Syed Ghouse Peer Vs ITO (ITAT Bangalore)
The ITAT Bangalore set aside ex-parte assessment and appellate orders where substantial additions of ₹3.53 crore were made under section 69A on account of cash deposits and withdrawals, noting possible double addition.
The assessee, a small vegetable trader from Kolar and a non-filer, failed to respond to multiple notices during assessment and appellate stages, leading to reopening under section 147 and ex-parte addition of both cash deposits and withdrawals from bank accounts as unexplained income.
Before the Tribunal, it was contended that deposits and withdrawals were business-related (tomato trading) and taxing both results in duplication. The Tribunal found merit in this argument, observing that withdrawal of cash cannot automatically be treated as income and the approach of the AO required reconsideration.
Considering the assessee’s background, lack of awareness, and nature of business, the Tribunal granted one final opportunity and remanded the matter to the AO for fresh adjudication, directing the assessee to substantiate sources of deposits and withdrawals.
However, due to repeated non-compliance, the Tribunal imposed a cost of ₹10,000 payable to the Prime Minister National Relief Fund as a condition for relief. The appeal was thus allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal is filed by assessee for assessment year 2017 – 18 against appellate order passed by National faceless appeal Centre, Delhi (the learned CIT – A) dated 21 August 2025 wherein the assessee filed appeal on 4 April 2025 against the reassessment order dated 31 January 2025 passed under section 147 of the income tax act, 1961 (the act) by the National faceless assessment Centre, Delhi (the learned AO) was dismissed.
