VIKAS SINGHI,SOUTH SIKKIM V. DCIT, CIRCLE 3(2), , GANGTOK

ITA 893/KOL/2025

AI Insights

The case involves Vikas Singhi, the appellant, who contested the orders passed by the Assessing Officer and the Commissioner of Income Tax (Appeals) regarding the assessment of his income for the Assessment Year 2017-18. The primary contention was the disallowance of Rs. 11,86,27,937 made by the Assessing Officer, which was upheld by the CIT(A). The disallowance was based on unaccounted cash deposits made during the demonetization period, which the Assessing Officer treated as unexplained income under section 69A of the Income Tax Act. The appellant argued that the deposits were business receipts and that he was a permanent resident of Sikkim, enjoying certain tax exemptions. The Tribunal found that the appellant was not given a fair opportunity to present his case at both the assessment and appellate stages and thus remanded the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772542 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Business income; Opportunity of being heard
• Section: 144; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 893/KOL/2025 Assessment Year: 2017-18 Vikas Singhi Vs. DCIT, Circle-3(2), Gangtok (Appellant) (Respondent) PAN: ABKPS6281L Appearances: Assessee represented by : Siddharth Agarwal, AR. Department represented by : Sanat Kumar Raha, CIT(DR). Date of concluding the hearing : 26-June-2025 Date of pronouncing the order : 28-August-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order 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 AY 2017-18 dated 04.03.2025, which has been passed against the assessment order u/s 144 of the Act, dated 09.12.2019. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that the Ld. CIT(A) ought to have deleted the disallowance of Rs. 11,86,27,937/- made by the A.O. in respect of deposits in bank accounts by wrongly invoking the provisions of section 69A. 2. For that the Ld. CIT(A) ought to have quashed the assessment order dated 09.12.2019 passed by the ITO, Ward 4(5), Jaipur, who had no jurisdiction Printed from counselvise.com Page | 2 I.T.A. No.: 893/KOL/2025 Assessment Year: 2017-18 Vikas Singhi. over the assessee inasmuch as the assessee was the permanent resident of Sikkim. 3. For that the Ld. CIT(A) failed to appreciate that the assessee is a Sikkimese and enjoys exemption u/s 10(26AAA) and as such, the addition made by the A.O. was liable to be deleted. 4. For that the Ld. CIT(A) ought to have appreciated that deposits in Bank accounts were regular business receipts of the assessee from wholesale distribution business and, as such, could not be subjected to tax u/s 69A. 5. Without prejudice to the above, Ld. CIT(A) ought to have made reasonable estimate of the profits out of business receipts, which were credited in assessee's bank accounts. 6. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.” 3. Brief facts of the case are that the assessee failed to file his income tax return for the AY 2017-18. The Assessing Officer (hereinafter referred to as Ld. 'AO') noted that during the demonetization period the assessee had deposited a significant amount of cash into his bank accounts in old currency notes. The Ld. AO issued several notices u/s 142(1) of the Act and also issued a show cause notice dated 05.12.2019, but the assessee did not comply with the notices. Consequently, the Ld. AO assessed the total income of the assessee at ₹11,86,27,937/- u/s 144 of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who upheld the order of the Ld. AO and dismissed the appeal of the assessee. 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made have been examined. The Ld. AR submitted an affidavit along with the residential certificate mentioning as under: Printed from counselvise.com Page | 3 I.T.A. No.: 893/KOL/2025 Assessment Year: 2017-18 Vikas Singhi. “Affidavit: I, Vikash Singhi, son of Rajendra Kumar Singhi, aged 48 years, by religion Hindu, resident of Sanyinagar NW, Near SNT Bus Stand, Jorethang Nagar, Panchyat Nayabazar Forest Block, Naya Bazar South Sikkim-737121 do hereby solemnly affirm and state as follows- 1. That, I am the appellant assessee, as such, I am competent to swear this affidavit. 2. That the assessee had filed an appeal for A.Y. 2017-2018 before the Hon'ble Tribunal against the appellate order passed by the Ld. CIT(A) dated 04.03.2025 relating to assessment order passed under section 144 of the Income Tax Act, 1961 dated 09.12.2019. 