Vipin Tiwari Vs PCIT (Allahabad High Court)
Assessment for AY 2022-23 cannot sustain an addition under section 69A based on cash deposits and transfers relating to the subsequent FY 2022-23; failure of the revisional authority to properly consider this root issue vitiated both orders.
The Assessing Officer made an addition of Rs. 1,63,23,000 under section 69A for AY 2022-23 by relying upon bank transactions, including transfers made during 04.05.2022 to 21.05.2022, i.e. after the close of FY 2021-22 relevant to AY 2022-23. The assessee specifically raised this year-mismatch in revision under section 264, but the revisional authority did not deal with the objection in its proper perspective.
The Allahabad High Court set aside the assessment order passed under section 144 read with section 144B for AY 2022-23 and the revisional order passed under section 264. The Court found that although the assessment related to FY 2021-22, for the period 01.04.2021 to 31.03.2022, cash and transfer entries relating to the subsequent period had been considered while making an addition of Rs. 1,63,23,000 under section 69A. The assessee had specifically challenged the consideration of these subsequent-year transactions in the revision petition. The Court held that this issue went to the root of the matter and had not been appropriately considered by the revisional authority. Both orders were therefore set aside and the matter was remitted to the Assessing Authority for fresh determination.
Core issue
Whether an assessment for AY 2022-23, corresponding to FY 2021-22, can take into consideration cash deposits and bank transfer entries pertaining to the subsequent FY 2022-23, and whether failure of the revisional authority to properly consider the assessee’s specific objection regarding such year-mismatch vitiates the assessment and revisional orders.
Fact.
The petitioner, an individual and stamp vendor holding a valid licence, was subjected to ex-parte assessment for AY 2022-23, corresponding to FY 2021-22 from 01.04.2021 to 31.03.2022. The assessment was completed under section 144 read with section 144B on 23.01.2024. The AO made an addition of Rs. 1,63,23,000 under section 69A as unexplained cash deposits, referring, inter alia, to transfers of the said amount during 04.05.2022 to 21.05.2022 to Ritu Tiwari. The petitioner contended that these transactions occurred after 31.03.2022 and therefore related to FY 2022-23/AY 2023-24 and could not form the basis of assessment for AY 2022-23. The petitioner challenged the assessment under section 264, but the revision was rejected on 18.02.2026.
AO / CIT finding.
The AO treated Rs. 1,63,23,000 as unexplained money under section 69A, stating that the corresponding cash deposits had not been explained and that the amount had subsequently been transferred to Ritu Tiwari. The assessee had not furnished an explanation during the assessment proceedings. In revision, the assessee specifically pointed out that the relevant credits and transfers related to FY 2022-23 rather than FY 2021-22. The revisional record itself contained a report stating that the credits pertained to FY 2022-23. However, the revisional authority did not appropriately deal with the assessee’s specific objection regarding the subsequent-year transactions.
Outcome.
The order dated 18.02.2026 passed under section 264 and the assessment order dated 23.01.2024 passed under section 144 read with section 144B for AY 2022-23 were set aside. The matter was remitted to the Assessing Authority to pass a fresh order within two months. The Court clarified that its observations should not be treated as an expression of opinion on the merits and that the fresh assessment must be made strictly in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Shri Ashish Bansal, learned counsel for the petitioner as well as Ms. Pooja Talwar who appears for the respondents.
2. Since counter and rejoinder affidavits have been exchanged between the parties and the rival parties do not propose to file any further affidavit, the petition is being decided at the admission stage.
3. The case of the petitioner is that he is individual by status and is a stamp vendor having a valid license no. 14/2011-12 dated 23.12.2011 issued by the Additional District Magistrate (Finance / Revenue) Mathura. According to the petitioner, ex-parte proceedings came to be instituted against the applicant referable to the Assessment Year 2022-23 being Financial Year 2021-22 for the period from 01.04.2021 to 31.03.2022. An ex-parte assessment order came to be passed under Section 144 of the Income Tax Act on 23.01.2024.
4. Questioning the said order, the petitioner herein preferred a revision under Section 264 of the Income Tax Act on 29.04.2024 against the order dated 23.01.2024, which came to be rejected on 18.02.2026 by the Principal Commissioner of Income Tax, Agra – I.
5. Questioning both the orders, the present petition came to be filed.
6. A counter affidavit came to be filed by the respondents on 06.08.2026 sworn by Income Tax Officer, Ward – 1(3)(1), Mathura to which a rejoinder affidavit is available on record.
7. Learned counsel for the petitioner has sought to argue that the orders impugned dated 18.02.2026 passed by the revisional authority as well as the order dated 23.01.2024 passed by the Assessing Authority / Assessment Unit, Income Tax Department, Government of India, Ministry of Finance, Delhi (Faceless Assessing Officer) cannot be sustained even for a single moment. Elaborating the said submission, it is contended that the ex-parte assessment order came to be passed relatable to the Assessment Year 2022- 23 being the Financial Year 2021-22 for the period from 01.04.2021 – 31.03.2022. However, as per the own saying of the respondents, the income for the period from 04.05.2022 to 31.05.2022 claiming it to be of Ritu Tiwari who was shown to be the wife of the writ petitioner / assessee came to be included and computed while making it one of the considerations for assessing the writ petitioner along with cash deposit also. Further submission is that the Assessment Year 2022-23 being Financial Year 2021-22 relatable to the period from 01.04.2021 – 31.03.2022 could not in any manner whatsoever take into account the cash deposits / any transaction which was for the subsequent assessment or financial year. Even otherwise, according to the learned counsel for the writ petitioner, even if for name sake, just for the sake of argument, the same could have been done then too a separate notice ought to have been issued to the writ petitioner / assessee so as to put forward his stand, though legally it was not permissible at all. It is also contended that the order by the Assessing Authority on 23.01.2024 as well as the order passed by the revisional authority on 18.02.2026 have completely ignored the said legal aspect of the matter and further the order passed dated 23.01.2024 of the Assessing Authority is in violation of principles of natural justice being ex-parte in that regard, thus, it is prayed on behalf of the writ petitioner / assessee that the orders impugned be set aside and the matter be remitted back to the Assessing Authority to pass a fresh order.
8. Countering the submissions so made by the learned counsel for the writ petitioner/ assessee, Ms. Pooja Talwar who appears for the respondents has submitted that deliberately the writ petitioner/ assessee had not joined the proceeding but he was sitting outside the fence and waited for passing of the order and thereafter preferred revision under Section 264 of the Act which has been rejected while giving reasons in coming to the conclusion. Attention has been drawn towards paragraph Nos. 8, 9, 10, 11, 13 and 15 & 17 of the counter affidavit. It is contended on behalf of the revenue that in absence of any material or inputs provided by the assessee/ writ petitioner, the Assessing Officer had no option but to collect information and inputs and thereafter proceed with the order and the writ petitioner/ assessee cannot in any manner whatsoever complain about the order, particularly, when the same stands substantiated from the records.
9. I have heard the learned counsel for the parties and perused the record.
10. Facts are not in issue. It is not in dispute that assessment proceedings
| 1. | PAN | APRPT9062R |
|---|---|---|
| 2. | Name of the assessee | VIPIN TIWARI |
| 3. | Address of the assessee | H No. 49 Civil Line 10-Civil Line Head Post Office, Mathura H.O Mathura, MATHURA 281001, Uttar Pradesh, India |
| 4. | Assessment Year | 2022-23 |
| 5. | Status | INDIVIDUAL |
| 6. | Residential Status | Resident |
| 7. | Date of filing of Return of Income | 01/07/2022 |
| 8. | Acknowledgement Number of Return of Income | 731283860010722 |
| 9. | Date of processing u/s 143(1)(a) of the Income-tax Act. | 01/07/2022 |
| 10. | Income Computed under section 143(1) of the Act | |
| 11. | Date of service of Notice under section 143(2) of the Income-tax Act | 02/06/2023,02/06/2023 |
| 12. | Date(s) of issue of Notice(s) under under section section 142(1) of the Income-tax Act TAX |
10/08/2023,13/09/2023 |
| 13. | Order passed under section | 144 read with section 144B of the Income-tax Act |
| 14. | Returned Income | Rs. 4,18,150 |
| 15. | Date of Order | 23/01/2024 |
| 16. | DIN | ITBA/AST/S/144/2023-24/1059998564(1) |
11. Para 5.0 (vii) reads as under:
“(vii) Further, as stated above in para 5.0 (iii) above, out of total credits of Rs.24,91,67,760/-, total amount of Rs. 1,63,23,000/- has been transferred during the period from 04.05.2022 to 21.05.2022 to a person named Ritu Tiwari (who appears to be wife of assessee), it appears that the corresponding amount of cash deposited in the account has not been received from customers for purchase of stamp papers/affidavits and the source of the amount of cash deposited in the account of assessee as well as purpose of transfer of funds to Ritu Tiwari and utilization of the same funds, has also not been explained by the assessee. Accordingly, cash deposits of Rs.1,63,23,000/- remained unexplained in the hand of assessee and is treated as his income as per provisions of section 69A of the Act. Accordingly, the assessee is hereby show caused as to why the aforesaid cash deposits of Rs. 1,63,23,000/- may not be treated as unexplained money/deemed income as per provisions of section 69A of the Act, for charging of tax thereon as per provisions of section 115BBE of the Act.”
12. Para 4.0 (v) reads as under:
“(v) Unexplained cash deposits, Rs. 1,63,23,000/-: Further as discussed at para 5(vi) above, out of total credits of Rs.24,91,67,760/-, total amount of Rs. 1,63,23,000/- were transferred during the period from 04.05.2022 to 21.05.2022 to a person named Ritu Tiwari (who appears to be wife of assessee). Apparently, the corresponding amount of cash deposited in the account of the assessee has not been received from customers for purchase of stamp papers/affidavits and the source of the amount of cash deposited in the account of assessee as well as purpose of transfer of funds to Ritu Tiwari and utilization of the same funds, has also not been explained by the assessee. The assessee was show caused to explain as to why the aforesaid cash deposits of Rs. 1,63,23,000/- may not be treated as his unexplained money/deemed income as per provisions of section 69A of the Act, for variation/addition of the same to his total income for assessment year here under consideration. However the assessee failed to file any reply/explanation on the proposed variation. Accordingly, it is held that the assessee has no explanation/reply to offer on this issue. Hence, variation/addition of Rs. 1,63,23,000/- is made to the total income of the assessee on account of unexplained cash deposited/money/deemed income u/s 69A of the Act, for charging tax thereon as per provisions of section 115BBE of the Act. Penalty proceedings u/s 271AAC(1) of the Act, are also initiated separately for variation/addition of aforesaid unexplained money/cash deposits/deemed income u/s 69A of the Act.”
13. In the memo of revision preferred by the writ petitioner/ assessee against the order dated 20.01.2024 under Section 264 of the I.T. Act reveals that in para 5, the following was averred:
“5. It is submitted that the assessment order dated 23.04.2024 passed by the ‘AO’ under section 144 read with section 144B of the ‘Act’ is wholly erroneous and prejudicial to the interest of the applicant as it has been passed with complete non application of mind. While doing so, the ‘AO’ has gross erred in not appreciating that he was making assessment in the case of applicant for assessment year 2022-23 for which previous year ended on 31.03.2022 and the transactions entered into the period 1.04.2021 to 31.03.2022 only were relevant for the said assessment period. The total credits of Rs. 24,91,67,760 in the bank account no. 08211100000309 with Punjab and Sind Bank, Mathura Cantt related to the financial year 2022-23 relevant to assessment year 2023-24 and the debits of Ritu Tiwari during the period 4.05.2022 to 21.05.2022 also pertained to assessment year 2023-24 and the said erroneous exercise done by the ‘AO’ has made entire assessment unsustainable both in facts as well as in law.”
14. Further in the revisional order dated 18.02.2026 passed by the respondent No. 1, para 5.1.3 reads as under:
“5.1.3 As per the JAO Report: In his report dated 24.06.2024 the JAO submitted that the amount of credits pertains to F.Y. 2022-23 instead of F.Y. 2021-22, therefore, the assessment made by FAO is not valid. In subsequent report dated 11.02.2026, the JAO submitted details of entries in bank account for the F.Y. 2021-22.”
15. Further para 5.2.1 reads as under:
“5.2.1 As per Assessment Order: Vide para 4(v) under the heading “Inference and conclusion drawn” of the assessment order dated 23.01.2024 the AO has made addition of Rs. 1,63,23,000/- as unexplained cash deposit u/s 69A of the Act stating that as discussed in assessment order, out of total credits of Rs. 24,91,67,760/-, total amount of Rs. 1,63,23,000/- were transferred during the period from 04.05.2022 to 21.05.2022 to a person named Ritu Tiwari (who appears to be wife of assessee). Apparently, the corresponding amount of cash deposited in the account of the assessee has not been received from customers for purchase of stamp papers/affidavits and the source of the amount of cash deposited in the account of assessee as well as purpose of transfer of funds to Ritu Tiwari and utilization of the same funds, has also not been explained by the assessee. The assessee was show caused to explain as to why the aforesaid cash deposits of Rs. 1,63,23,000/- may not be treated as his unexplained money/deemed income as per provisions of section 69A of the Act for assessment year under consideration. However the assessee failed to file any reply/explanation on the proposed variation. Accordingly, it is held that the assessee has no explanation/reply to offer on this issue. Hence, variation/addition of Rs. 1,63,23,000/- is made to the total income of the assessee on account of unexplained cash deposited/money/deemed income u/s 69A of the Act, for charging tax thereon as per provisions of section 115BBE of the Act.”
16. A conjoint reading of the aforesaid extracts would go to show that the assessment came to be conducted relatable to the assessment year 2022-23 being Financial Year 2021-22 for the period from 01.04.2021 to 31.03.2022, however, cash entries as well as transfer entries for the period subsequent to the assessment / financial year came to be included. Though according to the writ petitioner/ assessee, Ritu Tiwari happened to be his sister-in-law but she was described as wife. The question with regard to considering the said entries was raised in the memo of the revision which in the opinion of the Court has not been appropriately dealt with as the said issues goes to the root of the matter and non-consideration in proper perspective vitiates the orders.
17. Besides the same, the core issue which arises is whether the writ petitioner/ assessee was put to notice and he had knowledge about the assessment order or not. According to the parties, they are taking divergent stands but according to Ms. Pooja Talwar, the writ petitioner/ assessee be given an opportunity but a time frame be fixed in that regard.
18. Bearing in mind the aforesaid factual situation as well as the stand taken by the respective parties and the arguments so advanced, the Court without further dwelling into the matter is deciding the writ petition in following terms:
A. The order dated 18.02.2026 passed under Section 264 of the Act by Principal Commissioner of Income Tax, Agra-1 and the assessment order dated 23.01.2024 passed under Section 144 read with Section 144B of the Act for the Assessment Year 2022-23 passed by the respondent No. 2, Assessment Unit, Income Tax Department, Government of India, Ministry of Finance, Delhi (Faceless Assessing Officer) (through Jurisdictional Assessing Officer), Income Tax Officer, Ward – 1(3)(1) Mathura, Radhika Vihar Phase – II, Mathura – 281004 are set aside. B. The matter stands remitted back to the assessing authority to pass a fresh order within a period of two months.
19. Needless to point out that the order passed today may not be construed to be an expression on the merits of the matter as the assessing authority shall pass an order strictly in accordance with law without being influenced and obsessed by any of the observations made hereinabove.
20. With the aforesaid observation, the writ petition is disposed off. September 29, 2026
