My client is abroad and has a reassessment for FY 2017-18 saying he sold bitcoin on an Indian exchange. If he does not engage, what happens?
This is what happens. The Delhi Bench, hearing and pronouncing on the same day with nobody appearing for the assessee, dismissed the appeal and left standing an addition of Rs 49,12,362 as unexplained short-term capital gain on bitcoin for AY 2018-19. It said only that the income had been correctly assessed under s.147 read with s.144C(13) and that, in the absence of any assistance from the assessee, the Assessing Officer's order was just and proper. Read this entry for the fact pattern and the warning, not for any proposition of law: the Tribunal decided nothing about the head of income.
Decided by the ITAT (Ms. Madhumita Roy, Judicial Member and Shri Sanjay Awasthi, Accountant Member) on 2026-02-18, reported as ITA No. 1661/Del/2025 (Income Tax Appellate Tribunal, Delhi, 'D' Bench); assessment year 2018-19; heard and pronounced 18 February 2026. It bears on section 147, section 148, section 144C(13) of the Income Tax Act 1961, in Reassessment & Reopening, Crypto & Virtual Digital Assets and Capital Gains matters.
The value of this order is that it shows the Revenue side of the pre-regime bitcoin reassessment drive and what an unattended appeal is worth. The reassessment came out of the investigation wing's work on M/s Skysharp IT Solutions Pvt. Ltd., which produced a list of non-filers who had sold bitcoin in FY 2017-18; the assessee, resident in the United States, was one, with reported sales of Rs 1,40,96,785. The department computed a short-term capital gain of Rs 49,12,362 by taking its own purchase figure of Rs 91,84,422 against its own sale figure, rejecting the assessee's figures of Rs 76,79,651 and Rs 76,93,373. The assessee's substantive defence was a real one — that the exchange's summary statement was generated after a major hacking incident at Coinsecure between 30 March and 8 April 2018, that the company itself said significant bitcoin was unaccounted for in its systems, and that an FIR had been filed with the cyber cell on 10 April 2018 alleging theft by an employee — and it was rejected by the Assessing Officer and the Dispute Resolution Panel because he could not corroborate his own figures, and then never argued before the Tribunal at all. For a practitioner, the lessons are practical: the onus of showing what was actually bought and sold sits on the taxpayer, an exchange's compromised data does not by itself discharge it, and a non-resident client who ignores the proceedings will lose without a hearing on the merits. Note that s.115BBH had no application to AY 2018-19; the addition was made under the head short-term capital gains as a matter of the assessment officer's own characterisation, which the Tribunal never examined.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee, resident in San Jose, California, filed no return for FY 2017-18. The investigation wing uploaded information from its investigation in the case of M/s Skysharp IT Solutions Pvt. Ltd. identifying a large number of non-filers who had sold bitcoin, among them the assessee, whose bitcoin sales in FY 2017-18 were shown at Rs 1,40,96,785. A notice was issued on 5 April 2022 after obtaining the approval of the Competent Authority — the order does not name the sanctioning provision — and the assessee filed a return on 10 May 2022. In response to notices issued on 5 and 23 January 2024 he said he had purchased bitcoin for Rs 76,79,651 and sold it for Rs 76,93,373 and had reported it; the department's information showed purchases of Rs 91,84,422 and sales of Rs 1,40,96,785. He replied to the show cause notice that the exchange, Coinsecure, owned by M/s Skysharp IT Solutions Pvt. Ltd., had suffered a major hacking incident between 30 March 2018 and 8 April 2018, that the summary statement was generated after that incident, that the company's own statements acknowledged that significant bitcoin was unaccounted for in its accounting and reporting systems, and that no transaction reports supported the one-line summary. The Assessing Officer held the onus was on the assessee and unmet, computed a short-term capital gain of Rs 49,12,362 and passed a draft order on 8 March 2024. The Dispute Resolution Panel-1, New Delhi, by order dated 4 December 2024, noted the assessee's documents including a copy of an FIR lodged with the cyber cell on 10 April 2018 by M/s Secure Bitcoin Traders Pvt Ltd (brand name COINSECURE) alleging theft of bitcoin by an employee, found he had not proved his contention, found no infirmity in the draft order and disposed of the objections including those against the reopening. The final order under s.147 read with s.144C(13) dated 21 January 2025 assessed income at Rs 49,12,452 and directed a penalty notice to issue along with the final assessment order; the order does not name the penalty provision. Nobody appeared for the assessee before the Tribunal.
The appeal was dismissed. Proceeding ex parte, the Tribunal held that the income had been correctly assessed by the Assessing Officer under s.147 read with s.144C(13) by the order dated 21 January 2025 and that, in the absence of any assistance rendered by the assessee, the order was just and proper and warranted no interference (para 4).
The Tribunal's own route is contained in a single paragraph. Having recorded that nobody appeared for the assessee then or previously and that no adjournment had been sought, it proceeded ex parte, considered the entire set of records including the orders passed by each authority through to the finalisation of the assessment, and held that the income had been correctly assessed and that the appeal was devoid of merit. It did not examine the head of income, the computation, the reliability of the exchange data, the effect of the hacking incident or the reopening. The substantive reasoning in the record is the Assessing Officer's and the Dispute Resolution Panel's: that the onus of proving the veracity of the transactions lay on the assessee, that his assertion that the exchange's data was compromised did not discharge it in the absence of his own supporting documents, and that the difference between the department's purchase and sale figures was a short-term capital gain which, being unexplained, was added under that head.
After a careful consideration of the issue involved in the matter, it is felt that the income has been correctly assessed by the Ld. AO under Section 147 r.w.s. 144C(13) of the Act dated 21.01.2025.
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Handle my notice → Ask a CA on WhatsAppThis is what happens. The Delhi Bench, hearing and pronouncing on the same day with nobody appearing for the assessee, dismissed the appeal and left standing an addition of Rs 49,12,362 as unexplained short-term capital gain on bitcoin for AY 2018-19. It said only that the income had been correctly assessed under s.147 read with s.144C(13) and that, in the absence of any assistance from the assessee, the Assessing Officer's order was just and proper. Read this entry for the fact pattern and the warning, not for any proposition of law: the Tribunal decided nothing about the head of income. This was decided by the ITAT (Ms. Madhumita Roy, Judicial Member and Shri Sanjay Awasthi, Accountant Member) and bears on section 147, section 148, section 144C(13) of the Income Tax Act 1961. It is reported as ITA No. 1661/Del/2025 (Income Tax Appellate Tribunal, Delhi, 'D' Bench); assessment year 2018-19; heard and pronounced 18 February 2026. The value of this order is that it shows the Revenue side of the pre-regime bitcoin reassessment drive and what an unattended appeal is worth. The reassessment came out of the investigation wing's work on M/s Skysharp IT Solutions Pvt. Ltd., which produced a list of non-filers who had sold bitcoin in FY 2017-18; the assessee, resident in the United States, was one, with reported sales of Rs 1,40,96,785. The department computed a short-term capital gain of Rs 49,12,362 by taking its own purchase figure of Rs 91,84,422 against its own sale figure, rejecting the assessee's figures of Rs 76,79,651 and Rs 76,93,373. The assessee's substantive defence was a real one — that the exchange's summary statement was generated after a major hacking incident at Coinsecure between 30 March and 8 April 2018, that the company itself said significant bitcoin was unaccounted for in its systems, and that an FIR had been filed with the cyber cell on 10 April 2018 alleging theft by an employee — and it was rejected by the Assessing Officer and the Dispute Resolution Panel because he could not corroborate his own figures, and then never argued before the Tribunal at all. For a practitioner, the lessons are practical: the onus of showing what was actually bought and sold sits on the taxpayer, an exchange's compromised data does not by itself discharge it, and a non-resident client who ignores the proceedings will lose without a hearing on the merits. Note that s.115BBH had no application to AY 2018-19; the addition was made under the head short-term capital gains as a matter of the assessment officer's own characterisation, which the Tribunal never examined. If it applies to you, the first step is this: Appear. An ex parte Tribunal order on this fact pattern will be a single paragraph and will affirm the assessment without examining the head of income or the computation.
