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Judgment
PER MADHUMITA ROY, J. M.:
The instant appeal filed by the Revenue is directed against the order dated 17.10.2025 passed by the Ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the Assessment Order dated 25.03.2022 passed by the National Faceless Assessment Centre, Delhi under Section 147 r.w.s. 144B of the Act for Assessment Year 2016-17.
The grounds of appeal are as under: -
“1.Whether on facts and circumstances of the case, the Ld. CIT(A) has erred in holding the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961 as invalid and unsustainable.
2.Whether on the facts of the case and in law, the Ld. CIT(A) has failed to appreciate that the assessing officer had valid reason to believe, based on tangible material, that income chargeable to tax had escaped assessment and that the reopening was in accordance with law after due approval under section 151 of the Income Tax Act.
3.Whether on the facts of the case and in law, the Ld. CIT(A) has erred in holding that the reassessment was based on a mere change of opinion and in quashing the assessment without adjudicating the additions made under section 69A read with section 115BBE of the Act.
4.The appellant craves to be allowed to add any fresh ground(s) of appeal deleted or amend any of the ground(s) of appeal.”
The brief facts leading to the case is this that, the assessee has filed its return for A.Y 2016-17 on 23.09.2016 declaring income at Rs. 26,34,110/- which was completed upon making Addition of Rs. 511,55,584/- which represents the claim of interest by the Assessee pertaining to earlier years and was treated by the assessee has deferred revenue expenses. The case of the Assessee was reopenedunder Section 147 of the Act upon issuing notice under Section 148 of the Act dated 30.03.2021 whereupon return was filed on 27.05.2021 declaring returned income at Rs. 26,34,110/-. Upon complying the statutory formalities, the assessment was finalized upon making addition of Rs. 5,27,43,000/- under Section 69A r.w. Section 115BBE and further Rs. 26,74,90,000/-under Section 69A r.w. 115BBE of the Act which was deleted by the Ld. CIT(A). Hence, the instant appeal before us.
The assessee has raised the ground of appeal to this effect that the approval issued under Section 151 of the Act dated 30.03.2021 is unsigned, neither manually nor digitally and, therefore, the entire proceeding is vitiated and thus, liable to be quashed. Though no specific ground to this effect has been taken but the Ld. Counsel argued as above on the basis of Ground No. 2 as raised by the assessee before us. In this respect, the Ld. AR has drawn our attention to Page 292 of the paper book being the approval under Section 151 of the Act whereas the documents is of total 3 pages and infact the last page of the document particularly page 302, it is found to have been digitally signed and, therefore, we decline to accept such argument made by the Ld. AR and the same is thus, rejected.
It is the case of the assessee that complete scrutiny was done upon issuing notice under Section 143(2) dated 08.07.2017 details whereof are appearing from Page No. 1 to 4 of the Paper Book filed before us. On the other hand, it is the case of the revenue that the assessee had a high value transaction including cash deposit in the IndusInd Bank to the tune of Rs. 23,06,26,196/-. In-fact the following cash wasdeposited in different banks:
| Name of the bank | Amount of cash deposited during the year 2015-16 relevant to AYs 2016-17 |
| State Bank of India | 1,56,00,000 |
| Vijaya Bank | 2,00,36,000 |
| IndusInd Bank | 1,71,07,000 |
| Total | 5,27,43,000 |
The above amount of cash deposits seemsremainedunexplained and the concerned authority being the Ld. AO has duly examined the information available with the Income Tax Departmentand upon considering the same arrived at an opinion that the assessee used his bank account for providing entries to others. The huge amounts shown in bank account does not commensurate with the income shown in ITR and with the prima facie belief coupled with the charge of escapement of assessment by the assessee and failure on the part of the assessee in disclosing fully and truly all material facts necessary for its assessment particularly in view of the Explanation B of Section 147 of the Act upon approval of the competent authority, the case of the assessee was reopened. In-fact, the assessee was provided with the draft assessment order in the form of show cause notice dated 25.02.2022 to prove the sources of credit in IndusInd bank amounting to Rs. 23,06,26,196/- and reply whereupon duly filed which was not found to be acceptable the addition was made in the hands of the assessee by the Ld. AO with the following observation: -
“ 4.1 As per details furnished by the assessee on 15-03-2022, the details of cash deposits made by the assessee in various bank accounts during the year are as under :
Name of the bank Amount of cash deposited during the year 2015-2016 relevant to A Yr 2016-2017 State Bank of India 1,56,00,000 Vijaya Bank 2,00,36,000 IndusInd Bank 1,71,07,000 Total 5,27,43,000 Vide query dated 16-03-2022 the assessee was asked to furnish the sources of the cash deposits made with supporting evidences as under :
In continuation of Assessment proceedings in your case for the A.Yr. 2016-2017 and after examination of your submission it is found that, a sum of Rs. 1,71,07,000/- is received in cash on various dates, which are just below Rs. 5 Lakhs in each instance and the same is stated to be out of income from operation in respect of cash deposits in Indusind Bank. Similarly you have claimed to have received cash receipts of Rs1,56,00,000/- in SBI and Rs.2,00,36,000/- in Vijaya Bank. However no details as to the nature of operations and reason for receipts in cash is furnished. Hence it is requested to furnish the nature of business operation and reason for receipts in cash may please be provided along with complete documentary evidences, ledger extracts , and other related documents to evidence that these receipts in cash are out of operational income. In event of non furnishing of above details, assessment is proposed to be finalized treating the cash deposits as out of undisclosed sources whose nature and sources remained to be explained.
The assessee vide submissions furnished on 21-03-2022 has furnished ledger extract of cash sales and copies of invoices wherein the cash receipts are mentioned. Perusal of these invoice copies reveal that in none of the cases the name of the person to whom services are provided are mentioned. Only Cash is mentioned in name of buyer. Further the narration is “Income from Operations”. The receipts are claimed to be on account of margin received on supply of bio gas and bio gas equipment.
In absence of details as to from whom the money is received in any of the vouchers furnished, it is clear that assessee’s claim of receipts of cash out of “Income from operations” is unverifiable. In other words the assessee has not furnished any evidence to prove the nature and sources of money received in cash amounting to Rs.5,27,43,000/ during the Financial Year 2015-2016 relevant to the Assessment Year 2016- 2017.
As per provisions of Section 69A of the Income Tax Act,1961,
Unexplained money, etc.
69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.
Since the explanation offered by the assessee is not satisfactory about the nature and sources of cash deposits made in bank account amounting to Rs.5,27,43,000/- during the Financial Year 2015-2016 relevant to the A Yr 2016-2017, this sum of Rs. 5,27,43,000/- is deemed to be the income of the assessee for the Financial Year 2015-2016 relevant to the A Yr 2016-2017 and accordingly taxed as per provisions of Section 69A rws 115BBE of the Income Tax Act,1961.
Penalty Proceedings are initiated under Section 271(1)(c) of the Act as assessee has concealed the particulars of income of Rs.5,27,43,000/-.
4.2.In respect of other receipts reflected in IndusInd Bank during the year, the assessee has furnished his explanation on 15/03/2022 (at the fag end wherein the assessments are required to be completed by 31/03/2022) and the details are as under:
The above submissions of the assessee are examined vis-à-vis the Audit Report furnished by the assessee and following glaring deviations re noticed, which are detailed as under:-
Beyond above findings, in respect of advances received or advances received back, the assessee ought to have explained the reasons for receipt of advance or return of advance correlating the same with the purpose for which the sums are borrowed and the purpose of utilisation.
Additionally from the balance sheet it is found that as on 31-03-2016, the long term borrowings stood at Rs.5,79,15,293/- only.
Thus there is total lack on part of the assessee to discharge burden of proof and hence the explanation offered by the assessee about nature and sources of receipt of sum of Rs.26,74,90,000 is incomplete and unsatisfactory.
As per provisions of Section 69A of the Income Tax Act, 1961,
Unexplained money, etc.
69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, on the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.
Since the explanation offered by the assessee is not satisfactory about the nature and sources of sums received in bank account amounting to Rs.26,74,90,000/- during the Financial Year 2015-2016 relevant to the A Yr 2016-2017, this sum of Rs.26,74,90,000/- is deemed to be the income of the assessee for the Financial Year 2015-2016 relevant to the A Yr 2016-2017 and accordingly taxed as per provisions of Section 69A rws 115BBE of the Income Tax Act, 1961.
