[2025] 173 taxmann.com 819 (Raipur - Trib.

)[17-04-2025]

INCOME TAX : Where Assessing Officer made additions with respect to cash
deposited in assessee's bank account on ground that same was unexplained, since
during appellate proceedings assessee mentioned that source of cash deposit was
income from shares transaction and thereafter he claimed that he only had
agricultural income, since examination of facts went to root of matter, matter was to
be remanded back to Commissioner(Appeals)

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[2025] 173 taxmann.com 819 (Raipur - Trib.)

IN THE ITAT RAIPUR BENCH 'SMC'
Shrikant Sharma
v.
Income-tax Officer*
PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER
IT APPEAL NO.148 (RPR.) OF 2025
[ASSESSMENT YEAR 2013-14]
APRIL 17, 2025

Section 68 of the Income-tax Act, 1961 - Cash Credit (Bank deposits) - Assessment year
2013-14 - Assessee-farmer deposited substantial amount of cash in his bank account -
Assessing Officer made addition of same in hands of assessee on ground that assessee
could not explain source of such cash deposits - On appeal before Commissioner (Appeals),
a remand report was called for wherein assessee made submissions before Assessing
Officer that he had done transaction of shares with a SEBI registered broker - Thereafter,
assessee filed sworn affidavit claiming that he was only having agricultural income and
earlier counsel wrongly reported that assessee dealt with shares - It was noted that deposits
in assessee's account were culmination of small amounts which was regularly deposited in
bank account and aforesaid facts were essential whose examination went to root of matter -
Whether matter was to be remanded back to Commissioner (Appeals) to properly represent
facts and if required, Commissioner (Appeals) should also call for a remand report from
Assessing Officer to do ground verification once again, after being appraised of proper facts
by assessee - Held, yes [Paras 8 and 9] [Matter remanded]
FACTS

■ The assessee had made substantial amount of cash deposits in his bank account. However, he did not file
any return.
■ During proceedings, the assessee claimed that he was an agriculturist/farmer having only agricultural
income.
■ However, the Assessing Officer added same in the hands of the assessee on ground that the assessee had
neither filed return originally nor in compliance to notice under section 148. Therefore, investigation
regarding the source of such cash deposits in the bank account of the assessee was not possible.
■ On appeal, the Commissioner (Appeals) called for remand report wherein the assessee made submissions
before the Assessing Officer that the assessee had done transaction of shares with a SEBI registered
 broker and therefore, a doubt arose whether the cash deposits were from agricultural income or from
income received through transaction of shares.
■ On appeal to the Tribunal:
HELD

■ At the time of hearing, the assessee submitted that the earlier counsel who was dealing with the matter has
wrongly reported before the Assessing Officer at the time of remand proceedings by submitting that the
assessee dealt with shares through registered broker of SEBI, but the fact remains as has been disclosed in
the sworn in affidavit filed by the assessee before the bench that the assessee has never ever made any
transaction through any broker of SEBI. Rather, the assessee is only having agricultural income. These
facts were also accepted by the revenue. The revenue could not provide any evidence refuting these facts
or could not show that the assessee did transact in shares. [Para 7]
■ It is viewed that, in the interest of justice, the factual matrix needs to be revisited through proper
verification at the level of the Commissioner (Appeals)/NFAC to understand what exactly is the source of
income of the assessee. That as has been claimed in the affidavit that the assessee is only having income
from agriculture proceeds, these facts needs to be verified. Further, it was contented by the assessee that
the amount of Rs. 26.04 lakhs which was deposited in the account of the assessee was not a single
transaction. Rather, it is the culmination of small amounts which was regularly deposited in the bank
account of the assessee. These are the essential facts whose examination goes to the root of the matter.
[Para 8]
■ It is viewed that the assessee deserves one final opportunity before the Commissioner (Appeals)/NFAC to
properly represent the facts and if required, the Commissioner (Appeals)/NFAC shall also call for a
remand report from the Assessing Officer to do the ground verification once again, after being appraised
of the proper facts by the assessee. Therefore, the order of the Commissioner (Appeals)/NFAC is set aside
and the matter is remanded back to its file for de novo adjudication while complying with the principles of
natural justice. The assessee is also directed to respond to the hearing notices and represent his case on
merits. The Commissioner (Appeals)/NFAC shall dispose of the matter within 30 days from receipt of this
order. [Para 9]
CASES REFERRED TO

Vidya Shankar Jaiswal v. ITO [SLP (Civil) Nos. 26310-26311/2024, dated 31-1-2025] (para 3), Jagdish
Prasad Singhania v. Addl. CIT (TDS) [TAX Case No.17/2025, dated 24-2-2025] (para 3) and Inder Singh v.
State of Madhya Pradesh [SLP (Civil) No. 6145 of 2024, dated 21-3-2025]] (para 4).
Sunil Kumar Agrawal, CA for the Appellant. Dr. Priyanka Patel, Sr. DR for the Respondent.
ORDER

1. The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC,
Delhi dated 23.08.2024 for the assessment year 2013-14 as per the grounds of appeal on record.
2. At the very outset, the Ld. Counsel for the assessee submitted that as pointed out by the registry, ITAT, there
is delay of 145 days. The Ld. Counsel submitted that actual days of delay is 154 days. This was also conceded
by the Ld. Sr. DR. Therefore, it is apparent that the calculation of the days regarding limitation has wrongly
been informed to the assessee by the registry. However, condoning the technical defect, I proceed to consider
the merits in the condonation petition as well as affidavit filed by the assessee. Referring to the condonation
petition, the Ld. Counsel submitted that the assessee is 67 years old having heart problem. The assessee is a
farmer having no knowledge about the income tax laws. The Ld. Counsel further submitted that the said delay
was caused due to circumstances beyond the control of the assessee and it falls within the category of ordinate
delay which may therefore be pardoned and the case may be taken up for hearing on merits.
3. I have considered the condonation petition along with affidavit and it is noted that reasons of delay cannot
be attributed to any deliberate or malafide conduct on the part of the assessee, if any. The revenue has not
brought on record any evidence to show such act on the part of the assessee where it can be said that the delay
of 154 days had occurred due to some deliberate conduct of the assessee neither the revenue has brought on
record anything which suggest that the assessee purposively had tried to delay the process of litigation. In this
backdrop of the aforesaid facts, I take guidance from the judgment of the Hon'ble Supreme Court in the case
of Vidya Shankar Jaiswal v. ITO Civil Appeal Nos.../2025 [SLP (Civil) Nos. 26310-26311/2024, dated 31-1-
2025] wherein the Hon'ble Apex Court had observed that a justice oriented and liberal approach ought to be
adopted while considering the aspect of condoning the delay involved in filing of the appeal. Also, the
Hon'ble High Court of Chhattisgarh in the case of Jagdish Prasad Singhania v. Additional Commissioner of
Income Tax (TDS), Raipur (C.G.), [TAX Case No.17/2025, dated 24-2-2025], after relying on the judgment of
the Hon'ble Supreme Court in the case of Vidya Shankar Jaiswal (supra) had held that a justice oriented and
liberal approach be adopted while considering the application filed by the assessee for condonation of delay.
4. That in the recent judgment of the Hon'ble Supreme Court in the case of Inder Singh v. State of Madhya
Pradesh, Civil Appeal No........./ 2025, [SLP (Civil) No. 6145 of 2024, dated 21-3-2025], the Hon'ble Apex
Court while interpreting Section 5 of the Limitation Act, 1963 regarding the condonation of delay in respect
of case of land acquisition has observed and held on the aspect of delay that although the delay cannot be
condoned without sufficient cause, the merits of the case could not be discarded solely on the ground of delay.
A liberal approach, therefore, should be taken in condoning the delay when limitation ground undermines the
merits of the case and obstructs the substantial justice. In other words, the objective of the court should be to
deliver substantial justice coupled with liberal and judicious approach while deciding the issue of limitation
and whenever it is found that the case has merits which needs to be addressed substantially, in such case, the
delay should be condoned. Accordingly, the said delay of 154 days involved in the present appeal is
condoned.
5. That on merits the facts are that the assessee had made cash deposits in his bank account of Rs.26,03,750/-.
Since the assessee could not explain the source of such cash deposits, therefore, the A.O added the same in the
hands of the assessee which was thereafter confirmed by the Ld. CIT(Appeals)/NFAC.
6. In the course of proceedings before the revenue authorities, it has been pointed out by the assessee that he is
an agriculturist/farmer and having agricultural income and the source of the cash deposits is from such
agriculture proceeds. However, the fact remains that the assessee has neither filed return of income originally
nor filed return of income in compliance to notice u/s. 148 of the Act. Therefore, it was not possible for the
department to determine and investigate regarding the source of such cash deposits in the bank account of the
assessee. It is also the fact that during the appellate proceedings before the Ld.CIT(Appeals)/NFAC, a remand
report was called for wherein the assessee made submissions before the A.O that the assessee has done
transaction of shares with a SEBI registered broker and therefore, in the remand report the A.O has mentioned
that there arises a doubt whether the cash deposits are from agricultural income or from income received
through transaction of shares.
7. At the time of hearing, the Ld. Counsel for the assessee submitted that the earlier counsel who was dealing
with the matter has wrongly reported before the A.O at the time of remand proceedings by submitting that the
assessee dealt with shares through registered broker of SEBI, but the fact remains as has been disclosed in the
sworn in affidavit filed by the assessee before the bench that the assessee has never ever made any transaction
through any broker of SEBI. Rather, the assessee is only having agricultural income. These facts were also
accepted by the Ld. Sr. DR. The Ld. Sr. DR could not provide any evidence refuting these facts or could not
show that the assessee did transact in shares.
8. In my considered view, in the interest of justice, the factual matrix needs to be revisited through proper
verification at the level of the Ld. CIT(Appeals)/NFAC to understand what exactly is the source of income of
the assessee. That as has been claimed in the affidavit that the assesse is only having income from agriculture
proceeds, these facts needs to be verified. Further, it was contented by the Ld. Counsel that the amount of
Rs.26,03,750/- which was deposited in the account of the assessee was not a single transaction. Rather, it is
the culmination of small amounts which was regularly deposited in the bank account of the assessee. These
are the essential facts whose examination goes to the root of the matter.
9. In my considered view, the assessee deserves one final opportunity before the Ld. CIT(Appeals)/NFAC to
properly represent the facts and if required, the Ld. CIT(Appeals)/NFAC shall also call for a remand report
from the A.O to do the ground verification once again, after being appraised of the proper facts by the
assessee. Therefore, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand back the matter to its file
for denovo adjudication while complying with the principles of natural justice. The assessee is also directed to
respond to the hearing notices and represent his case on merits. The Ld. CIT(Appeals)/NFAC shall dispose of
the matter within 30 days from receipt of this order.
10. As per the above terms, the grounds of appeal raised by the assessee are allowed for statistical purposes.
11. In the result, appeal of the assessee is allowed for statistical purposes.
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*Matter remanded.