ROHIT ARORA,LUCKNOW vs. THE ASSESSING OFFICER, NFAC

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW ‘A’ BENCH, LUCKNOW BEFORE SH. KUL BHARAT, VICE PRESIDENT AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA Nos.147 to 152/LKW/2026 A.Ys. 2013-14 to 2018-19 Rohit Arora, vs. The Assessing Officer National 165/55A Mahila PG College Faceless Assessment Kachcha Hata Aminabad Lucknow, U.P. 226018 PAN: ABAPA2655C (Appellant) (Respondent) Assessee by: Sh. Rakesh Garg, Advocate Revenue by: Sh. Sudhakar Shukla, DR Date of hearing: 22.07.2026 Date of pronouncement: 31.07.2026 O R D E R PER NIKHIL CHOUDHARY, A.M.: These six appeals have been filed by the assessee against the separate orders of the learned CIT(A), NFAC, wherein the learned CIT(A) has dismissed all the appeals of the assessee that were preferred against assessment orders passed by the Assessing Officer under section 147 read with sections 144 and 144B of the Income-tax Act, 1961 for the assessment years 2013-14 to 2018-19. The grounds of appeal in these six appeals are as under: ITA No.147/LKW/2026 (2013-14) “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition/disallowance of 32637948 made by the Assessing Officer under section 69 A of the Income Tax Act, 1961. 2. That the learned CIT(A) failed to appreciate that the Assessing Officer had acted beyond Jurisdiction and without proper appreciation of facts and evidence placed on record. 1

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 3. That the learned CIT(A) erred in confirming the disallowance of expenses amounting to Rs.32637948, ignoring the documentary evidence and judicial precedents supporting the appellant's claim. 4. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 3,20,80,078/- in the hands of the appellant on the basis of information reported on the Insight Portal against the individual partner's PAN, whereas the said amount actually pertains to the firm's account. The firm has already duly disclosed the said amount in its return of income. The impugned addition results in double taxation of the same income, which is contrary to law and principles of equity. 5. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, as adequate opportunity of being heard was not provided to the appellant. 6. That the learned CIT(A) erred in law in not considering binding precedents of Hon'ble High Courts and the Hon'ble Supreme Court cited before him. 7. That the learned CIT(A) erred in law and on facts in issuing the notice under section 143(2) of the Income-tax Act, 1961, in a format not prescribed by the CBDT Circular F.No.225/157/2017/ITA.Il dated 23rd June 2017. The said circular, being binding on the Department, mandates issuance of notices strictly in the prescribed formats for Limited Scrutiny, Complete Scrutiny, or Compulsory Manual Scrutiny. The impugned notice, not being in conformity with the prescribed format, is invalid and without jurisdiction. Consequently, the assessment proceedings initiated pursuant thereto are bad in law and liable to be quashed. 8. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing. ITA No.148/LKW/2026 (2014-15) “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition/disallowance of Rs. 27944010/- made by the Assessing Officer under section 69 A of the Income Tax Act, 1961. 2. That the learned CIT(A) failed to appreciate that the Assessing Officer had acted beyond jurisdiction and without proper appreciation of facts and evidence placed on record. 3. That the learned CIT(A) erred in confirming the disallowance of expenses amounting to Rs. 32637948, ignoring the documentary evidence and judicial precedents supporting the appellant's claim. 4. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 27944010/- in the hands of the appellant on the basis of information reported on the Insight Portal against the individual partner's PAN, whereas the said amount actually pertains to the firm's account. The firm has already duly disclosed the said amount in its return of income. The

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 impugned addition results in double taxation of the same income, which is contrary to law and principles of equity. 5. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, as adequate opportunity of being heard was not provided to the appellant. 6. That the learned CIT(A) erred in law in not considering binding precedents of Hon'ble High Courts and the Hon'ble Supreme Court cited before him. 7. That the learned CIT(A) erred in law and on facts in issuing the notice under section 143(2) of the Income-tax Act, 1961, in a format not prescribed by the CBDT Circular F.No. 225/157/2017/ITA.II dated 23rd June 2017. The said circular, being binding on the Department, mandates issuance of notices strictly in the prescribed formats for Limited Scrutiny, Complete Scrutiny, or Compulsory Manual Scrutiny. The impugned notice, not being in conformity with the prescribed format, is invalid and without jurisdiction. Consequently, the assessment proceedings initiated pursuant thereto are bad in law and liable to be quashed. 8. That the appellant craves leave to add, amend, alter, or withdraw any of the above ground of appeal at the time of hearing. ITA No.149/LKW/2026 (2015-16) “1 That the learned Commissioner of income Tax (Appeals) has erred both in law and on facts in upholding the addition/disallowance of 1952360/ made by the Assessing Officer under section 69 A of the Income Tax Act, 1961. 2 That the learned CIT(A) failed to appreciate that the Assessing Officer had acted beyond jurisdiction and without proper appreciation of facts and evidence placed on record. 3. That the learned CIT(A) erred in confirming the disallowance of expenses amounting to Rs. 32637948, ignoring the documentary evidence and judicial precedents supporting the appellant's claim. 4. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 1461200/- in the hands of the appellant on the basis of information reported on the Insight Portal against the individual partner's PAN, whereas the said amount actually pertains to the firm's account. The firm has already duly disclosed the said amount in its return of income. The impugned addition results in double taxation of the same income, which is contrary to law and principles of equity. 5. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, as adequate opportunity of being heard was not provided to the appellant. 6. That the learned CIT(A) erred in law in not considering binding precedents of Hon'ble High Courts and the Hon'ble Supreme Court cited before him.

