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Judgment
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘CIT(A)’ in short] in Appeal No. NFAC/2017-18/10241454 dated 10.12.2025 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) arising out of the assessment order dated 29.03.2023 passed u/s 147 r.w.s 144 of the Act for Assessment Year 2018-19.
Brief facts of the case are that assesse is registered Society and Apex body of several small societies having primary activity of manufacturing of handloom products and assessee has not filed return of income though it was having huge financial transactions and cash withdrawal of Rs.1,12,60,000/- were made from the bank in the year under appeal. Accordingly, reassessment proceedings u/s 147 of the Act were initiated however, the assessee has not filed any replies, therefore, the AO had passed the reassessment order u/s 144 of the Act and made the addition of Rs. 1,12,60,000/- u/s 69C of the Act and further invoked the provisions of section 115BBE for charging special rate of tax.
Against the said order assessee filed an appeal before the ld. CIT(A) however, despite of various opportunities provided, assessee has filed to explain the utilization of cash withdrawal and no supporting evidence like cash book, bills and vouchers etc. in support of the claim that the cash was utilized for making salary and other incidental expenses were filed. Under these circumstances, ld. CIT(A) has confirmed the additions made by the AO.
Aggrieved by the order of ld. CIT(A), present appeal is filed by the assessee before the tribunal on the strength of following grounds of appeal:
“1.That in the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in confirming the order passed by the AO in sustaining the additions to the taxable income of the appellant for the subject AY at Rs.1,12,60,000.00 against a returned income of Rs.5,32,540.00 and accordingly, the impugned order passed by the Ld. CIT (A) is perverse, bad in law and void ab initio.
2.That in the circumstances of the case and in law, Ld. CIT (A) has erred in passing the impugned order without assessing the correct factual position and legal principles brought on record that there was plausible explanation given by the appellant with regard to cash withdrawal and the expenditure incurred by the assesse against the same.
2.1.That in the facts and circumstances of the case and in law, CIT (A) erred in law and on facts in disregarding the additional sum of Rs.1,12,60,000/- withdrawn by the appellant in cash and had failed to provide any explanation and expenditure receipts against the same.
2.2That the said withdrawal of cash was used against payment of salaries to the employees and staff of the appellant and thereby the books of account and details to whom it was paid is annexed with this appeal.
3.That in the facts and circumstances of the case and in law, Ld CIT (A) erred in making and sustaining an addition under section 69C of the Act without any material to show that the cash withdrawal was unaccounted income of the appellant.
4.That the impugned order is passed in disregard of the principles of natural justice and denying adequate opportunity to the appellant
5.That in facts and circumstances of the case and in law, the Ld. CIT (A) ought to have accepted the explanation in full and waived the penalty of Rs.17,88,869/-imposed by the department as the appellant had satisfactorily explained the withdrawal of the cash.
6.That in facts and circumstances of the case and in law, the initiation of penalty proceedings under section 271 AAC (1) of the Act is unjustified. illegal and bad in law, since the alleged addition made under section 69 and 115BBE of the act itself are untenable and not sustainable, therefore, no penalty under section 27 1AAC(1) can be levied.
7.The Appellant craves leave to add, alter, amend or withdraw any ground of appeal at the time of hearing.”
Heard both the parties and perused the material placed before us. The assessee has filed various documents as additional evidence with the prayer to the admit the same in the interest of justice. The assessee also filed an affidavit stating that these documents could not be filed before ethe lower authorities and are crucial to the core issue involved in the present appeal and are necessary to decide the issue in hand. These documents contained Balance Sheet, Profit and Loss account, salary register etc.
Considering the entirety of the facts and in the larger interest of justice, we admit the additional evidence filed by the assessee and remand the matter back to the file of the Assessing Officer for examination of the evidence now filed before us. The AO is further directed to verify the claim of the assessee about the utilization of cash withdrawn and decide in accordance with law. With these directions, all the grounds of appeal of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.