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Judgment
PER VIKAS AWASTHY, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 17.02.2026, for Assessment Year 2017-18.
Shri Naman Gupta, appearing on behalf of the assessee submits that the assessee is providing professional consultancy and tuitions. The assessment for AY 2017-18 was reopened and notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued merely for the reason that the assessee had deposited cash Rs.10,00,00/- to open a Fixed Deposit account with District Faridabad Primary Co-op Agri and Rural Bank Ltd. The assessee explained that the assessee is taking tuition classes at home and is also earning professional income from consultancy in business development. The assessee had filed original return of income on 23.03.2018 declaring total income of Rs.11,05,300/-. Along with return of income, the assessee had furnished cash flow statement which clearly shows consultancy income of Rs.6,49,500/- and income from coaching/tuition Rs.1,60,000/-. Both these incomes were accepted by the Assessing Officer (AO) in the assessment proceedings. Apart from above, the assessee had disclosed cash withdrawal from the bank Rs.2,24,000/-. The above source of funds were utilized by the assessee for depositing cash in Co-op Bank to open Fixed Deposit account. The ld. AR submits that since, the assessee was able to substantiate source of funds for deposit of cash to open Fixed Deposit account, the addition made by AO be deleted.
The ld. AR of assessee further submits that the assessment is bad in law as the approval u/s.151 of the Act was granted by the Joint Commissioner of Income Tax (JCIT) in a mechanical manner. Therefore, the assessment order is liable to be quashed.
Per contra, Shri Manoj Kumar, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR reiterated findings of the AO and the CIT(A).
Both sides heard, orders of the lower authorities examined. The limited issue for consideration before the Bench is the addition of Rs.10,00,000/- u/s.69A of the Act made by AO disbelieving the source of cash deposits in the Co-op Bank declared by the assessee. The assessee has explained that the source of cash deposits in Co-op Bank for opening fixed deposit account was income from tuitions/coaching, business consultancy services and earlier withdrawals from the Bank. The assessee in order to substantiate source of income referred to the Bank statement at page 25 & 26 of the paper book and ledger account of consultancy income at pages 31 & 32 of paper book. The assessee has also filed confirmations from the firms i.e. M/s. Narang Collections, M/s. Awesome, M/s. Bhayana Automotive and M/s. Kashtwari Sons, to whom assessee has been providing consultancy. Considering entire facts of the case, I am satisfied that the assessee has been able to substantiate source of cash deposits in the Co-op Bank. Hence, addition of Rs.10,00,000/- made by the AO u/s.69A of the Act is directed to be deleted.
In the result, impugned order is set aside and appeal of the assessee is allowed.