SANJAY KUMAR BHATI,HYDERABAD vs. ITO, WARD -7(1), HYDERABAD

आदेश / O R D E R PER MADHUSUDAN SAWDIA, AM:

This appeal is filed by Shri Sanjay Kumar Bhati (“the assessee”),

feeling aggrieved by the order passed by the Learned Commissioner of

Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi

(“Ld. CIT(A)”) dated 22.09.2025 for the A.Y. 2019-20.

present appeal before this Tribunal. The assessee has filed a petition

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 2 :: seeking condonation of delay supported by an affidavit explaining the

reasons for the delay. The Learned Authorised Representative (“Ld. AR”)

submitted that the accountant of the assessee, who was looking after the

tax matters of the assessee and was coordinating with the counsel, had

proceeded on leave for about two weeks for personal reasons and

thereafter did not rejoin the assessee-firm. The e-mail ID through which

the order passed by the Ld. CIT(A) was received was under the control of

the said accountant. Consequently, the order of the Ld. CIT(A) did not

come to the knowledge of the assessee immediately. In support of the

aforesaid explanation, the assessee has also placed on record the affidavit

of the said accountant, Shri Pokarmal Tiwari. It was further submitted

that only after the new accountant joined the assessee-firm and noticed

the appellate order was the assessee informed about the same,

whereafter immediate steps were taken for filing the present appeal. In

this process, a delay of 86 days occurred. It was, therefore, submitted

that the delay was neither deliberate nor attributable to any mala fide

intention, and the same deserves to be condoned.

submitted that he has no serious objection if the delay is condoned.

and perused the material available on record. The explanation furnished

by the assessee for the delay is duly supported by an affidavit and, in our

considered opinion, constitutes a reasonable and sufficient cause within

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 3 ::

the meaning of law. There is nothing on record to suggest that the delay

was intentional or occasioned by any mala fide conduct on the part of the

assessee. Further, we find that the Hon’ble Supreme Court, in the case of

Vidya Shankar Jaiswal Vs. CIT (174 taxmann.com 21), has held that a

justice-oriented and liberal approach should be adopted while considering

applications for condonation of delay. The settled principle of law is that,

where sufficient cause is shown and no prejudice is caused to the opposite

party, a litigant should ordinarily not be denied an opportunity of having

the matter decided on merits. Respectfully following the aforesaid

principle laid down by the Hon’ble Supreme Court and considering the

facts and circumstances of the present case, we are satisfied that the

assessee was prevented by sufficient cause from filing the appeal within

the prescribed period of limitation. Accordingly, the delay of 86 days in

filing the present appeal is condoned, and the appeal is admitted for

adjudication on merits.

1) The order passed by the Ld. National Faceless Appeal Centre (NFAC)/ First Appellate Authority(FAA) is without appreciation of facts and law on record and in violation of the principles of natural justice. 2) That NFAC erred in upholding the reopening of assessment u/s 147 of the Act without satisfying the mandatory conditions and procedure required for such reopening and without providing the underlying evidences based on which the reopening has been done, thereby rendering the entire assessment proceeding invalid and bad in law and in violation of principles of Natural Justice.

3) That the Jurisdictional Assessing Officer(JAO) erred in issuing the notice u/s 148 dt. 30.03.2023, by wrongly assuming jurisdiction, since Sec. 151A r/w notification issued by CBDT mandates issuance of notice by Faceless Assessing Officer(FAO) and not by JAO and hence all

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 4 ::

consequential proceedings, notices, order as well as penalty orders are non-est and bad in law.

4) That the Approving Authority erred in giving a mechanical approval overlooking the apparent errors in the procedure followed by the Assessing Officer.

5) The NFAC erred in upholding the order of the AO wherein the entire allegation and addition is based solely on a third-party Big Wave Traders data from VKC search, without bringing on record specific details such as dates, invoices, OR challans OR any such evidences, if any, found during the search on VKC.

6) That the reliance placed by the Assessing Officer on the third- party data without granting the Appellant an opportunity to cross- examine the concerned persons is a violation of the principles of natural justice.

7) The NFAC erred in upholding the order of the Assessing Officer ignoring the explanation and evidences such as books and VAT/GST returns, etc., submitted by the Appellant which prove that there was no purchase transaction outside the books maintained by him and the alleged purchase transaction involving cash payment was not done by the Appellant.

8) The NFAC erred in ignoring the fundamental principle that the Appellant cannot prove a negative fact i.e. the Appellant cannot be made to provide details about a transaction which it had never entered into.

9) That NFAC erred in sustaining the addition of Rs. 26,63,842/-, by estimating the profit 8 percent of the alleged cash transactions of Rs. 3,32,98,025/- without tangible material suggesting escapement of income attributable to the Appellant.

10) Without prejudice to the above, the Lower Authorities ought to have restricted the estimation of profit to the Gross Profit Percentage and Net Profit Percentage declared by the Appellant regularly.

11) The Appellant craves leave to add, amend, alter OR delete any of the above grounds of appeal OR any other grounds that may be urged at the time of hearing and the Honourable ITAT may be pleased to delete the arbitrary additions deciding appeal in favour of the Appellant.

before the Ld. CIT(A) for Assessment Year 2019-20 against the

assessment order passed by the Learned Assessing Officer (“Ld. AO”)

under section 147 read with section 144B of the Income-tax Act, 1961

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 5 :: (“the Act”), dated 14.03.2024. The Ld. CIT(A) confirmed the additions

made by the Ld. AO and dismissed the appeal of the assessee.

before us. At the outset, the Ld. AR submitted that the assessee had also

filed an appeal before the Ld. CIT(A) for Assessment Year 2018-19

involving an identical issue, which is still pending adjudication before the

Ld. CIT(A). He invited our attention to para no.5 of the impugned order

and submitted that the Ld. CIT(A) has reproduced the written submissions

filed by the assessee for Assessment Year 2018-19 instead of those

pertaining to the year under consideration. He further invited our

attention to para no.8 of the impugned order and submitted that while

adjudicating the appeal for Assessment Year 2019-20, the Ld. CIT(A) has

considered the facts and details relating to Assessment Year 2018-19. It

was, therefore, contended that the impugned order has been passed on

the basis of facts pertaining to a different assessment year and is liable to

be set aside.

that the aforesaid mistake is apparent from the record.

materials available on record. We have also gone through para nos. 5 to 8

of the impugned order, which is to the following effect:

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 6 ::

"Sir, Your Appellant is an individual running a business in the name of Sachin overseas (Proprietor Sanjay Kumar Batı your Appellant) at Begum Bazar Hyderabad dealing in Dry Fruits and Nuts and other allied commodities. For the AY 2018-19 your Appellant filed the return of income declaring a taxable income of Rs. 41,64,200/- on 23-09-2018. The assessment was reopened as there was a search in one of the suppliers. viz VKC group. During the search operations VKC Group stated that an amount of Rs. 2,57,27,700/- was received in cash from the Appellant for the supply of Dry Fruits & Nuts. The notice was issued for re-opening the assessment, and the Appellant filed all the details and stated that no cash purchase was made from the above party during the FY 2017-18. However the Assessing Officer did not agree with the submission made by the Appellant and Re-opened the assessment by invoking the provisions under the Income Tax Act. The Appellant filed the return in response to the notice u/s 147/148 and the return of income was filed on 14-05-2022 declaring the taxable income of Rs.41,64,200/- The assessment was completed after making an addition of Rs. 20,58,216/- and arrived at a Total Income of Rs. 62,22,416/- and the tax was levied accordingly. The Appellant preferred an Appeal against the said order. The Appellant furnished all the details namely Total Purchases, Total Sales and the GST Return for the FY 2017-18. The Assessing Officer did not find any difference with regard to Purchase and Sales, however, the Assessing Officer relied on the declaration given by the VKC Nuts Pvt Ltd and he made an estimated addition of 8% on the amount of RS. 2,57,27,700/- which was declared by VKC Nuts Pvt Ltd. during the course of search operations being the cash sales. During the course of assessment proceeding of your Appellant for the AY 2018-19, the Assessing Officer stated that unaccounted purchase was made by your Appellant during FY 2017-18 from VKC Nuts Pvt Ltd, whereas the Assessing Officer did not give any details in support of this cash purchases made by your Appellant from VKC Nuts Pvt Ltd even after asking for the same. Your Appellant furnished the details of Purchases and Sales date wise and month wise and also produced the ledger accounts of VKC Nuts PVT Ltd Mumbai, VKC Nuts Pvt Ltd Ghaziabad and VKC Nuts Pvt Ltd Jammu and the total purchase made by your Appellant during the FY 2017- 18 was Rs. 1,24,35,327/- only from the above group. All the transactions are supported by purchase invoices. During the course of Assessment proceedings your Appellant requested the Assessing Officer to furnish the details of cash purchases made by your Appellant from VKC Nuts Pvt Ltd. In order to rebut the statement made by VKC Nut Pvt Ltd but, however, The Assessing Officer failed to furnish the details sought by the Appellant, and he went on to complete the Assessment on the basis of the statement given by VKC Nuts Pvt Ltd and estimated the income at the rate of 8% on Rs.2,57,27,700/-, and made an addition of Rs. 20,58,216/, Your Appellant submits that the turnover for the FY 2017-18 was more than Rs. I core. The tax audit was conducted and tax audit report was also enclosed to

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 7 ::

the return of income. It may be seen that NP Ratio was 2.4% for the FY 2017-18 on a turnover of Rs. 11,18,17,230/- as declared in the Trading Account, which was also mentioned by the Assessing Officer in the assessment order, however, the assessing officer took a view that your appellant would have earned 8% on such cash purchases without any material facts on hand, and your Appellant submits without admitting the cash purchase states that the Assessing Officer should have restricted the addition to the extent of 2.4% only. However, your appellant submits that he did not purchase any goods from VKC Nuts Pvt Ltd in cash during the Financial Year 2017-2018. The Sales, Purchase details, Vat CST Returns for FY 2017-18 are enclosed. Appellant Sanjay Kumar Bhati".

submissions of the Ld. AR. It is evident that in para no.5, the Ld. CIT(A)

has reproduced the submissions filed by the assessee for Assessment

Year 2018-19, and in para no.8, while adjudicating the appeal for

Assessment Year 2019-20, he has considered the facts and details

pertaining to Assessment Year 2018-19. Thus, the impugned order has

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 8 :: admittedly been passed on the basis of facts relating to a different

assessment year instead of the year under consideration. In our

considered opinion, such an adjudication cannot be sustained in law, as

the appeal for Assessment Year 2019-20 is required to be decided

independently on the basis of the facts, material, and submissions

relating to that assessment year alone. Accordingly, in the interest of

justice, we set aside the impugned order of the Ld. CIT(A) and restore the

matter to his file with a direction to adjudicate the appeal afresh on

merits, strictly on the basis of the facts and material relating to

Assessment Year 2019-20, after providing adequate opportunity of being

heard to the assessee. The assessee is also directed to extend full

cooperation and furnish all necessary details as may be called for by the

Ld. CIT(A).

restored the matter to his file for fresh adjudication on merits, we do not

consider it necessary to adjudicate the other grounds raised by the

assessee in the present appeal. All such grounds are, therefore, left open.

The assessee is at liberty to raise all the contentions and grounds,

including those raised in the present appeal, before the Ld. CIT(A), who

shall consider and adjudicate the same in accordance with law after

providing adequate opportunity of being heard to the assessee.

ITA No.570/Hyd/2026 Sanjay Kumar Bhati :: 9 :: 12. In the result, the appeal of the assessee is allowed for statistical

purposes.

Order pronounced in the open Court on 24th July, 2026.

Sd/- Sd/- (रिवश सूद) (मधुसूदन साविडया) (RAVISH SOOD) (MADHUSUDAN SAWDIA) �ाियक सद� /JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER

Hyderabad, dated 24th July, 2026. TLN

आदेशकी �ितिलिप अ�ेिषत/ Copy of the order forwarded to:

िनधा�रती/The 1 : SANJAY KUMAR BHATI 15-9-225/C, BEGUM BAZAR, HYDERABAD- Assessee 500012, TELANGANA राज�/ The Revenue 2 : ITO, WARD -7(1), SIGNATURE TOWER, OPP- BOTONICAL GARDENS, KONDAPUR, SERLINGAMPALLY, HYDERABAD-500084, TELANGANA 3 The Principal Commissioner of Income Tax, Hyderabad. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, हैदराबाद / DR, ITAT Hyderabad. 4 गाड�फ़ाईल / Guard file 5

आदेशानुसार / BY ORDER TUMMALACHARLA Digitally signed by TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.07.24 15:26:46 +05'30' Sr. Private Secretary ITAT, Hyderabad