Bangalore ITAT Quashes ₹2.61 Crore Addition; No Addition Possible Without Even Identifying the Bank Account

Imran Pasha Vs ITO (ITAT Bangalore)

Bangalore ITAT Quashes ₹2.61 Crore Addition; No Addition Possible Without Even Identifying the Bank Account

The Bangalore ITAT deleted an addition of ₹2.61 crore made under Sections 147/144, holding that the Revenue cannot sustain an addition for alleged cash deposits when it is unable to even establish which bank account contained the deposits or furnish the underlying information on which the reassessment was initiated. The Tribunal observed that the entire addition rested on vague information unsupported by any tangible material.

The assessee, a small businessman engaged in car washing and sale of car accessories, was alleged to have deposited ₹1.51 crore in bank accounts and ₹1.09 crore with banking companies, resulting in a total addition of ₹2.61 crore. Since the assessee allegedly failed to respond to notices, the assessment was completed ex parte. The CIT(A) also dismissed the appeal for non-compliance.

Before the Tribunal, the assessee contended that notices had been issued to incorrect email addresses, resulting in complete lack of knowledge of both the assessment and appellate proceedings. The ITAT accepted the explanation, noting that even the appellate order had been sent to a wrong email address and therefore the delay in filing the appeal deserved to be condoned.

More importantly, when the Tribunal called upon the Assessing Officer to produce details of the alleged deposits, the Department itself reported that no information regarding the bank accounts, deposits or banking transactions was available on record. The Assessing Officer admitted that even after issuing notices under Section 133(6), no such details were available in the assessment records.

The Tribunal held that in the absence of any evidence showing which bank account received the deposits, which bank was involved, or what transactions were actually undertaken, the reassessment itself lacked foundation. It further criticized both the Assessing Officer and the CIT(A) for proceeding mechanically without verifying the basic facts. Consequently, the entire addition of ₹2.61 crore was directed to be deleted.

FULL TEXT OF THE ORDER OF ITAT BANGALORE

1. ITA No. 1793/Bangalore/2025 for assessment year 2013 – 14 is filed by Mr. Imran Pasha (the assessee/appellant) against the appellate order passed by the National faceless appeal Centre Delhi dated 20 September 2024 wherein the reassessment order passed under section 147 read with section 144 of the income tax act, 1961 (the act) dated 29th of March 2022 passed by National faceless assessment Centre, Delhi (the learned assessing officer) determining the total income of the assessee at ₹ 26,123,000 was dismissed.

2. The learned CIT – A dismissed the appeal of the assessee as sufficient and adequate opportunities were given to the assessee but no reply was submitted and therefore due to non-compliance, which was also the case before the assessing officer, he presumed that the assessee is not interested in pursuing this appeal and therefore the order of the learned assessing officer was confirmed and appeal of the assessee was dismissed.

3. This appeal is filed before us on 13 August 2025 which was stated to be delayed by 256 days for the reason that the appellate order was passed on 20 September 2024 which was stated to be received by the assessee on 15 July 2025. Thus, as per form No. 36 filed before us there is no delay in filing the appeal however the registry is presumed that the date of order is 20 September 2024 and therefore the appeal filed on 13 August 2025 is a lead appeal.

4. The assessee filed an affidavit explaining the above in case of defect notice issued by the registry stated that assessee is an illiterate and uneducated person engaged in the activity of car washing, cleaning and selling of small car and decorative items like seat covers, floor mats et cetera. He engaged the services of a tax consultant for the purpose of filing the income tax returns and furnished such return’s stating to be an email address noted by the authorized representative. No doubt such email ID contained the name of the assessee however it is the affidavit statement of the assessee that he is not aware about any such email and therefore no notices were served on him. Even otherwise he stated that the notice under section 148 dated 30 March 2021, notice under section 142 (1 and show cause notice dated 22 February 2021 were also sent to that wrong address despite the email ID stated of the assessee.

5. He has categorically submitted that assessee has submitted the email ID of imran@gmail.comwhereas the notices were issued to the assessee on psha.Imran@gmail.com. Thus, nothing is served on the assessee during the course of assessment proceedings.

6. The assessee further stated that in form No. 35 the assessee has submitted an email ID gst2uu@gmail.combut once again the notices were issued to the unknown email addresses and therefore the assessee was not aware about such order. Subsequently for filing of the return of income for assessment year 2025 – 26 the assessee came to know about the outstanding demand and therefore immediately he filed the appeal and therefore the appeal deserves to be admitted.

7. The learned authorized representative reiterated the above submission. The learned departmental representative submitted that delay is not because of the sufficient cause and therefore appeal should not be admitted.

8. We have carefully considered the rival contention and find that the assessee could have filed the appeal only when he came to know about the existence of an order. The appellate orders were also sent on a wrong email address;therefore, it cannot be said that the assessee came to know about this appellate order earlier. He came to know about this order only when we look that the ID be a portal for the purpose of filing of the appeal of the assessee for assessment year 2025 – 26. Naturally the assessee presumes that the limitation will run only from the date of receipt of the order which is mentioned in form No. 36 as 15th of July 2025. If that date is taken to be the date of receipt of the order of the first appellate authority by the assessee, admittedly there is no delay in filing the appeal. Even otherwise we find that when the appellate order was issued to the assessee on a wrong email address, the assessee did not come to know about the existence of such appellate order and when he came to know about this, he immediately responded to by filing the appeal, therefore the delay in filing of the appeal is for sufficient cause and hence same is admitted.

9. Briefly stated the facts of the case show that assessee is a non-filer, the information was received that assessee has deposited cash of ₹ 15,149,000 in savings bank account with various banks and a sum of ₹ 10,974,000 which banking companies. Therefore, the case of the assessee was reopened by issuance of notice under section 148 of the act on 30 March 2021. Thus, the reason to believe stated that income to the extent of ₹ 26,123,000 chargeable to tax has escaped assessment in this case. The assessee did not file any return of income in response to notice under section 148 of the act. Further notices under section 142 (1) were issued to the assessee which were also not responded to and therefore the learned assessing officer made an addition of unexplained cash deposit of ₹ 26,123,000 in the hence of the assessee determining the total income at the same amount by passing a reassessment order under section 147 read with section 144 read with section 144B of the act on 29th of March 2022.

10. When assessee preferred an appeal before the learned CIT – A, the notices were issued to the assessee on wrong email address. The learned CIT – A noted that five notices were issued by the CIT – A which were not responded to and therefore he adjudicated that assessee is not interested in pursuing this appeal and hence he dismissed the appeal of the assessee confirming the order of the learned AO.

11. We have heard the rival contentions, the report of the assessing officer was called for because there was no reference of where the amount is deposited by the assessee in which bank et cetera. The learned assessing officer, through senior DR provided air information along with the evidence available with the assessing officer based on which the assessment was reopened for assessment year 2013 – 14. The AO was directed to provide information along with evidence to show in which bank account the assessee has deposited the above sum along with the banking companies where the assessee has transacted. The learned authorized representative also challenged that assessee does not have any such bank account, he has not deposited any sum as stated in the bank account he is merely engaged into the business of a car wash and a small car accessory dealer. The learned assessing officer that is income tax officer Ward – 5 (2) (1) Bangalore responded to by an email dated 31st of March 2026 also addressed to assessee and other persons wherein it stated as under: –

” with regard to the trailing mail it is hereby informed that the order under section 147 read with section 144 and 144B of the act was passed in this case by the faceless assessing officer and further it is verified from the assessment module, it is seen that no information with respect to the bank details/deposit details are found. Further, during the course of the assessment proceedings neither the bank nor the assessee has furnished the bank deposit details. However, the faceless assessing officer has issued notices under section 133 (6) to the bank calling for information. Copy of the notice under section 133 (6) is enclosed herewith for the usual. Apart from there is no other information available in the module/in the records.”

12. On the basis of the above information, it is apparently clear that the learned assessing officer did not have any information with respect to which bank account the assessee has deposited the above sum or with which banking financial companies the assessee has dealt with. There is no information available as stated by the learned assessing officer therefore the reopening of the assessment itself is bad and not sustainable.

13. Even otherwise, no information is available before the learned assessing officer at the time of issuance of the notice, during the course of assessment proceedings as well as during the course of appellate proceedings and also before us. In absence of such information, it cannot be said that the assessee being a small car wash would have transacted to such an extent of ₹ 261 lakhs in various bank accounts. There is no detail of which bank the letter under section 133 (6) were issued. The learned assessing officer also did not pursue is no information was available. As the information was not coming forth from the assessee as well as from the various banks, the learned assessing officer did not do anything but simply made an addition.

14. Further the learned CIT – A also did not carried to see that to which addresses; he is communicating to for the purpose of extracting details from the assessee. Even otherwise he did not discuss the merit but stated that the assessee did not want to pursue the appeal. That is not within the powers of the learned CIT – In fact, looking at the facts itself, he should have asked the learned assessing officer to show him the details in which bank account the assessee has deposited into with which banking company in which the assessee has dealt with whether such a huge sum is found to be allegedly deposited by this small person.

15. In view of the above facts, the addition made by the learned assessing officer is not sustainable, and therefore the learned assessing officer is directed to delete the same. The orders of the learned that lower authorities are reversed, the grounds of appeal raised by the assessee with respect to the above addition is allowed.

16. In the result appeal filed by the assessee is allowed.

Order pronounced in the open court on 15^thJune, 2026.