TOSHEVI KEDITSU SEMA,KOHIMA V. INCOME TAX OFFICER, WARD-2, DIMAPUR, DIMAPUR

ITA 241/GTY/2025

AI Insights

The case involves appeals by Toshevi Keditsu Sema against the orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, concerning the assessment years 2014-15 and 2015-16. The primary issues revolved around the initiation of reassessment proceedings under section 147 of the Income Tax Act, 1961, and the applicability of section 10(26) which exempts certain incomes for specific tribes. The Assessing Officer had made additions to the assessee's income based on unaccounted cash deposits and other incomes, which the assessee contested, claiming exemptions under section 10(26). The Tribunal noted the lack of proper compliance and representation in the earlier stages and thus remanded the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791459 (ITAT-GUWAHATI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 25-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings
• Section: 147; 144; 142(1); 133(6)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI ‘DB’ BENCH AT KOLKATA [Virtual Court] Before SHRI MANOMOHAN DAS, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA Nos.: 241 & 242/GTY/2025 Assessment Years: 2014-15 & 2015-16 Toshevi Keditsu Sema Vs. ITO, Ward-2, Dimapur (Appellant) (Respondent) PAN: CMGPS2087B Appearances: Assessee represented by : None (Adj. Petition petition filed) Department represented by : Amit Kumar Pandey, Addl. CIT. Date of concluding the hearing : 26-November-2025 Date of pronouncing the order : 11-December-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: Both these appeals filed by the assessee are against the separate orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AYs 2014-15 & 2015- 16 dated 14.05.2024. Since the issues in both the appeals are common, they were heard together and are being decided vide this common order for the sake of convenience and brevity. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: I. ITA No. 241/GTY/2025; AY 2014-15: “1. For that the initiation of proceedings u/s 147 of the Act by the Assessing Officer is time barred as per the proviso to section 149 of the Act and thus the reassessment proceedings is liable to be quashed. Printed from counselvise.com Page | 2 ITA Nos.: 241 & 242/GTY/2025 AYs: 2014-15 & 2015-16 Toshevi Keditsu Sema. 2. For that the Ld. Assessing Officer was not justified in invoking the provisions of section 69A of the Act and making addition of Rs. 21,72,720.00 in as much as the income of the appellant is exempt u/s 10(26) of the Act. 3. For that the Ld. Assessing Officer was not justified in making addition of Rs. 38,396.00 under the head Income from Other Sources in as much as the income of the appellant is exempt u/s 10(26) of the Act. 4. For that the Ld. CIT(A) was not justified in not accepting the claim of exemption of the appellant u/s 10(26) of the Act.” II. ITA No. 242/GTY/2025; AY 2015-16: “1. For that the initiation of proceedings u/s 147 of the Act by the Assessing Officer is invalid and thus the reassessment proceedings is liable to be quashed. 2. For that the Ld. Assessing Officer was not justified in invoking the provisions of section 69A of the Act and making addition of Rs. 1,68,71,990.00 in as much as the income of the appellant is exempt u/s 10(26) of the Act. 3. For that the Ld. Assessing Officer was not justified in making addition of Rs. 14,436.00 under the head Income from Other Sources in as much as the income of the appellant is exempt u/s 10(26) of the Act. 4. For that the Ld. CIT(A) was not justified in not accepting the claim of exemption of the appellant u/s 10(26) of the Act.” 3. We shall first take up the appeal in ITA No. 241/GTY/2025 for AY 2014-15. Brief facts of the case are that the case of Toshevi Keditsu Sema, was reopened under section 147 of the income Tax Act because the Assessing Officer (“the Ld. AO”)found that the assessee had made cash deposits of ₹2,52,20,220/- in savings bank accounts and had purchased units of Mutual Funds worth ₹15,00,000/- during the financial year 2013-14 and had not filed a return of income for the relevant assessment year. During the course of re-assessment proceedings, the assessee was issued several notices u/s 142(1) of the Act. The assessee however did not respond to most of the notices. The Ld. AO obtained the bank account statements from ICICI Bank u/s 133(6) of the Act, which disclosed that the appellant had deposited cash Printed from counselvise.com Page | 3 ITA Nos.: 241 & 242/GTY/2025 AYs: 2014-15 & 2015-16 Toshevi Keditsu Sema. of ₹21,72,720/- in the said bank account. In view of the provisions of section 69A, as the assessee did not provide any explanation or the necessary documentary evidence for the source of deposits, the AO treated the cash deposits of ₹21,72,720/- in her bank account with the Bank (ICIC) during the financial year 2013-14, investment of ₹15,00,000/- in mutual funds and the interest income of ₹38,396/- aggregating to ₹37,11,116/- as the undisclosed income for the previous year 2013-14 corresponding to the AY 2014-15 and completed the assessment u/s 144 r.w.s. 147 r.w.s. 144B of the Act at the total income of ₹37,11,116/- and also initiated penalty proceedings under sections 271(1)(c), 271(1)(b), and 271F of the Act. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide the order dated 14/05/2024 partly allowed the appeal by holding as under: “5.5 Appellate Decision: On considering the entire factual and legal canvas of the case, it transpires that wherever the income of the eligible Schedule Tribe exceeds the threshold limit for filing income tax return, it is mandatory for them to file their return. In the return the exemption of income as contained u/s 10(26) of the Act can be claimed by submitting necessary evidence to prove that the conditions for grant of exemption are duly met. There is no dispute that the appellant failed to file her ITR for AY 2014-15. She did not comply to the notices issued u/s 148/142(1) and the show cause notices. All the income tax notices are issued through the email and is also available on the Income Tax dashboard of the assessee. The assessee is a retired Govt Servant and has requisite knowledge of law of the land. The appellant is expected to know that the income tax notices are issued through e-mail and is available on dashboard. Therefore, claiming ignorance is without any basis. Besides, it is necessary to prove before the AO, that the income reflected in the bank accounts fulfils the conditions prescribed under the Act. The appellant has enclosed some documents at the appellate stage, but the same had to be submitted before the AO granting him opportunity to examine the correctness of the claim made u/s 10(26) of the Act. The authenticity of documents submitted by the appellant has not been proved. Despite being govt. servant, she does not have any regard for the laws of the land. To claim Printed from counselvise.com Page | 4 ITA Nos.: 241 & 242/GTY/2025 AYs: 2014-15 & 2015-16 Toshevi Keditsu Sema. exemption the appellant has to prove that she satisfies the conditions laid down u/s 10(26). The appellant has failed to do so. From the documents submitted it cannot be proved that the entire cash deposit arose from the business activity of the appellant or her spouse within the eligible territories. Under these background facts and circumstances, the ground nos -1 to 5 has not been proved by the appellant. Accordingly, addition of the cash deposit of Rs.21,72,720/- in the saving bank account and interest income of Rs.38,396/- are confirmed. However, as the cash deposit which is the source of the time deposit is brought to tax, telescopic benefit for the application of the funds as time deposit can be granted. Accordingly, the addition of the time Deposit of Rs. 15,00,000 is deleted. 6. In the result, the appeal is partly allowed.” 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. We have heard the Ld. DR, considered the submissions made and the paper book filed, gone through the facts of the case and also perused the record and the order of the Ld. CIT(A). The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. However, we note that the assessment order was ex parte and in the appeal before the Ld. CIT(A), the assessee could not get the required benefit on account of non-representation though she claims that her income is exempted under section 10(26) of the Act even though partial relief was allowed to her. Since there was no proper compliance before both the Ld. AO as well as the Ld. CIT(A), in the interest of justice and fair play it was considered that another opportunity may be provided and the case may be remanded before the Ld. AO so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remand the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a Printed from counselvise.com Page | 5 ITA Nos.: 241 & 242/GTY/2025 AYs: 2014-15 & 2015-16 Toshevi Keditsu Sema. reasonable opportunity of being heard to make any further submission she wants to make in support of the relief claimed and shall not seek unnecessary adjournments. The assessee shall be at liberty to raise all legal issues before the Ld. AO. Accordingly, the grounds taken by the assessee in this appeal are partly allowed for statistical purposes. 6. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. 7. Since the facts in the appeal in ITA No. 242/GTY/2025 for A.Y. 2015-16 are identical, our findings in A.Y. 2014-15 shall mutatis mutandis also apply in the appeal for A.Y. 2015-16. The grounds taken by the assessee in this appeal are also partly allowed for statistical purposes. 8. In the result, both the appeals are partly allowed for statistical purposes. Order pronounced on 11th December, 2025 under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- [Manomohan Das] [Rakesh Mishra] Judicial Member Accountant Member Dated: 11.12.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 6 ITA Nos.: 241 & 242/GTY/2025 AYs: 2014-15 & 2015-16 Toshevi Keditsu Sema. Copy of the order forwarded to: 1. Toshevi Keditsu Sema, Sector II, House No 19, Kitsubozou Colony, Kohima, Nagaland, 797001. 2. ITO, Ward-2, Dimapur. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Guwahati Benches, Guwahati. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "