2026 (1) TMI 944 - AT - Income Tax

Connection of disputed bank account u/s 69A: opportunity to prove non-ownership remitted for fresh evidence

Dominant issue: whether appellant should be afforded opportunity to prove non-connection with a disputed bank account for unexplained money u/s 69A. The ... Unexplained money u/s 69A - unexplained cash deposits in bank account - appellant has put forth before this Bench only one submission that the matter may be remitted so that the appellant gets an opportunity there to establish that disputed saving bank account did not belong to him - department has opposed the submission on the ground that the assessee failed to participate in the assessment proceedings despite repeated notices, and came up with the above said claim denying connection with the above said bank account, only when he challenged the assessment order by way of appeal before Learned CIT(A) HELD THAT:- It is true that the assessee did not participate in the assessment proceedings despite repeated notices. Admittedly, the assessee put forth his claim before Learned CIT(A) for the first time by way of grounds of appeal in Form No. 35. It is also true that the assessee-appellant did not take effective steps to discharge onus that the above said saving account has no connection with him. But, in the facts and circumstances, we are of the view that Learned CIT(A) should have taken steps to enable the assessee-appellant to bring on record all the relevant material in support of his plea that he had no connection with the said bank account with The Kota Central Co-operative bank Ltd. In the given situation, having regard to the seriousness of the issue involved, we deem it a fit case to afford another opportunity to the assessee-appellant to appear before Learned CIT(A) in order to establish his claim Issues: Whether the appellate order should be set aside and the matter remitted to the Appellate Commissioner for fresh adjudication after affording the assessee an opportunity to establish that disputed bank account No. 27006111130014324 did not belong to him.Analysis: Assessment was reopened under section 147 on the ground of escapement of income and additions were made under section 69A for cash deposits totaling Rs. 76,31,100/-. The assessee did not participate in assessment proceedings but raised, for the first time on appeal, a claim disowning one disputed bank account and sought exclusion of deposits credited to that account from his income. The appellate authority recorded that the claim was supported only by an unverifiable photocopy and observed that the account was traced via PAN linkage. Notwithstanding the assessee's failure to adduce evidence during assessment, the appellate records lacked steps that would have enabled the assessee to place corroborative material before the authority to substantiate the denial of connection with the disputed account. Given the seriousness of the factual contention and the absence of an opportunity to produce or verify evidence relevant to account ownership, it was appropriate to permit the assessee a further opportunity to be heard and for the appellate authority to undertake fresh consideration.Conclusion: The matter is remitted to the Appellate Commissioner for fresh decision after providing the assessee an opportunity to establish that the disputed bank account did not belong to him; this disposal is in favour of the assessee to the extent of granting a fresh hearing and remand.