The assessee, resident in San Jose, California, filed no return for FY 2017-18. The investigation wing uploaded information from its investigation in the case of M/s Skysharp IT Solutions Pvt. Ltd. identifying a large number of non-filers who had sold bitcoin, among them the assessee, whose bitcoin sales in FY 2017-18 were shown at Rs 1,40,96,785. A notice was issued on 5 April 2022 after obtaining the approval of the Competent Authority — the order does not name the sanctioning provision — and the assessee filed a return on 10 May 2022. In response to notices issued on 5 and 23 January 2024 he said he had purchased bitcoin for Rs 76,79,651 and sold it for Rs 76,93,373 and had reported it; the department's information showed purchases of Rs 91,84,422 and sales of Rs 1,40,96,785. He replied to the show cause notice that the exchange, Coinsecure, owned by M/s Skysharp IT Solutions Pvt. Ltd., had suffered a major hacking incident between 30 March 2018 and 8 April 2018, that the summary statement was generated after that incident, that the company's own statements acknowledged that significant bitcoin was unaccounted for in its accounting and reporting systems, and that no transaction reports supported the one-line summary. The Assessing Officer held the onus was on the assessee and unmet, computed a short-term capital gain of Rs 49,12,362 and passed a draft order on 8 March 2024. The Dispute Resolution Panel-1, New Delhi, by order dated 4 December 2024, noted the assessee's documents including a copy of an FIR lodged with the cyber cell on 10 April 2018 by M/s Secure Bitcoin Traders Pvt Ltd (brand name COINSECURE) alleging theft of bitcoin by an employee, found he had not proved his contention, found no infirmity in the draft order and disposed of the objections including those against the reopening. The final order under s.147 read with s.144C(13) dated 21 January 2025 assessed income at Rs 49,12,452 and directed a penalty notice to issue along with the final assessment order; the order does not name the penalty provision. Nobody appeared for the assessee before the Tribunal. The matter was decided on 2026-02-18 by the ITAT (Ms. Madhumita Roy, Judicial Member and Shri Sanjay Awasthi, Accountant Member). On those facts the ITAT held as follows. The appeal was dismissed. Proceeding ex parte, the Tribunal held that the income had been correctly assessed by the Assessing Officer under s.147 read with s.144C(13) by the order dated 21 January 2025 and that, in the absence of any assistance rendered by the assessee, the order was just and proper and warranted no interference (para 4).
The Tribunal's own route is contained in a single paragraph. Having recorded that nobody appeared for the assessee then or previously and that no adjournment had been sought, it proceeded ex parte, considered the entire set of records including the orders passed by each authority through to the finalisation of the assessment, and held that the income had been correctly assessed and that the appeal was devoid of merit. It did not examine the head of income, the computation, the reliability of the exchange data, the effect of the hacking incident or the reopening. The substantive reasoning in the record is the Assessing Officer's and the Dispute Resolution Panel's: that the onus of proving the veracity of the transactions lay on the assessee, that his assertion that the exchange's data was compromised did not discharge it in the absence of his own supporting documents, and that the difference between the department's purchase and sale figures was a short-term capital gain which, being unexplained, was added under that head. In the words reproduced by the source cited on this page: "After a careful consideration of the issue involved in the matter, it is felt that the income has been correctly assessed by the Ld. AO under Section 147 r.w.s. 144C(13) of the Act dated 21.01.2025."
