upheld the reopening of his case under section 147 of the Income Tax Act, 1961, and the subsequent addition of cash deposits as undisclosed income under section 69. The case originated from the assessee being identified as a non-filer and having made significant cash deposits which were not reported in any income tax return. The AO treated these deposits as concealed income due to non-disclosure of full and true material facts by the assessee. The CIT(A) dismissed the appeal due to the assessee's non-compliance in providing necessary documents and evidence. The Tribunal, considering the assessee's health issues and previous non-compliance, decided to remit the case back to the AO for a fresh assessment, providing the assessee another opportunity to present his case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 847233 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Bangalore
• Assessment Year: 2011-2012
• Appeal Filed On: 10-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUBRAMANIAN
• Assessee Lawyers: SHEETAL BORKAR; NOT DISCLOSING FULL; TRUE MATERIAL FACTS
• Keywords: Opportunity of being heard; Principle of natural justice; Tangible material
• Section: 147; 148; 144; 142(1)

Judgement Text

"ITA No.508/Bang/2025 Tejaram Choudhary, Surat IN THE INCOME TAX APPELLATE TRIBUNAL “B’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.508/Bang/2025 Assessment Year: 2011-12 Tejaram Choudhary Shop No.1088, Mahavir Textile Market Ring Road Surat 395 002 Gujarat PAN NO : AJJPC3975G Vs. ITO Ward 2(3)(1) Bengaluru APPELLANT RESPONDENT Appellant by : Dr. Sheetal Borkar, A.R. Respondent by : Sri Subramanian, D.R. Date of Hearing : 26.02.2026 Date of Pronouncement : 23.03.2026 O R D E R PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of the ld.CIT(A)/NFAC dated 13/09/2023 vide DIN and Order No: ITBA/NFAC/S/250/2023-24/1056044459(1) passed u/s. 250 of the Income Tax Act, 1961 (in short “the Act”) for the AY 2011- 12. 2. The assessee has raised the following grounds of appeal:- 1. The learned Assessing Officer (AO) erred in passing the order without following due procedure and in the manner in which the order was passes, rendering the assessment order invalid. 2. The learned Commissioner of Income Tax (Appeals) (CIT(A) erred in law and on facts in upholding the reopening of the case under section 147 of the Income Tax Act, 1961, without satisfying the condition precedents for reopening. Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 2 of 9 3. The learned CIT(A) erred in assuming that the cash deposits in the appellant’s bank account constituted undisclosed income without considering the nature of the appellant’s business and the source of the cash deposits. 4. The learned CIT(A) failed to appreciate that the reopening of the assessment without valid reason and tangible material is bad in law. 5. The learned CIT(A) failed to provide adequate opportunity to the appellant to explain the source of the cash deposits, thereby violating the principles of natural justice. 6. The learned CIT(A) erred in sustaining the addition of cash deposits as undisclosed income u/s. 69, which is arbitrary, unjustified, and bad in law. 7. Without prejudice to the above grounds, the impugned additions are unwarranted, excessive and liable to be deleted in their entirely. 8. For these and any other grounds that may be raised at the time of hearing, the Appellant respectfully prays that the appeal be allowed, and the additions made be deleted in full. 3. At the outset, the ld. A.R. of the assessee submitted that there is a delay 466 days in filing the appeal before this Tribunal. The ld. A.R. of the assessee also drew our attention to an affidavit sworn before the notary public dated 20/02/2026 by the assessee stating the reason for the delay along with the medical certificate obtained from the Narayana Hrudayalaya, which are reproduced below: Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 3 of 9 Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 4 of 9 Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 5 of 9 Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 6 of 9 3.1 On going through the above affidavit as well as medical certificate, we observed that the main cause for the delay in filing the appeal was on account of cardiac surgery of the assessee and subsequent medical care and follow up by the doctor which is supported by the medical certificate produced before us. 3.2 Having heard the ld. Council for the assessee and the ld. D.R., it is perceived that the explanation offered by way of an affidavit is plausible and sufficient cause being shown by the assessee which prevented him by filing the appeal within the prescribed period and accordingly we are inclined to condone the delay of 466 days in filing the appeal before this Tribunal and admit the appeal for adjudication. 4. The Brief facts of the case are that the assessee was identified as a non-filer in the non-filer management system (NMS) and there is also an AIR information that although the assessee had deposited cash of Rs.16,26,900/- in IDBI Bank for the period relevant to AY 2011-12 but did not file any return of income. Since more than 4 years had lapsed from the end of the assessment year under consideration, prior approval for re-opening the assessment was obtained from Pr.CIT-1, Surat and accordingly notice u/s. 148 of the Act was issued on 29/03/2018 by the ITO, Ward-1(2)(5), Surat along with 142(1) of the Act. Thereafter, Pr.CIT-1, Surat vide Order u/s. 127 of the Act dated 18/09/2018 had transferred the case to the Jurisdiction of the ITO, Ward-2(3)(1), Bangalore. During the course of assessment proceedings, the AO observed that right from the date of identification as non-filer, the assessee is a habitual non-filer and had a history of non-compliance. Under the above circumstances, the non-compliance on the part of the assessee leads to the believe that the cash deposit in IDBI Bank of Rs.16,26,900/- as projected in Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 7 of 9 the AIR information had escaped assessment as there is failure on the part of the assessee by not disclosing full and true material facts and accordingly the entire cash deposit of Rs.16,26,900/- was treated as concealed income of the assessee. The AO completed the assessment proceedings on a total assessed income of Rs.16,26,900/- and accordingly determined tax payable amounting to Rs.9,64,280/-. 5. Aggrieved by the assessment completed u/s. 147 r.w.s 144 of the Act dated 21/12/2018, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 6. The ld. CIT(A)/NFAC dismissed the appeal of the assessee on the ground that the assessee, despite providing 6(six) nos. of opportunities, failed to submit any supporting documents/ evidences/ contention in support of the grounds of appeal and statement of facts and remain non-compliant and accordingly the ld. CIT(A)/NFAC constrained to sustain the order of the AO and dismissed the appeal of the assessee. 7. Again, aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present before this Tribunal. 8. Before us, the ld. A.R. of the assessee vehemently submitted that the assessee is into the business of Sarees and the entire business proceeds were only deposited into bank account. The ld. A.R. also submitted that the assessee could not represent his case before both the authorities below and accordingly prayed that one more opportunity may be granted before the AO to substantiate the claim as made by the assessee. Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 8 of 9 9. The ld. D.R. on the other hand vehemently objected for remanding the matter back to the file of AO as requested by the ld. AR of the assessee by contending that the assessee is very callous in his approach before both the authorities below & accordingly prayed that the appeal may be dismissed in limine. 10. We have heard the rival submissions and perused the material available on record. Before us, the ld. A.R. of the assessee contended that the assessee is into the business of sale and purchase of Sarees and the business proceeds were only deposited into the IDBI Bank account. It is an undisputed fact that the assessee could not represent his case before both the authorities below. The reason cited by the ld. A.R. is that due to shifting from Surat to Bengaluru as well as due to the fact that assessee under gone Heart surgery and needs subsequent medical care could not attend before the authorities below. This being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we deemed it fit and proper to remit the entire issue in dispute to the file of AO to decide a fresh in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to co-operate with the proceedings before the AO and submit all the necessary documents/ record/ evidences as required by the AO for completion of assessment. We make it clear that in case of further default, the assessee shall not be entitled for any leniency. It is ordered accordingly. 11. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Printed from counselvise.com ITA No.508/Bang/2025 Tejaram Choudhary, Surat Page 9 of 9 Order pronounced in the open court on 23rd Mar, 2026 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Keshav Dubey) Judicial Member Bangalore, Dated 23rd Mar, 2026. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. Printed from counselvise.com "