The Income Tax Appellate Tribunal improperly applied a higher burden of proof under Section 68 than the law requires, affecting the validity of its reversal of the lower authority's findings.

JUDGMENT

(Per: HONOURABLE MR. JUSTICE BIBEK CHAUDHURI)

Date: 18-12-2025

1. This Miscellaneous Appeal No. 206 of 2023 is directed against the order, dated 03.11.2022, passed by the Income Tax Appellate Tribunal, Patna Bench, Patna in I.T.A. No. 250(Pat)/2019 for the Assessment Year 2015-16, whereby the Tribunal allowed the appeal preferred by the Revenue and reversed the appellate order, dated 20.09.2019, passed by the Commissioner of Income Tax (Appeals), Patna under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act” for brevity).

2. The appellant, M/s Rajnandani Projects Private Limited, a company incorporated under the Companies Act, 1956 and an assessee to income tax vide PAN AAECQ0092C, filed its return declaring total income of Rs. 1,96,95,520/- for the Assessment Year 2015-16 on 28.03.2016. During the course of assessment, the Assessing Officer issued notices under Section 142 (1) along with a questionnaire, and thereafter issued notices under Section 133 (6) and summons under Section 131 of the Act, calling for confirmation and verification regarding the amount of Rs. 1,91,00,000/-, received by the appellant during the relevant financial year from M/s Champion Group of Companies, whose proprietor is stated to be Amit Kumar Singh, bearing PAN AZPPS7985Q. The Assessing Officer treated the aforesaid amount as unexplained cash credit under Section 68 of the Act and completed the assessment by order dated 31.12.2017 under Section 143 (3).

3. The appellant preferred an appeal before the Commissioner of Income Tax (Appeals), who, upon consideration of the submissions made, the documents produced, and the remand report submitted by the Assessing Officer on 13.09.2019, deleted the addition of Rs. 1,91,00,000/- by order, dated 20.09.2019.

4. Aggrieved by the said order, the Revenue filed an appeal before the Income Tax Appellate Tribunal. The Tribunal, upon examination of the material on record, held that though the identity of the creditor stood established, the appellant failed to prove the genuineness of the transaction and the creditworthiness of the creditor. The Tribunal, accordingly, set aside the order passed by the Commissioner of Income Tax (Appeals) and restored the addition made by the Assessing Officer.

5. Challenging the order passed by the Tribunal, the appellant has preferred the present Miscellaneous Appeal under Section 260A of the Act.

6. The appellant is a private limited company, engaged in the business of civil construction. For the Assessment Year 2015-16, the appellant filed its return of income on 28.03.2016, declaring total income of Rs. 1,96,95,520/-. The case was selected for scrutiny and notices under Section 142 (1) of the Act, along with a questionnaire were issued by the Assessing Officer. During the assessment proceedings, the Assessing Officer noticed that the appellant had received a sum of Rs. 1,91,00,000/- through banking channels from M/s Champion Group of Companies during the relevant previous year.

7. In order to verify the nature of the said receipts, the Assessing Officer issued notices under Section 133 (6) and summons under Section 131 of the Act. The appellant initially described the receipts as loan and thereafter submitted that the amount was received as advance against sale of sand to be supplied to M/s Champion Group of Companies, whose proprietor is Amit Kumar Singh, bearing PAN No. AZPPS7985Q. The appellant