It was decided by the ITAT on 2026-02-18 and is reported as ITA No. 1661/Del/2025 (Income Tax Appellate Tribunal, Delhi, 'D' Bench); assessment year 2018-19; heard and pronounced 18 February 2026. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 147, section 148, section 144C(13), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The appeal was dismissed. Proceeding ex parte, the Tribunal held that the income had been correctly assessed by the Assessing Officer under s.147 read with s.144C(13) by the order dated 21 January 2025 and that, in the absence of any assistance rendered by the assessee, the order was just and proper and warranted no interference (para 4). It arises in Reassessment & Reopening, Crypto & Virtual Digital Assets and Capital Gains matters, on section 147, section 148, section 144C(13) of the Income Tax Act 1961, and was decided by Ms. Madhumita Roy, Judicial Member and Shri Sanjay Awasthi, Accountant Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the department's figures come from an exchange, obtain and compare the assessee's own records early — the difference between his figures and the department's was the whole of the addition here. If the exchange data is unreliable because of a hack, insolvency or seizure, build the point with documents: the company's own statements, the FIR, correspondence and, critically, a reconstruction of the assessee's actual trades; a general assertion that the data cannot be trusted was held not to discharge the onus. For a non-resident, check the s.144C route: the draft order, the objections to the Dispute Resolution Panel and the final order under s.144C(13) each carry their own time limits and the appeal lies from the final order. Do not concede the head of income for a pre-AY 2023-24 year merely because the assessment order calls it short-term capital gain — the Tribunal here did not decide it, so the order is no authority on the point. Check the reopening notice and its sanction independently of the merits — this order records only that the 'necessary approval of the Competent Authority' was obtained and never identifies the sanctioning authority, and the assessee never argued the point. That route succeeded on comparable facts in Nashit Suhail Ansari v ITO.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator search (doc 185685833, confirmed as 'Manvendu Bharadwaj, California, USA vs DCIT/ACIT-Int-Tax, Gurgaon on 18 February, 2026') returns nothing, and a second probe on the assessee's name returned only the order itself. The pre-s.115BBH treatment of bitcoin as a short-term capital asset adopted here has attracted no later Tribunal or High Court consideration. Nothing overruling, doubting or distinguishing it was found, and no appeal to a High Court against it is disclosed on the record searched. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
This entry must be read with its limits. The appeal was heard and pronounced on the same day, 18 February 2026, ex parte, nobody having appeared for the assessee on this or on earlier occasions and no adjournment having been sought. The Tribunal's own reasoning occupies one paragraph, para 4; the rest of the order is a reproduction of the assessment order, including the Assessing Officer's narration and the Dispute Resolution Panel's directions. The order is therefore NOT authority on whether pre-regime bitcoin gains are capital gains, business income or income from other sources: the head was chosen by the Assessing Officer and never examined. Two internal discrepancies: the PAN of M/s Skysharp IT Solutions Pvt. Ltd. is printed as AAUCS7695A in the Assessing Officer's narration and as AAUCS9695A in the extract of the DRP's order; and the reproduced assessment order jumps from its para 10 to para 12 and then to para 14, so parts of the assessment order were not before me. The exchange is referred to both as Coinsecure and as M/s Secure Bitcoin Traders Pvt Ltd having the brand name COINSECURE, and the investigation is said to have been carried out in the case of M/s Skysharp IT Solutions Pvt. Ltd., which the assessee describes as the owner of Coinsecure. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was dismissed. Proceeding ex parte, the Tribunal held that the income had been correctly assessed by the Assessing Officer under s.147 read with s.144C(13) by the order dated 21 January 2025 and that, in the absence of any assistance rendered by the assessee, the order was just and proper and warranted no interference (para 4).
TaxSphere, “Manvendu Bharadwaj v DCIT (International Taxation)”, https://taxnotice.vittsphere.com/caselaw/case/manvendu-bharadwaj-v-dcit-pre-regime-bitcoin-short-term-capital-gain/ (validity last checked 2026-09-08)
The judgment itself is a government work and may be quoted freely. The summary, the validity note and the reasoning on this page are this library's own writing: quote them with attribution, and please do not present either as the words of the court — this page keeps the two apart and so should a quotation of it.
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