CHANDULAL NAVJIBHAI PATEL,NAVI MUMBAI vs. INCOME TAX OFFICER WARD 28(1)(1), MUMBAI , NAVI MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 8371/Mum/2025 (Assessment Year: 2013-14) Chandulal Navjibhai ITO Ward 28(1)(1), Patel IT Office, Vashi EAPMC Market, I Phase Vs. Railway Station II, Sanpada, SO, New Building, Navi Mumbai-400 705 Mumbai-400 703 PAN/GIR No. AGGPP6475J (Applicant) (Respondent) Assessee by Ms. Khushali Desai, Ld. AR Revenue by Shri Virabhadra Mahajan, Ld. DR Date of Hearing 21.05.2026 Date of Pronouncement 22.05.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the CIT(A)”] dated 28.10.2025 for Assessment Year 2013-14 arising out of the assessment order passed under section 147 r.w.s. 144 read with section 144B of the Income Tax

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Act, 1961 [hereinafter referred to as “the Act”] dated 30.03.2022 by the National Faceless Assessment Centre, Delhi.

3 ITA No. 8371/Mum/2025 Chandulal Navjibhai Patel amount of alleged unexplained expenditure, for reasons stated in the impugned order or otherwise. 8. The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing. 3. Brief facts of the case are that the assessee is an individual. The assessee had filed return of income for Assessment Year 2013-14 on 28.09.2013 declaring total income at Rs. 5,53,940/-. Subsequently, the case of the assessee was reopened under section 147 of the Act by issuance of notice under section 148 dated 31.03.2022 after obtaining approval under section 151 of the Act. As per the assessment order, information was received from the Insight Portal that the assessee had allegedly advanced cash loan of Rs. 60,00,000/- during Financial Year 2012-13 to one Shri Nilesh Bharani. 4. The Assessing Officer observed that during the course of search action under section 132 conducted in the case of M/s Evergreen Enterprises, statement of Shri Nilesh Bharani, one of the partners of M/s Evergreen Enterprises, was recorded under section 132(4) of the Act. According to the Assessing Officer, Shri Nilesh Bharani had allegedly admitted receipt of cash loans from various persons including the present assessee. The Assessing Officer therefore formed a belief that the assessee had not disclosed such alleged cash transaction in the return of income and accordingly income chargeable to tax had escaped assessment.

4 ITA No. 8371/Mum/2025 Chandulal Navjibhai Patel 5. The Assessing Officer further recorded that notices under section 142(1) dated 19.11.2021 and 20.01.2022 were issued to the assessee. Thereafter, show cause notice dated 10.03.2022 and final show cause notice dated 23.03.2022 were also issued. According to the Assessing Officer, no satisfactory response was received from the assessee and therefore assessment was completed ex parte under section 144 of the Act. The Assessing Officer treated the alleged cash loan of Rs. 60,00,000/- as unexplained expenditure under section 69C of the Act and added the same to the income of the assessee. Consequently, assessment was completed under section 147 r.w.s. 144 read with section 144B of the Act on 30.03.2022 determining total income at Rs. 65,53,940/-. 6. Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). During appellate proceedings, notices were issued by the learned CIT(A) on various dates fixing the matter for hearing. However, according to the learned CIT(A), the assessee failed to comply with the notices and no supporting material or written submissions were furnished. The learned CIT(A) therefore proceeded to dismiss the appeal ex parte observing that the assessee had failed to substantiate the grounds raised in appeal and had not diligently pursued the appellate proceedings. 7. During the course of hearing before us, the learned Authorised Representative (AR) submitted that the orders passed

5 ITA No. 8371/Mum/2025 Chandulal Navjibhai Patel by both the lower authorities are ex parte orders and the assessee was prevented by sufficient cause from effectively representing the matter. The learned AR drew our attention to the replies filed before the Assessing Officer during reassessment proceedings and submitted that contrary to the observations recorded in the assessment order, the assessee had in fact responded to notices issued under section 142(1) of the Act.The learned AR placed on record e-proceeding response acknowledgements evidencing filing of replies before the Assessing Officer. It was submitted that in response to notice under section 142(1) dated 19.11.2021, the assessee had electronically filed reply on 06.12.2021 stating that return of income had already been filed. Further, in response to subsequent notice under section 142(1) dated 20.01.2022, the assessee had specifically requested the Assessing Officer to provide reasons recorded for reopening of assessment. The learned AR submitted that despite such request, the reasons recorded for reopening were never supplied to the assessee. 8. The learned AR further submitted that detailed reply was also furnished before the Assessing Officer in response to show cause notice issued during reassessment proceedings. In the said reply, the assessee had categorically denied having advanced any cash loan to Shri Nilesh Bhamani and had contended that no corroborative evidence whatsoever was brought on record by the Revenue authorities except relying upon alleged statement of third party. The assessee had also requested for opportunity of cross-examination of Shri Nilesh Bhamani or any other person

6 ITA No. 8371/Mum/2025 Chandulal Navjibhai Patel whose statement was sought to be relied upon against the assessee. The learned AR therefore submitted that the matter deserves to be restored back either to the file of the Assessing Officer or to the learned CIT(A) for adjudication afresh after granting reasonable opportunity of hearing to the assessee. 9. The learned Departmental Representative (DR), on the other hand, relied upon the orders passed by the lower authorities and submitted that both the assessment order as well as appellate order were passed ex parte due to repeated non-compliance on the part of the assessee. It was submitted that despite several opportunities, the assessee failed to properly cooperate during assessment as well as appellate proceedings. However, the learned DR fairly submitted that in case the Bench is inclined to restore the matter back to the file of the learned CIT(A) in the interest of natural justice, the same may be done subject to levy of reasonable cost upon the assessee so as to ensure diligent participation in the set aside proceedings. 10. We have heard rival submissions and perused the material available on record. It is an undisputed fact that the assessment order passed under section 147 r.w.s. 144 read with section 144B of the Act as well as the appellate order passed by the learned CIT(A) are ex parte orders. At the same time, from the material placed before us by the learned Authorised Representative, it is evident that the assessee had electronically filed certain replies before the Assessing Officer during reassessment proceedings.

7 ITA No. 8371/Mum/2025 Chandulal Navjibhai Patel 11. The acknowledgements produced before us prima facie demonstrate that the assessee had requested the Assessing Officer to furnish reasons recorded for reopening of assessment. The assessee had also disputed the alleged transaction and sought cross-examination of the third party whose statement formed the basis of addition. 12. In our considered opinion, the issues raised by the assessee involve substantial questions relating to validity of reopening under section 147, applicability of section 153C, alleged violation of principles of natural justice and addition made under section 69C solely on the basis of third-party statement. These issues require proper examination on facts as well as in law after granting adequate opportunity to the assessee. The learned CIT(A), being the first appellate authority vested with co-terminus powers, ought to have adjudicated the issues raised before him on merits after considering the material available on record. However, the appeal has been dismissed ex parte without adjudicating the legal as well as factual grounds raised by the assessee. 13. At the same time, we also cannot lose sight of the fact that the assessee has not been diligent in prosecuting the matter before the lower authorities. Repeated non-compliances have resulted in passing of ex parte orders and unnecessary prolongation of litigation. Therefore, while considering it appropriate in the interest of substantial justice to restore the

8 ITA No. 8371/Mum/2025 Chandulal Navjibhai Patel matter back to the file of the learned CIT(A), we are also of the view that levy of reasonable cost would meet the ends of justice and act as deterrent against casual approach in future proceedings.\ 14. Accordingly, in the interest of justice and fair play, we set aside the impugned order passed by the learned CIT(A) and restore the entire matter back to his file for adjudication afresh in accordance with law after providing adequate opportunity of hearing to the assessee. The assessee is directed to diligently cooperate in the appellate proceedings and furnish all supporting evidences and submissions as may be called for by the learned CIT(A). We further direct the assessee to deposit cost of Rs. 5,000/- to the credit of the Income Tax Department within a period of thirty days from the date of receipt of this order and furnish proof of such payment before the learned CIT(A). Subject to the aforesaid direction, all grounds raised by the assessee are restored to the file of the learned CIT(A) for fresh adjudication and are treated as allowed for statistical purposes. 15. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 22.05.2026.

Sd/- Sd/- (KAVITHA RAJAGOPAL) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER

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Mumbai, Dated 22/05/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai