MOYEZ,FARUKBHAI vs. INCOME TAX OFFICER, PORBANDAR

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “A” NEW DELHI SHRI M. BALAGANESH, ACCOUNTANT MEMBER & MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER ITA No.5677/Del/2025 Assessment Year : 2020-21 Moyez, Income Tax Officer, ADATIYA, Porbandar, Porbandar. Gujarat. v/s PAN: AFTPA8077M Appellant Respondent Assessee by None Department by Shri Rajesh Tiwari, Sr. DR Date of Hearing 03.06-2026 Date of Pronouncement 10.08-2026

ORDER Per Kavitha Rajagopal, J M:

This appeal is filed by the assessee challenging the order passed by the Ld. Commissioner of Income Tax (Appeals) [‘the Ld. CIT(A)’, for short] passed under Section 250 of the Income Tax Act, 1961 ('the Act' for short) for Assessment Year (‘AY’, for short) 2020-21.

2 ITA No.5677/Del/2025 Moyez vs. ITO 3. The assessee has raised the following grounds of appeal:- “Ground No. 1: Invalid Reopening of Assessment under Section 147 1.1 The learned Commissioner of Income Tax (Appeals) erred in law and on facts in upholding the validity of the reassessment proceedings initiated under section 147 of the Income Tax Act, 1961. The reopening was based solely on third-party information allegedly obtained during a search conducted on the ALM Group, without any independent application of mind by the Assessing Officer (AO. 1.2 The reasons recorded for reopening are vague, non-specific, and fail to establish a live nexus between the alleged information and the income purported to have escaped assessment. The AO did not possess any direct evidence implicating the appellant, nor did he conduct any inquiry to verify the authenticity or relevance of the information before issuing notice under section 148. 1.3 It is a settled position of law that reopening of assessment must be based on tangible material and not on borrowed satisfaction. The Hon’ble Delhi High Court in PCIT v. Meenakshi Overseas Pvt. Ltd. [(2017) 395 ITR 677 (Del.)] held that reopening based on third-party information without independent verification is invalid. Similarly, in CIT v. Orient Craft Ltd. [(2013) 354 ITR 536 (Del.)], it was held that mere suspicion or general information cannot justify reopening. 1.4 The appellant submits that the reassessment proceedings are vitiated by lack of jurisdiction and deserve to be quashed in limine. Ground No. 2: Erroneous Addition of ₹8,00,000 under Section 69A – Alleged Undisclosed Commission Income 2.1 The learned CIT(A) erred in confirming the addition of ₹8,00,000 under section 69A of the Act, treating the same as unexplained commission income allegedly received from the ALM Group. The addition was made solely on the basis of seized documents and statements recorded during the search on third parties, without any corroborative evidence linking the appellant to the transactions. 2.2 The appellant categorically denied any business relationship with the ALM Group and submitted commission ledgers and confirmations from legitimate entities such as Mirha Exports, Gautam Vaniya Pvt. Ltd., and Rustam Foods Pvt. Ltd., which were ignored by the AO and CIT(A).

3 ITA No.5677/Del/2025 Moyez vs. ITO 2.3 The Hon’ble Supreme Court in CIT v. Smt. P.K. Noorjahan [(1999) 237 ITR 57 (SC)] held that additions under section 69A require conclusive evidence of ownership and receipt. Further, in Kishan Chand Chellaram v. CIT [(1980) 125 ITR 713 (SC)], it was held that third-party statements cannot be relied upon unless the assessee is given an opportunity to cross-examine. 2.4 The appellant was denied the opportunity to cross-examine the parties whose statements were relied upon, thereby violating the principles of natural justice. The addition is based on conjecture and surmise and deserves to be deleted. Ground No. 3: Improper Rejection of Additional Evidence under Rule 46A 3.1 The learned CIT(A) erred in rejecting the additional evidence filed under Rule 46A of the Income Tax Rules, 1962, despite the appellant having provided sufficient cause for non-submission during the assessment proceedings. 3.2 The appellant had submitted affidavits, PAN details, confirmations, and payment records of sundry creditors, which were crucial to adjudicating the matter. The rejection of such evidence has resulted in grave prejudice and denial of a fair hearing. 3.3 The Hon’ble Gujarat High Court in Textile Traders Syndicate v. CIT [(1979) 118 ITR 243 (Guj.)] held that the CIT(A) has the discretion to admit additional evidence if it is necessary for proper adjudication. Similarly, in Jansampark Advertising & Marketing Pvt. Ltd. v. DCIT [(2015) 56 taxmann.com 286 (Del.)], it was held that rejection of additional evidence without proper reasoning is unjustified. 3.4 The appellant submits that the rejection of additional evidence was mechanical and contrary to law, and prays that the same be admitted and considered on merits. Ground No. 4: Unjustified Addition of ₹15,74,739 under Section 68 – Sundry Creditors 4.1 The learned CIT(A) erred in confirming the addition of ₹15,74,739 under section 68 of the Act, treating the sundry creditors as unexplained cash credits, despite the appellant having furnished identity, PAN, and confirmations of the creditors. 4.2 The appellant had discharged the initial onus by providing documentary evidence. The AO failed to conduct any inquiry or summon the creditors to verify the genuineness of the transactions. The CIT(A) erroneously held that

4 ITA No.5677/Del/2025 Moyez vs. ITO the creditworthiness was not established, without appreciating the nature of the business and the trade practices involved. 4.3 The Hon’ble Supreme Court in CIT v. Orissa Corporation Pvt. Ltd. [(1986) 159 ITR 78 (SC)] held that once identity and genuineness are proved, the burden shifts to the department. In CIT v. Kamdhenu Steel and Alloys Ltd. [(2012) 361 ITR 220 (Del.)], it was held that additions under section 68 must be based on cogent evidence, not mere suspicion. 4.4 The appellant submits that the addition is arbitrary and deserves to be deleted in its entirety. Ground No. 5: Procedural Lapses and Denial of Natural Justice 5.1 The assessment order suffers from procedural irregularities, including failure to consider replies and documents submitted during the assessment proceedings and lack of opportunity to rebut adverse material. 5.2 The CIT(A) failed to remedy these lapses and instead relied on technical grounds to uphold the additions. The appellant was denied a fair and reasonable opportunity to present his case, which vitiates the entire proceedings. 5.3 The Hon’ble Supreme Court in Andaman Timber Industries v. CCE [(2015) 62 taxmann.com 3 (SC)] held that violation of principles of natural justice renders the proceedings null and void. In ITO v. D.G. Housing Projects Ltd. [(2012) 343 ITR 329 (Del.)], it was held that the AO must apply independent mind and provide fair opportunity. 5.4 The appellant prays that the assessment be set aside on account of procedural impropriety and denial of natural justice. Ground No. 6: Interest and Penalty Proceedings 6.1 The levy of interest under sections 234A and 234B is consequential and subject to the outcome of the appeal. The appellant reserves the right to contest the computation of interest if the additions are deleted. 6.2 The initiation of penalty proceedings under section 271AAC is premature and not appealable at this stage. However, the appellant reserves the right to challenge any penalty order if and when passed.”

5 ITA No.5677/Del/2025 Moyez vs. ITO 132 of the Act carried out on ALM Group and its associated business entities, the assessee’s case was reopened based on various incriminating documents that the assessee had received undisclosed commission income during the year which was not offered to tax by the assessee. The Ld. AO issued notice u/s 148 of the Act dated 31.03.2024 in response to which the assessee failed to file his return of income despite several opportunities. The Ld. AO proceeded to pass the assessment order u/s 147 r.w.s. 144 of the Act dated 11.02.2025 being the best judgement assessment determining the total income at Rs.31,58,909/- after making addition u/s 69A of the Act amounting to Rs.8 lakh as unexplained commission and u/s 69 of the Act amounting to Rs.5,83,527/- on account of unexplained expenditure, u/s 69 amounting to Rs.15,74,739/- as unexplained expenditure and Rs.2,00,643/- as unexplained expenditure u/s 69C of the Act.

6 ITA No.5677/Del/2025 Moyez vs. ITO Traders’ Syndicate vs. CIT (supra) stating that the Ld.CIT(A) has discretion to admit additional evidence if it is necessary for proper adjudication. On considering the same, we deem it fit to extend the assessee with one more opportunity to present his case before the Ld.CIT(A) by adhering to the principles of natural justice and in the interest of justice dispensation. The Ld.CIT(A) is directed to admit the additional evidences proposed to be filed by the assessee and adjudicate denovo on the basis of the submissions and evidences filed by the assessee and decide the issue on the merits and in accordance with the law. The assessee is also directed to strictly comply with the proceedings before the Ld.CIT(A) without any undue delay from his side. Grounds of appeal raised by the assessee on the merits are hereby allowed for statistical purpose. With regard to the legal ground raised by the assessee, it is observed that these were not raised before the Ld. CIT(A) and being an additional ground the assessee has not filed any application for admission of the same. Therefore, we do not find it necessary adjudicate on the same.

Order pronounced in the open court on 10.08.2026.

Sd/- Sd/- (M. BALAGANESH) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:10th August, 2026

7 ITA No.5677/Del/2025 Moyez vs. ITO dk

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. Dr, ITAT, Mumbai 5. Guard File. BY ORDER, //True COPY// (Assistant Registrar) ITAT, Delhi Benches