RAJESH GARG,DELHI vs. INCOME TAX OFFICER, DELHI

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ITA 2888/DEL/2026Status: DisposedITAT Delhi20 July 2026AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, while noting the assessee's non-compliance, granted one more opportunity to present the case before the CIT(A) to ensure principles of natural justice are followed. The CIT(A) is directed to adjudicate all grounds on merits.

What were the facts?

The assessee's case was reopened due to information about availing accommodation entries through bogus purchases amounting to Rs. 2,06,18,607. The Assessing Officer made an addition under Section 68 for this amount. The CIT(A) upheld the addition due to the assessee's non-compliance during appellate proceedings.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits due to alleged non-compliance, and whether the addition under Section 68 for bogus purchases was justified.

Which sections of the Income-tax Act were involved?

Section 68,Section 148,Section 142(1),Section 144B,Section 250,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “E” NEW DELHI

For Appellant: Shri Pradeep Garg, Advocate &, Shri Aman Narang, Advocate
For Respondent: Shri Tarun Sharda, Sr. DR
Hearing: 20.07.2026Pronounced: 20.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “E” NEW DELHI MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER AND SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No.2888/Del/2026 Assessment Year : 2016-17 Rajesh Garg, ITO, C-3/23, 1st Floor, Sector 15, Assessment Unit, Rohini, Income-tax Department, Delhi – 11 089. v/s Delhi. PAN: BGZPG9678J Appellant Respondent Assessee by Shri Pradeep Garg, Advocate & Shri Aman Narang, Advocate Department by Shri Tarun Sharda, Sr. DR Date of Hearing 20.07.2026 Date of Pronouncement 20.07.2026 ORDER Per Kavitha Rajagopal, J M: This appeal is filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act', for short), pertaining to the Assessment Year (‘A.Y.’ for short) 2016-17.

2.

The assessee has raised the following grounds of appeal:- “That on the facts and in the circumstances of the case and in law, the impugned order passed by the Learned Commissioner of Income-tax (Appeals) is arbitrary, erroneous and bad in law, and therefore liable to be set aside.

2 ITA No.2888/Del/2026 Rajesh Garg vs. ITO 2. That the Learned CIT(A) has erred in law and on facts in dismissing the appeal without adjudicating the grounds on merits, merely on alleged non- compliance, thereby violating the principles of natural justice. 3. That the Learned CIT(A) has failed to discharge the statutory obligation cast under section 250(6) of the Income-tax Act, 1961, which mandates passing of a speaking order on merits, and therefore the impugned order is liable to be quashed. 4. That the impugned order passed by the Learned CIT(A) without adjudicating the issues on merits is contrary to settled judicial position that an appeal cannot be dismissed for non-prosecution and must be decided on merits. 5. That the Learned CIT(A) has erred in upholding the action of the Assessing Officer in making an addition of ₹2,06,18,607 under Section 68 of the Income Tax Act, 1961, ignoring the true nature of the transactions. 6. That the Learned CIT(A) has failed to appreciate that the impugned transactions relate to purchase of goods in the course of regular business, and therefore the provisions of Section 68 dealing with unexplained cash credits are not applicable. 7. That the Learned CIT(A) has failed to appreciate that the sales declared by the appellant have not been disputed by the Assessing Officer, and therefore disallowance of the entire purchases is contrary to settled legal principles. 8. That the Learned CIT(A) has erred in sustaining the addition without rejecting the books of account of the appellant, which is contrary to settled principles of assessment under the Income Tax Act. 9. That the addition sustained is excessive, arbitrary and disproportionate, and therefore liable to be deleted or substantially reduced. 10. That the appellant craves leave to add, amend, modify or withdraw any of the grounds of appeal at the time of hearing.” 3. The brief facts are that the assessee is an individual and had filed his return of income for the year under consideration declaring total income at Rs.3,68,280/-. The assessee’s case was reopened pursuant to the information that assessee is one of the beneficiaries of availing accommodation entries from Shri Rakesh Ranjan,

3 ITA No.2888/Del/2026 Rajesh Garg vs. ITO Shri Raghvendra Singh and Shri Abhesekh Jha amounting to Rs.2,06,18,607/- by way of bogus purchases. Notice under Section 148 dated 28.07.2022 was issued to the assessee which was not received and, subsequently, notice under Section 142(1) was duly issued and served upon the assessee calling for details pertaining to the impugned transaction. The Ld. AO passed the assessment order u/s 147 r.w.s. 144B of the Act dated 24.05.2023 determining the total income at Rs.2,06,18,607/-, after making an addition of Rs.2,06,18,607/- as unexplained cash credit under Section 68 of the Act. The Ld. AO also initiated penalty proceedings u/s.271(1)(c) of the Act.

4.

Aggrieved, the assessee was in appeal before the First Appellate Authority, who vide order dated 28.01.2026, upheld the addition made by the Ld. AO on the ground that the assessee was non-compliant throughout the appellate proceedings in spite of various opportunities granted. Aggrieved, the assessee is in appeal before us challenging the order of the Ld. CIT(A).

5.

We have heard the rival submissions and perused the material available on record. It is observed that the assessee has been non-compliant during appellate proceedings before the Ld. CIT(A) and has also failed to explain the genuineness of the transaction with cogent documentary evidence called for by the Ld. AO and the CIT(A). Before us, the Ld. AR for the assessee prayed that the assessee be given one more opportunity to present his case before the Ld. CIT(A) stating that the assessee has got a good case on the merits.

4 ITA No.2888/Del/2026 Rajesh Garg vs. ITO 6. The Ld. DR vehemently opposed to granting the assessee another opportunity for the reason that the assessee has been non-compliant throughout the proceedings before the lower authorities.

7.

On the above facts of the case, 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 assessee is directed to strictly comply with the proceedings before the Ld. CIT(A) who is to adjudicate all the grounds raised by the assessee, both legal as well as on the merits, in accordance with the provisions of law and on the merits of the case. The grounds of appeal raised by the assessee are hereby allowed for statistical purposes

8.

In the result, the appeal filed by the assessee is allowed for statistical purposes as per the above observations.

9.

In the result, the appeal is allowed for statistical purposes.

Order pronounced in the open court on 20 .07.2026.

Sd/- Sd/- (RENU JAUHRI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31st July, 2026 dk

5 ITA No.2888/Del/2026 Rajesh Garg vs. ITO 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

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