VITHOBA DADA SHIRSATH,NASHIK V. ITO WARD2(1) NASHIK, NASHIK

ITA 2352/PUN/2025

AI Insights

The case involves Vithoba Dada Shirsath, an agriculturist, who appealed against the order of the CIT(A)/NFAC which upheld an addition of Rs. 31,15,000 as unexplained money under section 69A of the Income Tax Act, 1961. The addition was based on cash deposits in the appellant's bank account, which the Assessing Officer (AO) deemed unexplained due to non-compliance with notices. The CIT(A) dismissed the appeal for non-prosecution. The Tribunal found that the CIT(A) did not adequately consider the appellant's submissions and failed to adhere to procedural requirements, leading to the decision to remand the case for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790562 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 12-10-2025
• Other Referred Cases: CIT Vs. B.N. Bhattarcharjee and Another, M/s. Chemipol Vs. Union of India
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARISH BIST
• Assessee Lawyers: RAKESH PARDESHI
• Keywords: Set aside; Opportunity of being heard; Peak credit; Principle of natural justice
• Section: 147; 148; 144; 142(1)

Judgement Text

" आयकर अपीलीय अधिकरण “एक सदस्य मामला” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, PUNE BEFORE MS. ASTHA CHANDRA, JUDICIAL MEMBER AND SHRI DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2352/PUN/2025 निर्धारण वर्ा / Assessment Year : 2019-20 Vithoba Dada Shirsath, At Post Deopur, NIPHAD, Nashik-422308 PAN : CYPPS3574L Vs. ITO, Ward – 2(1), Nashik अपीलधर्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Rakesh Pardeshi Department by : Shri Harish Bist Date of hearing : 01-12-2025 Date of Pronouncement : 02-12-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 13.08.2025 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY) 2019-20. 2. The assessee has raised the following grounds of appeal :- “1. The learned CIT A erred in upholding the addition of rupees 3115000 made by the Assessing Officer u/s 69A of the Income-tax Act, 1961, without properly appreciating the facts and evidences explaining the source of cash deposits. 2. The learned authorities failed to appreciate that the cash deposits in the appellant’s bank account represented receipts from agricultural activities carried out by the appellant on ancestral agricultural land and loan availed from Bank of baroda for construction of farm house., and therefore, the same were not liable to be treated as unexplained money. 3. On the facts and in the circumstances of the case and in law lower authorities have erred in making an addition of Rs. 31,15,000/- u/s 69A – Unexplained Money, being summations of certain cash deposits/credit entries in bank account by rejecting the appellant’s Printed from counselvise.com 2 ITA No.2352/PUN/2025, AY 2019-20 submission and further erred in not appreciating that there were cash withdrawals from the bank account and alternatively appellant was entitled to get credit of such withdrawals by applying the theory of peak credit. 4. The addition made by the Assessing Officer and sustained by the CIT(A) is arbitrary, unjustified, and contrary to the facts and circumstances of the case. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.” 3. It is a case of an ex-parte assessment under section 147 read with section 144 of the Income Tax Act, 1961 (the “Act”). Briefly stated, the facts of the case are that the assessee is an individual engaged in agriculture activities on his ancestral land situated at Niphad, District Nashik. For AY 2019-20, the assessee did not file his return of income. The case of the assessee was reopened by the Ld. Assessing Officer (“AO”) under section 147 of the Act based on the information available with the Department that the assessee has deposited cash of Rs. 31,15,000/- in his bank account with Bank of Baroda during the relevant AY under consideration. Accordingly, statutory notice(s) under section 148 and 142(1) of the Act as well as show cause notice(s) were issued and duly served upon the assessee from time to time requesting the assessee to submit the details regarding the said cash deposits. However, the assessee failed to comply with any of these notices. Due to lack of any reply/ documentary evidence regarding source of cash deposits, the Ld. AO made an addition of Rs.31,15,000/- as unexplained money under section 69A read with section 115BBE of the Act, to the total income of the assessee vide his order dated 09.02.2024 passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act. 4. The assessee carried the matter in appeal before the Ld. CIT(A)/ NFAC challenging the above addition made by the Ld. AO. Before the Ld. CIT(A)/NFAC, there was non-compliance of notice(s) of hearing. The Ld. CIT(A)/NFAC dismissed the appeal of the assessee for non-prosecution and endorsed the findings of the Ld. AO. Printed from counselvise.com 3 ITA No.2352/PUN/2025, AY 2019-20 5. Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto. 6. The Ld. AR submitted that there was no intentional non-compliance of the notice(s) of hearing issued by the Ld. CIT(A)/NFAC. The Ld. AR submitted that the assessee is an agriculturist and his only source of income is from agricultural income except some miscellaneous interest income earned from his savings bank account and therefore was not required to file return of income. Admittedly, there was non-compliance to the various notices issued by the Ld. AO, however, it was due to the reason that there was a dispute going on amongst the family members of the assessee regarding the ancestral land/ family property and the assessee was pre occupied in dealing with this issue. He submitted that the assessee is an illiterate farmer and does not understand the procedural nuances of the tax laws and its compliance. The assessee was not filing any return of income in preceding years and never received any notice from the Department earlier which led to the non-compliance before the lower authorities. He further submitted that the assessee has filed his submissions explaining the source of cash deposits before the Ld. CIT(A)/ NFAC but he has not considered the submissions and dismissed the appeal in limine for non-prosecution. He submitted that given an opportunity the assessee is in a position to explain and furnish all the requisite supporting documents/evidence to substantiate his case before the Ld. CIT(A)/NFAC. The Ld. AR, therefore, urged that the matter may be sent back to the file of Ld. CIT(A)/NFAC for adjudication afresh on merits, after affording an opportunity of hearing to the assessee. 7. The Ld. DR had no objection to the above proposition of the Ld. AR. 8. We have heard the Ld. Representative of the parties and perused the material available on record. We observe that both the Ld. AO as well as the Ld. CIT(A)/ NFAC have passed their respective orders ex-parte qua the assessee as the notices issued by them remained un-complied with owing to the reasons stated in the preceding paragraphs. We find that the Ld. CIT(A)/NFAC vide his impugned order dismissed the appeal of the assessee Printed from counselvise.com 4 ITA No.2352/PUN/2025, AY 2019-20 in limine for non-prosecution of the appeal. On merits, the Ld. CIT(A)/NFAC has confirmed the addition made by the Ld. AO for want of supporting material/ submissions on the part of the assessee. It is the contention of the Ld. Counsel for the assessee that the assessee had filed his submission before the Ld. CIT(A)/NFCA providing explanation regarding the source of cash deposits, however, it is not taken into consideration by the Ld. CIT(A)/NFAC. Before us, the Ld. AR has pleaded that given an opportunity the assessee is in a position to explain and substantiate his case by filing all the requisite details/ documentary evidence in support of his claim and has therefore prayed for remanding the matter back to the file of the Ld. CIT(A)/NFAC to decide the issues afresh on merits. 9. Perusal of the impugned appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Hon’ble Supreme Court in CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) and the decision of the Hon’ble Bombay High Court in the case of M/s. Chemipol Vs. Union of India in Excise Appeal No. 62 of 2009 and also several other decisions of High Courts/ Tribunals and dismissed the appeal of the assessee for non- prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex- parte where the assessee does not prosecute his appeal in spite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereof and the reasons for the decision. We observe that the Ld. CIT(A)/NFAC has passed the impugned order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act. 10. On the above facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file for denovo adjudication and pass speaking order on merits as per fact and law after allowing reasonable opportunity of being heard to the parties. Needless to say, the assessee shall provide the requisite support in terms of submitting Printed from counselvise.com 5 ITA No.2352/PUN/2025, AY 2019-20 the relevant documents/evidence as may be required/called upon on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order in accordance with law. The assessee is also hereby directed to provide his active and latest email id to the Department for receiving notice(s) of hearing and remain vigilant in accessing and responding to such notices. We direct and order accordingly. 11. In the result, the appeal of assessee is treated as allowed for statistical purpose. Order pronounced in the open court on 02nd December, 2025. Sd/- Sd/- (Dr. Dipak P. Ripote) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ददन ांक / Dated : 02nd December, 2025. रदि आदेश की प्रनिनलनप अग्रेनर्ि / Copy of the Order forwarded to : 1. अपील थी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The Pr. CIT concerned. 4. धिभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, “एक सदस्य मामला” बेंच, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपत प्रदत// True Copy// आदेश नुस र / BY ORDER, सहायक पंजीकार/ Assistant Registrar आयकर अपीलीय अदधकरण ,पुणे / ITAT, Pune Printed from counselvise.com "