YUSUF HASANALLY NETTERWALA,MUMBAI vs. ITO, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 1109 /MUM/2026 Assessment Year: 2012-13

Yusuf Hasanally Netterwala, Income Tax Department Ward 1001, Crescent Tower 159-161 17(3)(5), Mumbai – 400051, Samuel Street Masjid Bunder Vs. Maharashtra. W, Mumbai – 400009, Maharashtra.

PAN NO. ADOPN 1470 G Appellant Respondent

Assessee by : None

Revenue by : Shri Rajgopal Parthasarathi – SR DR.

Date of Hearing : 22/07/2026 Date of pronouncement : 24/07/2026

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 12.01.2026, passed by the learned Commissioner of Income-Tax (Appeals) – National Faceless Appeal Centre, Delhi [in short, ‘the Ld. CIT(A)’], for Assessment Year (in short ‘A.Y’), 2012-13, raising following grounds:

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“Ground No. 1 – Invalid reassessment u/s 147 The learned Commissioner of Income Tax (Appeals) erred in law and on facts in upholding the reassessment initiated under section 147 of the Income-tax Act, 1961, which was based merely on information regarding bank transactions, without any independent application of mind or formation of a valid reason to believe that income chargeable to tax had escaped assessment. The reassessment proceedings are bad in law and liable to be quashed.

Ground No. 2 – Assessment completed ex-parte without proper opportunity The learned Assessing Officer erred in completing the assessment under section 144 read with section 147 of the Act in a mechanical manner, without granting effective and meaningful opportunity to the appellant to explain the nature and source of the transactions, thereby violating the principles of natural justice. Ground No. 3 – Addition u/s 68 without existence or rejection of books The learned Assessing Officer erred in making an addition of ₹1,12,34,621/- under section 68 of the Act by treating bank credits as unexplained cash credits, without establishing the existence of books of account of the appellant and without rejecting the same under section 145(3). The addition made solely on the basis of a bank statement is illegal and unsustainable. Ground No. 4 – Wrong application of section 69A on cash deposits The learned Assessing Officer erred in making an addition of ₹24,50,000/- under section 69A of the Act in respect of cash deposits, without recording any finding that such money was not recorded in the books of account, if any, and without examining the nature and source of such deposits. The addition is based on presumption and deserves to be deleted. Ground No. 5 – Double addition and non-grant of telescoping The learned Assessing Officer erred in law in making separate additions under sections 68 and 69A in respect of the same bank account transactions, resulting in double taxation of the same amount, without granting telescoping or set-off, which is contrary to settled legal principles. Ground No. 6 – Failure to examine nature of business receipts The learned Assessing Officer erred in not examining whether the bank credits represented business receipts of the proprietary concern and in taxing the entire deposits as income, without allowing deduction of expenses or considering the real income principle.

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Ground No. 7 – Mechanical confirmation by CIT(A) The learned CIT(A) erred in dismissing the appeal primarily on the ground of alleged nonprosecution and in mechanically confirming the additions without independent adjudication on merits, thereby passing a non-speaking and perverse order. Ground No. 8 – Failure to exercise powers under section 250(4) The learned CIT(A) failed to exercise powers vested under section 250(4) of the Act to call for records, additional evidence, or a remand report, despite the fact that the assessment was completed ex-parte and substantial additions were made without enquiry. Ground No. 9 – Disallowance of Chapter VI-A deduction The learned Assessing Officer erred in disallowing deduction of ₹50,000/- claimed under Chapter VI-A without granting opportunity to furnish supporting evidence, and the learned CIT(A) erred in confirming the same without adjudication on merits. Ground No. 10 – Order based on assumptions and conjectures The impugned orders passed by the lower authorities are based on assumptions, presumptions, and surmises, without proper enquiry or evidence, and are therefore bad in law and liable to be set aside. Ground No. 11 – Levy of interest and initiation of penalty proceedings The learned Assessing Officer erred in levying interest under sections 234A, 234B, 234C and 234D and in initiating penalty proceedings, which are consequential and liable to be deleted upon deletion of the additions.” 2. At the outset, we note that despite notifying neither any one attended on behalf of the assessee nor any request for adjournment was filed and therefore the appeal was heard ex-parte qua the assessee after hearing the arguments of the Ld. Departmental Representative.

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Assessing Officer, before the Learned Commissioner of Income Tax (Appeals), and now before this Tribunal. Consequently, no explanation or submissions on the merits of the additions made by the Assessing Officer were placed before the authorities below for their consideration. Ordinarily, such persistent non-compliance would not warrant any indulgence. However, keeping in view the settled principle that a litigant should ordinarily be afforded a reasonable opportunity of being heard and that matters should, as far as possible, be decided on their merits rather than on account of procedural defaults, we consider it appropriate, in the peculiar facts and circumstances of the present case, to grant the assessee one final opportunity. Accordingly, the impugned order is set aside and the matter is restored to the file of the Assessing Officer for de novo adjudication after affording the assessee an adequate opportunity of being heard. The assessee shall place all relevant facts, evidence and submissions before the Assessing Officer, who shall decide the issues afresh by passing a speaking order in accordance with law.

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aforesaid opportunity in the interest of substantial justice, we deem it appropriate to impose costs of Rs.11,000/- upon the assessee. The said amount shall be deposited in the Prime Minister's Relief Fund within one month from the date of receipt of this order, and proof of such payment shall be furnished before the Assessing Officer. The Assessing Officer shall verify compliance with this direction before proceeding to adjudicate the matter afresh. It is made clear that the assessee shall extend full cooperation in the remand proceedings and shall not seek unnecessary adjournments.

Order pronounced in the open Court on 24/07/2026.

Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 24/07/2026 M. Ranganath Vittal , Sr. P.S.

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Copy of the Order forwarded to :

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai