PANKAJ SINGHAL,DELHI vs. INCOME TAX OFFICER (ITO), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA Nos. 8796 & 8797/Del/2025 Assessment Year: 2020-21 ITA Nos. 8798 & 8799/Del/2025 Assessment Year: 2022-23

Pankaj Singhal, Vs Income Tax Officer (ITO) 373, CA, Kidwai Gali, Near Shiv Ward- Del-W-(259) (8), Mandir Babarpur, Income Tax Department, Shahdara, Delhi Delhi- 110032 (APPELLANT) (RESPONDENT) PAN No. GOTPS3239N

Assessee by: None Revenue by : Ms. Priyanka Dubey, Sr. DR

Date of Hearing: 15.07.2026 Date of Pronouncement: 22.07.2026 ORDER

These assessee's four appeals i.e. ITA Nos. 8796 & 8797/Del/2025 for the former assessment years 2020-21 & ITA Nos. 8798 & 8799/Del/2025, for the latter assessment year 2022-23, arise against Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre (in short, 'CIT(A)/NFAC'), New Delhi's as many orders dated 29.10.2025 & 24.10.2025 passed in DINs & Order Nos. ITBA/NFAC/S/250/2025-26/1082106717(1), ITBA/

2 NFAC/S/250/ 2025-26/1081977553(1), ITBA/NFAC/S/250/2025- 26/ 1081978218(1) & ITBA/ NFAC/ S/ 250/ 2025-26/ 1082107287(1), involving proceedings u/s 271B, 147/144, 143(3), 270A of the Income Tax Act, 1961; hereinafter referred to as, 'the Act', respectively.

Cases called twice. None appears at the assessee’s behest despite the fact that today’s the sixth of hearing in all these instant appeals he is accordingly proceeded ex-parte.

3 framed on 31.01.2025 added the assessee’s GP only amounting to Rs. 56,82,293/- . The Revenue could hardly dispute that neither suppression of turnover nor the alleged lower GP nowhere formed the Assessing Officer’s foregoing reopening reasons. Meaning thereby that he has not made any addition qua his aforesaid five reasons recorded for the purpose of initiating the impugned reopening section 148/147 of the Act.

The assessee succeeds in his former quantum appeal ITA No. 8797/Del/2025 as well as section 271B consequential penalty appeal ITA No. 8796/Del/2025 in very terms therefore.

4 appellate discussion upholding the Assessing Officer’s impugned finding adding the GP Rate going by declaring in the assessee’s book results only; reading as under: “5. Facts of the case and decision: 5.1 In view of the findings made by the Assessing officer, the grounds of appeal, statement of facts, written submission made & decisions relied on by the appellant, and the material available on record, the appeal is decided as under; 5.2 The assessee filed return of income u/s 139(4) for the A.Y. 2022-23, declaring total income of Rs. 8,87,400/-. 5.3 From the perusal of return for the A.Y.2020-21, the total receipts of the assessee were found to be suppressed to an amount of Rs. 9,37,38,880/-. Further, the AO held that the profit margin in whole business of wheat and rice is generally 5% to 15% for wholesalers. The assessee is also doing retail sale and purchase of wheat and rice, therefore profit margin should be more in this business. The gross profit reflected in the return is not acceptable as it is very low. 5.4 Accordingly, Gross Profit Ratio (2.73%) declared by the assessee for the period under consideration, was applied to the same by the AO and income of Rs. 25,59,071/- was added to the total income of the assessee for the period under consideration.

6.1 The appellant contended that the addition is arbitrary, the allegation of suppression of receipts is without basis and the AO failed to consider the submissions made.

6.2 The submissions made are carefully considered. The AO gave findings in the assessment order that as seen from the schedule TDS2 the total credits as per the form 16A issued by deductors were at Rs 14,36,21,667/- as against the total credits of Rs 9,90,42,566/- as per the Trading & Profit & Loss

5 account. Further according to the AO, the total credits as per the account statement of current account no. 9953637614 held with Kotak Mahindra Bank Ltd, Lok Vihar branch Delhi for the AY 2022-23 were at Rs 19,217,81,446/-. According to the AO, there was suppression of Rs 9,37,38,880/-. The AO issued a show cause notice requiring the assessee to explain the difference. The assessee failed to respond to the show cause notice issued by the Assessing Officer. In the absence of explanation from the assessee, the AO brought the above suppressed receipts to tax by adopting the same gross profit rate of 2.73% declared by the assessee for the period under consideration. During the present appellate proceedings also appellant failed to reconcile the total credits as per the Profits& Loss account vis a vis TDS statements. During the present appellate proceedings, the appellant further failed to reconcile the difference between the total credits found in the above bank account vis a vis Profit & Loss account. In view of the specific findings made by the AO and in the absence of explanation and reconciliation from the appellant, the addition made by the AO is held to be justified. The gross profit rate of 2.73% is held to be justified.

Moreover, in the connected appeal filed by the appellant with regard to the quantum appeal for AY 2022-23, i.e., the penalty appeal filed by the appellant in connection with the quantum appeal for AY 2022-23, the appellant has accepted that indeed there was a suppression of income, however submitted that the suppression was not a deliberate one. The relevant portion of the said submission can be seen as under:

The Assessing Officer failed to appreciate that the alleged difference in turnover and income was based on reconciliation issues and not due to deliberate suppression or misrepresentation. Section 270A(6)(a) specifically provides relief where the explanation offered by the assessee is bona fide and material facts have been disclosed. My explanations, including discrepancies arising from Form 26AS and unaudited books, were overlooked.

Hence grounds of appeal no. 1 and 2 are dismissed.

6 6.3 The appellate submitted that there is violation of principles of natural justice. The appellant relied upon plethora of case laws.

6.4 The submission made and decisions relied on by the appellant are carefully considered. During the assessment proceedings, the Assessing Officer has given multiple opportunities to the appellant. It is seen that the Assessing Officer has given specific showcause notice dated 18.03.2024 in respect of suppression of receipts, failure to get the books of account audited, and the justification of gross profit margin. The appellant failed to furnish response to the said show cause notice. In the absence of explanation, the Assessing Officer considered the same gross profit margin declared by the assessee for the suppressed receipts.

Hence the Grounds of appeal 3 and 4 relating to the violation of principles natural justice are dismissed.

6.5 The ground no. 5 appeal raised by the appellant are directed against the initiation of penalty proceedings u/s 271B and 270A of the Act. Since, the issue of initiation of penalty proceeding is beyond the purview of the current appeal u/s 246A of the Act, the ground no.5 of appeal is dismissed.

6.6 The ground no. 6 of appeal raised by the appellant is regarding the applicability of provisions of section 44AB. The claim of the appellant is that the prescribed turnover limits are not breached in his case and hence provisions of section 44AB are not applicable. The submission made by the appellant is carefully considered. As noted above, the AO gave a finding that the appellant suppressed his business turnover and the assessee is liable for getting his books of account audited u/s 44AB. The assessee failed to respond to the show cause notice issued by the AO. During the present appellate proceedings, the appellant further failed to reconcile the total receipts and demonstrate how the provisions of section 44AB are not applicable to him. Hence, the ground no. 6 of appeal is dismissed.

Order Pronounced in the Open Court on 22.07.2026.

Sd/- Sd/- (KRINWANT SAHAY) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22.07.2026 *Pooja Mittal, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR