TaxTMI 
TaxTMI 
2026 (7) TMI 499
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....pertaining to Section 68 of the Act, therefore, there is absolutely non-application of mind by the Revenue authorities rendering the impugned order as arbitrary bad in law, hence, liable to be quashed. 3. I find that similar view has been upheld in favour of the assessee by this Bench in the case of Vijay Kumar Jaiswal Vs. ITO-1, Ambikapur, ITA No.479/RPR/2026, dated 19.06.2026. The relevant extract of the said order are extracted as follows: "2. In this case the addition has been made by the A.O. invoking Section 69A for unexplained money in the hands of the assessee whereby addition has been made of Rs. 17,76,480/-. The Ld. CIT(A) in his findings suddenly changed the charging Section from Section 69A to Section 68 of the Act which pertains to unexplained cash credits. That though the findings emanating from the assessment order is with regard to the additions on account of cash deposits treating the same as undisclosed income, however, the CIT(A) while invoking Section 68 of the Act failed to demonstrate how it pertained to the facts of the assessee's case. Firstly, the CIT(A) while changing the section has not provided any statutory notices nor has provided any oppor....
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....the assessee. The wrong charging provision to the facts and circumstances of the case regarding the assessee is the result of non-application of mind by the Assessing Officer. That as per the Department when the source of cash deposits have remained unexplained by the assessee the correct provision for charging should have been Section 69A of the Act and not u/s. 69 of the Act. The fact of non-application of mind and mechanical exercise of power by the Revenue Authorities have been heavily condemned by the various Courts and Tribunals. The decision of the Coordinate Bench, Mumbai in the case of Shrilekha Damani Vs. DCIT, 173 TTJ 332 (Mumbai) which was approved by the Hon'ble High Court of Bombay in the decision reported in 307 CTR 218 (Bom.) wherein the question of law before the Court was whether the Tribunal was justified in holding that there was non-application of mind on the part of the Revenue authorities while granting approval and the decision of the Tribunal was upheld that the approval granted by the ACIT was without application of mind, therefore, not a valid approval in the eyes of law. In the case of ACIT, Circle-1(2) Vs. Serajuddin & Co., the Hon'ble Supreme Court vid....
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....ent against the assessee without recording valid satisfaction and reasoning regarding provisions of law, in which, he had proceeded against the assessee. 7. I find that it has been held by the Co-ordinate Bench of the Tribunal, Delhi in the case of Bhawani Castings P. Ltd. Vs. DCIT ITA No.1362/Del/2024, dated 19.11.2024 that when there is no coherence in the reasons recorded for reopening and additions made in the assessment, it is utter non application of mind by the A.O while recording reasons for reopening. 8. In the decision of the Co-ordinate Bench of Delhi in the case of Sanjeev Kumar c/o M/s Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of nonapplication of mind, it was observed and held as follows: "14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of assessee, wherein the assessee has not only included cash receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Mil....
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....an safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has 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 appellant-assessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it." 10. This Bench in the case of Prakash Chand Agrawal Vs.....
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....stablished that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding 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 section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning ....