RAVI KUMAR PROP. JAI GANESH WOOL STORE,LUDHIANA vs. INCOME TAX OFFICER, WARD 1(3), LUDHIANA

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “बी” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE �ी लिलत कुमार, �ाियक सद� एवं �ी मनोज कुमार अ�वाल, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 1492 /Chd/ 2025 िनधा�रण वष� / Assessment Year : 2018-19 Ravi Kumar बनाम The ITO Prop. M/s Jai Ganesh Wool Store, Ward-1(3) Plot No. 3677/4, Street No. 5 New Ludhiana Madhopuri, Ludhiana, Punjab-141001 �ायी लेखा सं./PAN NO: ALUPK9106E अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Gaurav Verma, Advocate राज� की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR (Virtual Mode) सुनवाई की तारीख/Date of Hearing : 02/07/2026 उदघोषणा की तारीख/Date of Pronouncement : 15/07/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 24/10/2025 for the Assessment Year 2018-19. 2. In the present appeal Assessee has raised the following grounds: 1. The Ld. CIT(Appeals), NFAC has erred in law and on facts by arbitrarily and wrongly passing the impugned order u/s 250 without providing effective opportunity of hearing and dismissed the appeal mechanically, thereby causing serious prejudice to the appellant. 2. The Ld. CIT(Appeals), NFAC has erred in law and on facts by violating the settled principles of natural justice in not deciding the case on merits and dismissing the appeal summarily, which is bad in law. 3. The Ld. CIT(Appeals), NFAC has erred in law and on facts that assessee did not file his return of income u/s 139(1) of I.T. Act for AY 2018- 19. But Assessee has filed itr of AY 2018-19 as on Aug 29,2018 vide ack no 207373280290818. The contention of the AO that the assessee has not filed ITR is, wrong. 4. The Ld. CIT(Appeals), NFAC has erred in law and on facts in upholding the addition of Rs. 6970000/-made u/s 69A of the Act by the Assessing Officer, as this is not income of assessee. This was Purchase consideration of property, the amount of which was paid by arranging funds from relatives

2 and friends, wherein disputed property was sold to him for which a court case is still pending. 5. The Ld. CIT(Appeals), NFAC has erred in law and on facts in upholding the addition of Rs. 6970000/-made u/s 69A of the Act on the basis of a false complaint without verifying the facts provided in the complaint. The Complainant (Dr. Ashok Kumar Garg) was son of Mr. Dharanmpal, who was involved in transaction of sale of disputed property. 6. The Ld. CIT(Appeals), NFAC has erred in law and on facts by failing to consider the evidences which the appellant possess such as Copy Of FIR, Affidavits, Declarations and part payment proofs, and thereby upholding the arbitrary addition made by the Assessing Officer. 7. The notices issued by the Ld. CIT(A), NFAC, were not received and the original Affidavit given by the Chartered Accountant that he did not receive any email on behalf of the assessee is attached. 8. The assessee craves permission to elucidate, add, amend, modify, delete any ground or grounds of appeal before the disposal in the interest of substantial justice.

3.1 It was noted that an advance of Rs.5,00,000/- was paid initially, while the balance amount of Rs.69,70,000/- was agreed to be paid in demonetized currency notes of Rs.500 and Rs.1,000 denominations. The matter surfaced during a property dispute between the parties before the Court of Judicial Magistrate, Ludhiana, wherein it was observed that Rs.60,00,000/- had been paid by the assessee in old currency notes.

3.2 Based on the above information, reassessment proceedings were initiated under section 147, and notice under section 148 was issued on 07.04.2022. The Assessing Officer recorded that no return of income was filed;

3 however, the assessee contended that he had filed his return on 29.08.2018 declaring total income of Rs.3,66,530/-.

3.3 During the course of reassessment proceedings, several notices under section 142(1), along with reminders and a final show-cause notice dated 07.03.2024, were issued requiring the assessee to explain the source of cash amounting to Rs.69,70,000/- utilized in the said property transaction. Despite providing adequate opportunities, the assessee failed to furnish any explanation or supporting documentary evidence.

3.4 Accordingly, the Assessing Officer completed the assessment ex-parte under section 144 read with sections 147 and 144B of the Act. It was held that the assessee failed to discharge the onus of explaining the nature and source of the cash. Consequently, the amount of Rs.69,70,000/- was treated as unexplained money under section 69A and added to the total income. Further, penalty proceedings under section 271AAC(1) were initiated for misreporting of income.

4.1 Relying on established legal precedents, including the Supreme Court's ruling in CIT vs. BN Bhattachargee (which emphasizes that an appeal must be effectively pursued) and the Delhi Tribunal's decision in CIT vs. Multiplan India Pvt. Ltd., the Ld. CIT(A) concluded that the assessee was not interested in prosecuting the appeal. The Ld. CIT(A) observed that in the absence of any cogent material, documentary evidence, or submissions to support the

4 claims made in Form 35, the allegations remained entirely unverified. Finding no reason or material on record to warrant an interference with the assessment order, the Ld. CIT(A) upheld the addition of Rs.69,70,000/- under section 69A and dismissed the appeal.

4.2 At the outset, the Ld. AR submitted that the impugned appellate order passed by the Ld. CIT(A), NFAC deserves to be set aside as the appeal has been dismissed merely for non-prosecution without adjudicating the grounds raised by the assessee on merits. It was contended that the assessee had, in fact, filed his return of income for Assessment Year 2018-19 on 29.08.2018 vide Acknowledgement No. 207373280290818 and, therefore, the observation of the Assessing Officer that no return was filed is factually incorrect. The learned AR further submitted that the assessee possesses relevant documentary evidence, including the copy of the FIR, affidavits, declarations and documents relating to the property transaction, which could not be placed before the authorities below as the notices issued by the NFAC were never received. It was further argued that the Chartered Accountant representing the assessee has also filed an affidavit affirming that no e-mail communication from the NFAC was received on behalf of the assessee. It was, therefore, prayed that in the interest of substantial justice, the matter may be restored to the file of the Ld. CIT(A) for adjudication afresh after granting an effective opportunity of hearing.

5 submissions. A perusal of the impugned appellate order reveals that the Ld. CIT(A) has dismissed the appeal substantially on account of non-compliance on the part of the assessee and has not adjudicated the grounds of appeal on their respective merits. The assessee has specifically pleaded before us that the notices issued by the NFAC were never received and has also placed reliance upon an affidavit of the Chartered Accountant stating that no e-mail communication was received. The assessee has further contended that relevant documentary evidence supporting his claim, including the return of income allegedly filed on 29.08.2018, FIR, affidavits, declarations and other documents relating to the impugned property transaction, could not be produced before the appellate authority.

6.1 It is well settled that the first appellate authority is vested with quasi- judicial powers and is under a statutory obligation to dispose of the appeal by passing a reasoned order after examining the grounds raised and the material placed on record. Even where the appellant fails to appear, the appeal cannot ordinarily be dismissed in limine for non-prosecution without deciding the issues on merits. The provisions of section 250 of the Act require the Commissioner (Appeals) to adjudicate the appeal by passing a speaking order dealing with each ground raised before him.

6.2 Considering the totality of the facts and circumstances of the case, particularly the plea regarding non-receipt of notices and the availability of documentary evidence which the assessee proposes to produce, we are of the considered opinion that the ends of substantial justice would be met if one more effective opportunity is granted to the assessee.

6.3 Accordingly, 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, in accordance with law, after affording adequate and effective opportunity of hearing to the assessee. The assessee is also directed to extend full cooperation and furnish all documentary evidence, including the return of income, affidavits, FIR, declarations, proof regarding the source of funds and all other relevant documents, in support of his claim. The Ld. CIT(A)

6 shall thereafter pass a reasoned and speaking order dealing with each of the grounds raised by the assessee.

6.4 Since we are restoring the matter to the file of the Ld. CIT(A), we refrain from expressing any opinion on the merits of the addition of Rs.69,70,000/- made under section 69A of the Act, and all the issues are left open to be adjudicated by the appellate authority in accordance with law.

Order pronounced on 15/07/2026

Sd/- Sd/- मनोज कुमार अ�वाल लिलत कुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद�/ ACCOUNTANT MEMBER �ाियक सद� /JUDICIAL MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. आयकर आयु� (अपील)/ The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH