Facts of the Case

The assessee, Buniya Amin, filed no return or replies during reassessment proceedings for Assessment Year 2017-18. The case was reopened under Section 147 on the basis of information regarding cash deposits of ₹32,46,300 in a bank account maintained with The Kota Central Co-operative Bank Ltd. During assessment, it was further noticed that the assessee had deposited cash of ₹33,01,300 in another account with the same bank and ₹10,83,500 in an account with State Bank of Bikaner and Jaipur, aggregating to ₹76,31,100. As the assessee did not respond to notices issued under Sections 148, 148A(d) and 142(1), the Assessing Officer treated the entire amount as unexplained money under Section 69A and completed the assessment on an ex parte basis.

The assessee preferred an appeal before the CIT(A), NFAC, after delay of 135 days, which was condoned. For the first time, the assessee claimed that one of the bank accounts with The Kota Central Co-operative Bank Ltd. bearing account number 27006111130014324, in which ₹33,01,300 was deposited, did not belong to him. The CIT(A) rejected the claim and upheld the entire addition, leading to the appeal before the Tribunal.

Issues Involved

Whether the addition of ₹76,31,100 under Section 69A was sustainable where the assessee disputed ownership of one of the bank accounts for the first time at appellate stage, whether adequate opportunity was afforded to substantiate such claim, and whether the matter required restoration for fresh adjudication.

Petitioner’s Arguments

The assessee submitted that he was an agriculturist and also ran a small kirana business and that he maintained only two bank accounts. It was contended that the bank account with The Kota Central Co-operative Bank Ltd. bearing account number 27006111130014324 did not belong to him and therefore the cash deposit of ₹33,01,300 in that account could not be added to his income. Before the Tribunal, the assessee restricted his prayer to seeking one more opportunity to establish that the disputed bank account was not his and requested restoration of the matter for that limited purpose.

Respondent’s Arguments

The Revenue opposed the request for remand and submitted that the assessee had failed to participate in assessment proceedings despite repeated notices and raised the plea regarding non-ownership of the bank account only at the appellate stage. It was argued that the account was traced on the basis of PAN linkage and the assessee failed to produce reliable evidence to disown the account even before the CIT(A). Therefore, no useful purpose would be served by granting further opportunity.

Court Order / Findings

The ITAT Jaipur observed that the assessee admittedly did not comply with assessment proceedings and raised the plea regarding non-ownership of the disputed bank account for the first time before the CIT(A). The Tribunal also noted that the assessee had not effectively discharged the onus of proving that the said bank account had no connection with him. However, considering the seriousness of the issue and the substantial addition made under Section 69A, the Tribunal held that the ends of justice would be met if the assessee was afforded one more opportunity to substantiate his claim. The Tribunal held that the CIT(A) ought to have taken steps to enable the assessee to bring relevant material on record in support of his plea before confirming the addition.

Important Clarification

The Tribunal clarified that even where an assessee has been non-compliant during assessment proceedings, principles of natural justice require that a reasonable opportunity be granted where a substantial dispute exists regarding ownership of a bank account forming the basis of addition under Section 69A. However, the burden to establish non-ownership of such account squarely lies on the assessee.

Final Outcome

The appeal filed by the assessee was disposed of for statistical purposes. The order of the CIT(A) was set aside, and the matter was restored to the file of the CIT(A) for fresh adjudication after providing another opportunity to the assessee to establish that the disputed bank account bearing number 27006111130014324 did not belong to him.

Link to Download order- https://www.mytaxexpert.co.in/uploads/1768993199_BUNIYAAMINKOTAVS.ITOWD22KOTA.pdf

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