3. That the said appeal was dismissed by the Ld. CIT(A) by passing an adverse order on 04.03.2025 after calling for a remand report from the Assessing Officer (A.O.) 4. That during the remand proceedings, no opportunity of hearing was provided by the A.O. As such, books of accounts could not be produced before him. 5. That I give an undertaking that proper compliance would be made in case the matter is sent back to the file of the A.O. by the Hon'ble Income Tax Appellate Tribunal by producing my books of accounts and all the relevant documents. 6. That the facts stated in para 1 to 4 are true to the best of my knowledge and belief and the averment in para 5 is an undertaking given by me.” 6. Along with the affidavit, the assessee has also filed a residential certificate dated 03/03/2020, which reads as under: “Residential Certificate: I. This is to certify: 1. That Shri LATE LUM KARAN SINGHI son of Shri LATE HIRA LAL SINGHI has been found to have been residing within the State of Sikkim on or before 26th April 1975 and has been continuously residing in the State of Sikkim since then. 2. That Shri RAJENDRA KUMAR SINGHI is the SON of Shri LATE LUM KARAN SINGHI whose details are given in paragraph 1 above and has been continuously residing in the State of Sikkim since prior to 26th April 1975 or since birth. Printed from counselvise.com Page | 4 I.T.A. No.: 893/KOL/2025 Assessment Year: 2017-18 Vikas Singhi. 3. That Smt NA is the wife of Shri NA whose details are given in paragraph 1/2 above and has been continuously residing in the State of Sikkim since her marriage, II. It is further certified that Shri RAJENDRA KUMAR SINGHI ordinarily resides in DIKCHU, GANGTOK in the EAST District of Sikkim.” 7. We have gone through the assessment order and the order of the Ld. CIT(A). The assessment order is made u/s 144 of the Act as no return of income was filed nor the required documents were filed and before the Ld. CIT(A) also, the membership certificate filed stated that the membership of the assessee was of 2020 only and the VAT registration was of 2012 and not before 1975. Hence, no decision was taken in regard to the claim of the assessee and the addition made by the Ld. AO was upheld as the assessee was not able to establish that the sums were accounted income exempt under section 10(26AAA) of the Act. Since the assessee failed to provide the required details, the appeal failed. 8. Before us, the assessee has furnished the affidavit stating that the appeal was dismissed by passing an adverse order on 04.03.2025 after calling for a remand report from the Ld. AO and during the remand proceeding, no opportunity of hearing was provided by the Ld. AO as such books of account could not be produced before him. The assessee has duly undertaken that proper compliance would be made in case the matter is sent back to the file of the Ld. AO by the Tribunal for producing the books of account and all the relevant details. 9. We have gone through the facts and circumstances of the case and the submission made. Since adequate opportunity was not availed by the assessee, both at the assessment stage as well as before the Ld. CIT(A) who has not decided the merits of the case and the assessee has Printed from counselvise.com Page | 5 I.T.A. No.: 893/KOL/2025 Assessment Year: 2017-18 Vikas Singhi. now conveyed that he has sufficient evidence for the claim of exemption, therefore, the Bench was of the view that in the interest of justice and fair play, another opportunity may be provided to the assessee to produce the required documents before the Ld. AO for examining and deciding the claim of exemption. Hence, both the order of the Ld. CIT(A) as well as the order of the Ld. AO are hereby set aside and the matter is remanded to the Ld. AO to make the assessment de novo as per law after granting an opportunity of being heard and after considering the claim of the assessee on the basis of the documents which the assessee may file for seeking claim of exemption of income as per law. 10. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 28th August, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 28.08.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 6 I.T.A. No.: 893/KOL/2025 Assessment Year: 2017-18 Vikas Singhi. Copy of the order forwarded to: 1. Vikas Singhi, C/o. Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata, West Bengal, 700069. 2. DCIT, Circle-3(2), Gangtok. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "