Harpreet Singh Vs ITO (ITAT Amritsar)
Submissions on Record, Yet “Nothing Filed”: ITAT Rejects Mechanical Addition
Evidence Cannot Be Acknowledged and Then Ignored
The Amritsar Tribunal has set aside an appellate order confirming an addition of ₹26.96 lakh under Section 69A, after finding that the departmental authorities had failed to properly consider the assessee’s submissions and documentary evidence.
The first appellate authority’s order contained a striking contradiction. It expressly acknowledged that the assessee had filed submissions and evidence on 9 April 2026 and 13 April 2026, yet proceeded to confirm the addition on the allegation that no submissions or evidence had been furnished.
The Tribunal held that the addition had been made mechanically, without proper application of mind. It restored the matter to the Assessing Officer for fresh adjudication after a reasonable opportunity of hearing.
Cash Deposits Triggered Reassessment
The assessee, a resident individual, had not filed his return of income under Section 139(1) for AY 2020-21.
Information available in the Department’s system indicated cash deposits in a bank account standing in his name. The Assessing Officer considered that the assessee had taxable receipts but had failed to file a return, and consequently reopened the assessment alleging escapement of income.
During the proceedings, the Assessing Officer examined entries appearing in Form 26AS and other material available on record. He noticed cash deposits aggregating to ₹29,96,850 and called upon the assessee to explain their source.
The assessee furnished a reply and certain documentary evidence. However, the Assessing Officer was not satisfied and ultimately treated ₹26,95,975 as unexplained money under Section 69A, adding that amount to the assessee’s income.
Documents Filed, Personal Hearing Requested
The Tribunal examined paragraph 3.2 of the assessment order and found that the assessee had responded to the Assessing Officer’s query and submitted documentary evidence.
The assessee had also requested a personal hearing through video conferencing. That hearing was not granted.
The Tribunal further observed that the Assessing Officer had made the addition without discussing in detail the nature and acceptability of the submissions and documents furnished by the assessee.
Thus, the difficulty was not merely that the explanation had been rejected. The order did not adequately explain the evaluation of the material on which the assessee relied. The requested hearing had also not been provided.
The Appellate Order Contradicted Itself
The assessee challenged the addition before the first appellate authority. That authority disposed of the appeal ex parte and confirmed the addition, alleging that no submissions or evidence had been furnished in support of the grounds.
However, its own order recorded otherwise.
The Tribunal noted that both the body of the appellate order and paragraph 5.1 expressly referred to submissions filed on 9 April 2026 and 13 April 2026, accompanied by documentary evidence.
Despite acknowledging these filings, the appellate authority proceeded on the contrary premise that nothing had been submitted. The Tribunal described this action as more surprising and found no discussion evaluating the relevant submissions and evidence.
An acknowledgement of documents in one part of an order cannot be reconciled with their complete absence being asserted elsewhere without explanation.
Tribunal Proceeded Despite the Assessee’s Absence
No one appeared for the assessee before the Tribunal, although an adjournment request dated 28 September 2026 had been submitted.
Having regard to the grounds and nature of the dispute, the Tribunal considered that keeping the appeal pending would serve no useful purpose. It therefore proceeded ex parte qua the assessee, after hearing the Departmental Representative and examining the record.
Nevertheless, the assessee’s absence did not prevent the Tribunal from identifying the defects apparent from the assessment and appellate orders themselves. The existing record established that submissions and evidence had been furnished.
Fresh Assessment and Consequence for the Demand
The Tribunal concluded that the departmental authorities had mechanically made the addition under Section 69A, without properly applying their minds to the assessee’s submissions and evidence.
It set aside the first appellate authority’s order and restored the issues to the Assessing Officer for de novo adjudication, with a direction to provide a due and reasonable opportunity of being heard.
The Tribunal expressly stated that, following this disposal, there would be no surviving demand against the assessee. Consequently, the connected stay application became infructuous and was dismissed.
The appeal was allowed for statistical purposes. The source of the deposits remains subject to fresh examination; the Tribunal did not finally accept the assessee’s explanation on merits.
Author’s Comments
Faceless proceedings require careful examination of the electronic record. When submissions have been uploaded, the decision must address their substance and explain why they are accepted or rejected.
This order illustrates the importance of checking whether the reasons recorded in an appellate order agree with its own narration of facts. Here, the acknowledgement of two submissions directly contradicted the stated basis for confirming the addition.
The relief is a fresh opportunity to establish the source of the deposits, together with the demand consequence expressly recorded by the Tribunal. The assessee must now substantiate the explanation during the renewed proceedings.
A submission may be rejected after examination. It cannot fairly be treated as nonexistent when the order itself acknowledges its receipt.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
Present appeal arises out of order dated 15.04.2026 of National Faceless Appeal Centre [NFAC], Delhi, for the assessment year 2020-21.
2. Of course, the stay application filed by the assessee, being SA No. 10/Asr/2026, seeking stay on recovery of demand, is also tagged along with the appeal.
3. When the matter was called out, none appeared on behalf of the assessee. Though the assessee has made a request for adjournment by letter dated 28.09.2026, however, no one was present on behalf of the assessee. Looking at the grounds raised and the nature of dispute, we are of the view that no useful purpose would be served keeping the appeal pending any further. Hence, we proceed to dispose of the appeal ex-parte qua the assessee, after considering the submissions of learned D.R. and based on materials available on record.
4. The dispute in the present appeal is confined to an addition of Rs.26,95,975/-. The assessee has also raised a ground alleging violation of principles of natural justice.
5. Be that as it may, briefly stated, the facts are, the assessee is a resident individual. For the assessment year under dispute, the assessee did not file any return of income under Section 139(1) of the Act. Information available in the system of the Department indicated that in the year under consideration, the assessee had made cash deposits in a bank account standing in his name. Being of the view that despite having taxable receipts, assessee did not file any return of income, the Assessing Officer reopened the assessment alleging escapement of income. In course of hearing, based on the entries appearing in Form-26AS and others materials available on record, the Assessing Officer noticed that in the year under consideration, the assessee had made various cash deposits in the bank account aggregating to Rs.29,96,850/-. He, therefore, called upon the assessee to explain the source of such cash deposits. Though, the assessee furnished certain documentary evidence explaining the source of cash deposits, however, the Assessing Officer was not convinced. Ultimately, he proceeded to treat cash deposits aggregating to Rs.26,95,975/- as unexplained money under Section 69A of the Act and added the same to the income of the assessee.
6. The assessee contested the aforesaid addition by filing an appeal before the First Appellate Authority. However, alleging that the assessee did not furnish any submission or evidence in support of grounds raised, the First Appellate Authority disposed of the appeal ex-parte and confirmed the addition made by the Assessing Officer.
7. We have heard learned Departmental Representative (DR) and perused the materials on record. Undoubtedly, the First Appellate Authority has disposed of assessee’s appeal ex-parte and confirmed the addition alleging that the assessee did not make any submission or furnish any evidence while contesting the addition made by the Assessing Officer. However, as could be seen from the observations of the Assessing Officer in paragraph 3.2 of the assessment order, the assessee not only furnished a reply to the query raised by the Assessing Officer, but also submitted certain documentary evidence. Further, the assessee requested an opportunity of personal hearing through video conferencing. However, not only was the assessee was not granted any personal hearing through video conferencing, but the Assessing Officer made addition under Section 69A of the Act without discussing in detail the nature and acceptability of the submissions made and documentary evidence furnished by the assessee. More surprising is the action of the First Appellate Authority. Though, in the body of the order as also in the observations made in paragraph 5.1 of the appellate order, the First Appellate Authority has clearly stated that the assessee had furnished submissions on 09.04.2026 and 13.04.2026 along with documentary evidences, contradicting his own observation, the First Appellate Authority alleged that no submission or evidence was filed on the grounds raised.
8. On a careful reading of the appellate order, we do not find any discussion therein on the nature of submissions and evidences called for by the first appellate authority. Thus, in our considered opinion, the Departmental Authorities, without properly applying their mind to the submissions made and evidence furnished by the assessee, have mechanically made the addition under Section 69A of the Act.
9. In view of aforesaid, we are inclined to set aside the impugned order of the First Appellate Authority and restore the issues arising in the appeal to the Assessing Officer for de novo adjudication, after providing due and reasonable opportunity of being heard to the assessee. Since the impugned order of First Appellate Authority has been set aside with direction to the Assessing Officer to adjudicate the issue de novo, there will be no surviving demand against the assessee. Therefore, the connected stay application has become infructuous.
10. In the result, appeal is allowed for statistical purposes and the stay application is dismissed.
(Order pronounced in the open court on 30/09/2026)
