2025 (12) TMI 144

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.... grounds of appeal on record. 2. At the outset, the Ld. Counsel for the assessee submitted that there has been non application of mind by the Pr. CIT while he has passed order u/s. 263 of the Act assuming revisionary jurisdiction regarding the case of the assessee. In this regard, it was brought to the notice of the Bench that at Para 5 of the order of the Ld. Pr. CIT, he mentioned that the FAO was required to initiate penalty u/s. 270A(2)(b) r.w.s. 270A(3)(i)(b) of the Act for under reporting of income. However, at Page 3 of the same paragraph, he mentioned that in the case of the assessee, it is clear from the return of income for A.Y.2018-19 which was scrutinized by the FAO and accordingly, clause (c) of sub-section (2) of Section 270....

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....nderstanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging secti....

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....s recorded a categorical finding that "it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant-assessee under Section 68 of the Act. In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law Accordingly, we answer the question of law, as framed above, in favour of the appellan....