Penalty Proceedings are initiated under Section 271(1)(c) of the Act as assessee has concealed the particulars of income of Rs.26,74,90,000/-.
If he The onus of proving the correctness of the income is on the assessee. disputes the liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Revenue is entitled to treat it as taxable income. Merely making the claim without furnishing supporting evidences does not absolve theassessee of the responsibility in discharging the onus with regard to the determination of income. The burden of proof squarely lies on the assessee. In view of the non compliance detailed above and in view of the various judicial pronouncements regarding the discharge of onus with respect to the burden of proof, I am constrained to hold that the assessee has not discharged its burden of proof.”
.………………………………
“7.In submissions dated 21-03-2022, the assessee has quoted the following decisions which are analysed,
The assessee has quoted the decision as under
in the case of CIT v. Vishal Exports Overseas Limited (Gujarat High Court) Tax Appeal No. 2471 of 2009 5. Revenue carried the matter in appeal before the Tribunal. The Tribunal did not address the question of correctness of the C.I.T. (Appeals)'s conclusion that amount of Rs.70 lakhs represented the genuine export sale of the assessee. The Tribunal however, upheld the deletion of Rs.70 lakhs under section 68 of the Act observing that when the assessee had already offered sales realisation and such income is accepted by the Assessing Officer to be the income of the assessee, addition of the same amount once Jagain under section 68 of the Act would tantamount to double taxation of the same incone.7. In view of the above situation, we do not find any reason to interfere with the Tribunal's order.
In the present case, the explanation of the assessee regarding the scurces and nature of cash receipts is without any evidence. In respect of advances, the assessee failed to adduce the claim of evidences. Hence case law quoted by the assessee is out of context.
The assessee has also quoted the decisions in the cases of CIT v. Smt. Harshil Chordia v. ITO (Rajasthan High Court) 2008 298 ITR 349 Raj, AGONS GLOBAL. P LTD v/s ACIT (Delhi ITAT) Appeal No 3741 to 3746/Del/201.
However in the instant case of present assessee, there is neither satisfactory explanation of the assessee about the nature and sources of cash deposits nor evidenced the claim of advances, hence the case laws quoted are different and distinct.
8.Accordingly the assessment under Section 143(3) rws 147 rws 144B of the Income Tax Act, 1961 is finalised as under:
Income assessed as per last assessment order Rs.5,37,89,694
Add: Taxation of sum under Section 69A rws 115BBE as Rs.5,27,43,000 discussed in Para-4.1
Add: Taxation of sum under Section 69A rws 115BBE as Rs.26,74,90,000 discussed in Para-4.2
Assessed Income Rs.37.40.22.694
Tax payable As per computation sheet enclosed
Issue Demand Notice and Challan.
Charge Income Tax, Cess, interest under section 234A/B as applicable.
Issue Penalty Notice under Section 271(1)(c) for concealing particulars of income.”
The Ld. CIT(A) granted relief on the appeal filed by the assessee with the following observation:-
“7.In submissions dated 21-03-2022, the assessee has quoted the following decisions which are analysed.
The assessee has quoted the decision as under :
In the case of CIT v. Vishal Exports Overseas Limited (Gujarat High Court) Tax Appeal No. 2471 of 2009 5. Revenue carried the matter in appeal before the Tribunal. The Tribunal did not address the question of correctness of the C.I.T. (Appeals)’s conclusion that amount of Rs.70 lakhs represented the genuine export sale of the assessee. The Tribunal however, upheld the deletion of Rs.70 lakhs under section 68 of the Act observing that when the assessee had already offered sales realisation and such income is accepted by the Assessing Officer to be the income of the assessee, addition of the same amount once again under section 68 of the Act would tantamount to double taxation of the same income.
7.In view of the above situation, we do not find any reason to interfere with the Tribunal’s order.
In the present case, the explanation of the assessee regarding the sources and nature of cash receipts is without any evidence. In respect of advances, the assessee failed to adduce the claim of evidences. Hence case law quoted by the assessee is out of context.
The assessee has also quoted the decisions in the cases of CIT v. Smt. Harshil Chordia v. ITO (Rajasthan High Court) 2008 298 ITR 349 Raj, AGONS GLOBAL LTD v/s ACIT (Delhi ITAT) Appeal No 3741 to 3746/Del/201 .
However in the instant case of present assessee, there is neither satisfactory explanation of the assessee about the nature and sources of cash deposits nor evidenced the claim of advances . hence the case laws quoted are different and distinct.
8.Accordingly the assessment under Section 143(3) rws 147 rws 144B of the Income Tax Act,1961 is finalised as under :
Income assessed as per last assessment order Rs.5,37,89,694
Add: Taxation of sum under Section 69A rws 115BBE as discussed in Para- 4.1Rs.5,27,43,000
Add: Taxation of sum under Section 69A rws 115BBE as discussed in as Rs.26,74,90,000 Para-4.2
AssessedIncome Rs.37,40,22,694
Tax payable As per computation sheet enclosed
Issue Demand Notice and Challan.
Charge Income Tax, Cess, interest under section 234A/B as applicable.
Issue Penalty Notice under Section 271(1)(c) for concealing particulars of income.”
Heard the parties, perused the material available on records. It appears that though the bank statement was furnished by the assessee to the concerned authority particularly the A.O. and the CIT(A), the source of cash receipts in-spite of several opportunities having been given to the assessee, the assessee has not been able to justify the same by adducing evidences and considering the judgment passed by the Hon’ble Gujrat High Court in the case of CIT -vs- Vishal Exports Overseas Limited and the judgment passed by the Hon’ble Rajasthan High Court in the case of CIT -vs- Harshil Chordia -vs-ITO reported in (2008) 298 ITR 349 Raj as relied upon by the assessee since not found to be applicable in the instant case of the assessee particularly having regard to the cash receipts not been explained sufficiently by the Assessee, the Ld. A.O. made the addition distinguishing those judgments on facts and on law as well with the following observations:
“7.In submissions dated 21-03-2022, the assessee has quoted the following decisions which are analysed.
The assessee has quoted the decision as under :
in the case of CIT v. Vishal Exports Overseas Limited (Gujarat High Court) Tax Appeal No. 2471 of 2009 5. Revenue carried the matter in appeal before the Tribunal. The Tribunal did not address the question of correctness of the C.I.T. (Appeals)’s conclusion that amount of Rs.70 lakhs represented the genuine export sale of the assessee. The Tribunal however, upheld the deletion of Rs.70 lakhs under section 68 of the Act observing that when the assessee had already offered sales realisation and such income is accepted by the Assessing Officer to be the income of the assessee, addition of the same amount once again under section 68 of the Act would tantamount to double taxation of the same income. In view of the above situation, we do not find any reason to interfere with the Tribunal’s order.
In the present case, the explanation of the assessee regarding the sources and nature of cash receipts is without any evidence. In respect of advances, the assessee failed to adduce the claim of evidences. Hence case law quoted by the assessee is out of context.
The assessee has also quoted the decisions in the cases of CIT v. Smt. Harshil Chordia v. ITO (Rajasthan High Court) 2008 298 ITR 349 Raj, AGONS GLOBAL P LTD v/s ACIT (Delhi ITAT) Appeal No 3741 to 3746/Del/201 .
However in the instant case of present assessee, there is neither satisfactory explanation of the assessee about the nature and sources of cash deposits nor evidenced the claim of advances . hence the case laws quoted are different and distinct.
8.Accordingly the assessment under Section 143(3) rws 147 rws 144B of the Income Tax Act,1961 is finalized as under :
Income assessed as per last assessment order Rs.5,37,89,694
Add: Taxation of sum under Section 69A rws 115BBE as Rs.5,27,43,000 discussed in Para-4.1
Add: Taxation of sum under Section 69A rws 115BBE as Rs.26,74,90,000 discussed in Para-4.2
Assessed Income Rs.37,40,22,694
Tax payable As per computation sheet enclosed
Issue Demand Notice and Challan.
Charge Income Tax, Cess, interest under section 234A/B as applicable.
Issue Penalty Notice under Section 271(1)(c) for concealing particulars of income.”
Surprisingly, the Ld. CIT(A) without conducting any enquiry deleted such addition that too in the absence of any evidence to prove the cash receipts as genuine which in our considered opinion is perverse and, therefore, quashed. The addition made by the Ld. AO is, thus, upheld.
In the result, appeal filed by the Revenue is allowed.