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 7. That the learned CIT(A) erred in law and on facts in Issuing the notice under section 143(2) of the Income-tax Act, 1961, in a format not prescribed by the CBDT Circular F.No. 225/157/2017/ITA.II dated 23rd June 2017. The said circular, being binding on the Department, mandates issuance of notices strictly in the prescribed formats for Limited Scrutiny, Complete Scrutiny, or Compulsory Manual Scrutiny. The impugned notice, not being in conformity with the prescribed format, is invalid and without jurisdiction. Consequently, the assessment proceedings initiated pursuant thereto are bad in law and liable to be quashed. 8. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing. ITA No.150/LKW/2026 (2016-17) “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition/disallowance of 27647977/made by the Assessing Officer under section 69A of the Income Tax Act, 1961. 2 That the learned CIT(A) failed to appreciate that the Assessing Officer had acted beyond jurisdiction and without proper appreciation of facts and evidence placed on record. 3. That the learned CIT(A) erred in confirming the disallowance of expenses amounting to Rs. 32637948, ignoring the documentary evidence and judicial precedents supporting the appellant's claim. 4. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of 27647977/- in the hands of the appellant on the basis of information reported on the Insight Portal against the individual partner's PAN, whereas the said amount actually pertains to the firm's account. The firm has already duly disclosed the said amount in its return of income. The impugned addition results in double taxation of the same income, which is contrary to law and principles of equity. 5. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, as adequate opportunity of being heard was not provided to the appellant. 6. That the learned CIT(A) erred in law in not considering binding precedents of Hon'ble High Courts and the Hon'ble Supreme Court cited before him. 7. That the learned CIT(A) erred in law and on facts in issuing the notice under section 143(2) of the Income-tax Act, 1961, in a format not prescribed by the CBDT Circular F.No. 225/157/2017/ITA.II dated 23rd June 2017. The said circular, being binding on the Department, mandates issuance of notices strictly in the prescribed formats for Limited Scrutiny, Complete Scrutiny, or Compulsory Manual Scrutiny. The impugned notice, not being in conformity with the prescribed format, is invalid and without jurisdiction. Consequently, the assessment proceedings initiated pursuant thereto are bad in law and liable to be quashed. 4

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 8. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing. ITA No.151/LKW/2026 (2017-18) “1 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition/disallowance of Rs. 8926188/ made by the Assessing Officer under section 69 A of the Income Tax Act, 1961. 2. That the learned CIT(A) failed to appreciate that the Assessing Officer had acted beyond Jurisdiction and without proper appreciation of facts and evidence placed on record. 3. That the learned CIT(A) erred in confirming the disallowance of expenses amounting to Rs. 28926188/, ignoring the documentary evidence and judicial precedents supporting the appellant's claim. 4 That the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 8926188/- in the hands of the appellant on the basis of information reported on the Insight Portal against the individual partner's PAN, whereas the said amount actually pertains to the firm's account. The firm has already duly disclosed the said amount in its return of income. The impugned addition results in double taxation of the same income, which is contrary to law and principles of equity. 5. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, as adequate opportunity of being heard was not provided to the appellant. 6. That the learned CIT(A) erred in law in not considering binding precedents of Hon'ble High Courts and the Hon'ble Supreme Court cited before him. 7. That the learned CIT(A) erred in law and on facts in issuing the notice under section 143(2) of the Income-tax Act, 1961, in a format not prescribed by the CBDT Circular F. No. 225/157/2017/ITA.II dated 23rd June 2017. The said circular, being binding on the Department, mandates issuance of notices strictly in the prescribed formats for Limited Scrutiny, Complete Scrutiny, or Compulsory Manual Scrutiny. The impugned notice, not being in conformity with the prescribed format, is invalid and without jurisdiction. Consequently, the assessment proceedings initiated pursuant thereto are bad in law and liable to be quashed 8. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing. ITA No.152/LKW/2026 (2018-19) “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition/disallowance of Rs. 2516807/ made by the Assessing Officer under section 69 A of the Income Tax Act, 1961.

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 2. That the learned CIT(A) failed to appreciate that the Assessing Officer had acted beyond jurisdiction and without proper appreciation of facts and evidence placed on record. 3. That the learned CIT(A) erred in confirming the disallowance of expenses amounting to Rs. 28926188/, ignoring the documentary evidence and judicial precedents supporting the appellant's claim. 4. That the learned Commissioner of Income Tax (Appeals) has erred in confirming the addition of Rs. 2516807/-in the hands of the appellant on the basis of Information reported on the insight Portal against the individual partner's PAN, whereas the said amount actually pertains to the firm's account. The firm has already duly disclosed the said amount in its return of Income. The Impugned addition results in double taxation of the same Income, which is contrary to law and principles of equity. 5. That the order passed by the learned CIT(A) is contrary to the principles of natural justice, as adequate opportunity of being heard was not provided to the appellant. 6. That the learned CIT(A) erred in law in not considering binding precedents of Hon'ble High Courts and the Hon'ble Supreme Court cited before him. 7. That the learned CIT(A) erred in law and on facts in issuing the notice under section 143(2) of the income-tax Act, 1961, in a format not prescribed by the CBDT Circular F.No. 225/157/2017/ITA.II dated 23rd June 2017. The said circular, being binding on the Department, mandates Issuance of notices strictly in the prescribed formats for Limited Scrutiny, Complete Scrutiny, or Compulsory Manual Scrutiny. The impugned notice, not being in conformity with the prescribed format, is invalic and without jurisdiction. Consequently, the assessment proceedings Initiated pursuant thereto are bad in law and liable to be quashed. 8. That the appellant craves leave to add, amend, alter, or withdraw any of the above grounds of appeal at the time of hearing.”

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 upon coming to know of the order, he took steps to prepare Form No. 36, collect the relevant documents, deposit the appeal fee and thereafter file the appeals. It has been submitted that the delay in filing the appeal was neither deliberate nor intentional but occurred due to the genuine and sufficient causes indicated hereinabove. Accordingly, it was prayed that the delay may kindly be condoned and an affidavit was also filed in support of the condonation petition. 3. Shri Sudhakar Shukla, ld. Sr. DR, responding to the condonation petition submitted that it was for the assessee to be vigilant about proceedings going on before the learned CIT(A), especially when his counsel was unwell, and that the assessee’s lack of vigilance could not be sufficient cause to allow condonation of the delay in filing the appeals. We have duly considered the petition and the submissions of the learned DR. We note that the regular counsel for the assessee who was engaged in the case had been suffering from cancer and ultimately expired as a result of the same. We further note that the e-mail ID of the counsel was provided in the return and was the ID to which the notices were sent prior to completion of assessment. We further note from a perusal of Form No. 35 that it was this e-mail ID that was provided to the learned CIT(A) and to which the notices were sent by him. It is, therefore, clear that the assessee was completely dependent upon his counsel for the representation before the Income-tax Department and the illness and subsequent death of the counsel would, therefore, in our opinion, constitute sufficient reason to explain both the non-compliance and the subsequent delay in the filing of the appeals. Therefore, keeping in mind that the cause of substantial justice must always prevail before technical considerations as laid down by the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors (1987)167 ITR 471 (SC),

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 and that the assessee does not stand to gain in any way from the delay, we condone the delay and admit the cases for hearing on their merits. 4. The facts of the case are that the Department received information flagged on the Insight Portal under CIB Information Module suggesting that the assessee had made huge credits to his various bank accounts maintained with Syndicate Bank and HDFC Bank, Aminabad Branch, Lucknow. The total amount of the such credits amounted to Rs.3,20,80,078/- in the assessment year 2013-14, Rs. 2,81,44,010/- in the assessment year 2014-15, Rs. 14,61,200/- in the assessment year 2015-16, Rs. 2,76,47,977/- in the assessment year 2016-17, Rs. 89,26,188/- in assessment year 2017-18, and Rs. 1,06,80,084/- in the assessment year 2018-19. The Assessing Officer observed that the assessee had declared meagre income in each assessment year, which did not explain the credits that were recorded in the said bank accounts. Accordingly, he came to the conclusion that income chargeable to tax had escaped assessment for all these assessment years and, he accordingly issued notices under section 148 to bring the escaped income to tax in all these assessment years. The AO records that he had issued various notices to the assessee during the course of these assessment proceedings but no response was received from the assessee. Therefore, he proceeded to complete the assessment in a best judgment manner and he made an addition of Rs. 3,20,80,078/- and Rs. 54,000/- under section 69A in the assessment year 2013-14. Similarly, on account of similar deposits, he made an addition of Rs. 2,79,44,010/- in the assessment year 2014-15; an addition of Rs.18,86,950/- in the assessment year 2015-16; an addition of Rs. 2,76,47,977/- in the assessment year 2016-17; an addition of Rs. 89,26,188/- in the assessment year 2017-18 and an addition of Rs. 25,16,807/- in the assessment year 2018-19. All these additions were made under section 69A of the Income Tax Act except for the addition made in 8

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 respect of A.Y. 2018-19, where the Assessing Officer treated the total credits as the turnover of the assessee’s business and adopted a profit rate of 8% on the same. 5. Aggrieved with all these additions to his income, the assessee went in appeals before the learned CIT(A). The learned CIT(A) issued three notices to the assessee in each case, the details of which were recorded in the course of his appellate orders. However, he also recorded the fact that the assessee did not make compliance to any of these notices that were issued by him. Thereafter, the learned CIT(A) decided not to give further opportunity to the assessee and restricting himself to the materials available on record, he proceeded to dismiss each ground of the assessee’s appeals in every assessment year after recording his reasoning for the same. 6. Aggrieved with the dismissal of his appeals, the assessee has now come before us, albeit after a delay, as narrated above. Shri Rakesh Garg, Advocate, (hereinafter referred to as the learned AR) pointed out that the assessee is a partner in the firm, Sahej Traders. All the credits that appeared in the various bank accounts actually pertained to this firm and the firm had disclosed the said amounts in its returns of income for the various assessment years. Thus, in fact, there was no case of escapement of income. Owing to the illness and subsequent demise of the counsel, the assessee was not able to make compliance at the stage of assessment proceedings or in first appeal and was therefore, unable to place the complete facts before the lower authorities to demonstrate that there was in fact no escapement of income as all the credits stood duly disclosed by the firm and offered to tax. It was, therefore, prayed that as since the failure was due to reasons that were beyond the control of the assessee, another chance may kindly be given to submit the necessary details so that he could demonstrate to the lower

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 authorities that in fact there was no basis for holding that any income had escaped assessment. Accordingly, he prayed that the matters may be restored to the file of the AO. 7. On the other hand, Shri Sudhakar Shukla, learned CIT-DR, (hereinafter referred to as the learned DR), submitted that the assessee had been non-compliant and negligent in responding to various notices issued by the lower authorities. In the circumstances, the AO was compelled to do the best judgment assessment. He submitted that unless the assessee gave an undertaking for compliance before the lower authorities, no purpose would be served by restoring the matter back to the AO. He, therefore, prayed that the Tribunal may give directions to the assessee to make due compliance before the Assessing Officer so that the facts of the case may clearly be brought on record. 8. We have duly considered the facts and circumstances of the case and the arguments advanced by both the parties. We have already noted, while condoning the delay in the filing of the appeal that the assessee was handicapped in making submissions during the course of assessment and first appeal on account of the illness of his counsel, who subsequently passed away as a result of such illness and that the evidence on record suggests that he was dependent upon the said counsel for making the necessary submissions of the replies. In the circumstances and after considering the arguments advanced by the learned AR that the credits in the said bank account do not represent the income of the assessee, but rather the income of the firm in which he was a partner and furthermore that the said firm had disclosed these credits in its income tax returns, we deem it to be in the interest of justice to restore all these matters back to the file of the Assessing Officer for a de novo assessment. We accordingly, direct the assessee to

ITA Nos. 147 to 152/LKW/2026 Rohit Arora A.Ys. 2013-14 to 2018-19 produce all necessary evidences before the AO to demonstrate his contention, that the credits in the identified bank accounts do not represent his income but they represent the income of the firm, which has already been disclosed by the said firms and offered to tax. The AO may consider such evidences and thereafter, pass a fresh order in accordance with law. 9. In the result, all six appeals are held to be allowed for statistical purposes. Order pronounced on 31.07.2026 in the Open Court. Sd Sd/- Sd/- [KUL BHARAT] [NIKHIL CHOUDHARY] VICE PRESIDENT ACCOUNTANT MEMBER DATED: 31/07/2026 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR, ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S.