AMIT GUPTA, PARTNER KUNDAL LAL & SONS JEWELERS,DELHI vs. CIT(A), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘F’, NEW DELHI Before Sh. Raj Kumar Chauhan, Judicial Member & Sh. Amitabh Shukla, Accountant Member ITA No. 8227/Del/2025 :Asstt. Year: 2017-18 Amit Gupta, Partner Vs Income Tax Officer, Kundan Lal & Sons Jewelers, Ward-35(2), 1-D, Kamla Nagar, New Delhi-110002 Delhi-110007 (APPELLANT) (RESPONDENT) PAN No. AADFK4318G Assessee by: None Revenue by: Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing: 20.04.2026 Date of Pronouncement: 20.04.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeal of the assessee is directed against the order dated 07.10.2025 passed by Ld. Principal Commissioner of Income Tax (Appeals)-31, New Delhi (hereinafter referred to as the “PCIT(A)”) passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein the addition made by the Assessment order dated 29.12.2019 on account of deposit of Rs.56,31,233/- during demonetization u/s 68 of the Act has been confirmed and penalty proceedings has been initiated.

2 ITA No. 8227/Del/2025 Amit Gupta 3. Facts in brief as culled out in the authorities below are that the assessee filed return of income declaring income of Rs.8,59,990/-. The case was selected for scrutiny under CASS by issuing notice u/s 143(2) dated 10.08.2018. Thereafter notice u/s 142(1) along with the questionnaire was issued. During the assessment proceedings, it has been noticed that the cash deposited during demonetization period between 09.11.2016 to 31.12.2016 does not commensurate with the cash deposits in previous year as well as cash deposited during Financial Year 2016-17. It was observed that the assessee has failed to prove the genuineness of the cash deposited during the demonetization period as he has failed to give any satisfactory explanation despite opportunity. The Assessing Officer therefore held the said amount of Rs.58,61,233/- as income from undisclosed sources by making addition of the said amount u/s 68 of the Act.

3 ITA No. 8227/Del/2025 Amit Gupta “I. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in passing the impugned order ex parte, without providing the Appellant a proper and effective opportunity of being heard, thereby violating the principles of natural justice. II. That the impugned order suffers from non- application of mind, inasmuch as the learned CIT(A) proceeded to decide the appeal on merits ex parte solely on the basis of the assessment order, without considering the submissions, documents or contentions of the Appellant. III. That the learned CIT(A) grossly erred in holding that multiple notices were issued and duly served upon the Appellant for the appearance. The Appellant categorically submits that no such notice of appearance was ever received. I V. That the learned CIT(A) failed to appreciate that valid service of notice is a condition precedent for exercising appellate jurisdiction, and in absence of proper, lawful, and effective service of notice, the ex parte order is vitiated and liable to be quashed. V. That, without prejudice, the learned CIT(A) erred in confirming the additions/disallowances made by the Assessing Officer without independent verification, contrary to the mandate of section 250(6) requiring a speaking and reasoned order. VI. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in impliedly confirming the order of the A.O. by making the addition of Rs. 58,61,233/-. VII. That on the facts and circumstances of the case, while confirming the addition made by the Ld. AO, the CIT (A) has not considered that there are plausible legal grounds based on the which the assessment order shall stands vitiated, without considering the same, only placing reliance on the assessment order, the addition has been sustained in a mechanical manner.” 6. We have heard the ld. DR as no one argued on behalf of the assessee and none appeared during the hearing. Ld. DR at the very outset submitted that there is no merit in the grounds raised as sufficient opportunity was granted but the assessee

4 ITA No. 8227/Del/2025 Amit Gupta has failed to avail and the impugned ex-parte order has been suffered deliberately by the assessee. Further, the ld. CIT(A) was constrained to upheld the Assessment Order in the absence of any submissions having been made by the assessee/appellant.

5 ITA No. 8227/Del/2025 Amit Gupta 9. Thus, the hearing mandated by Section 250(2)(a) of the Act is not a mere formality but a mandatory statutory requirement for following the principle of natural justice by the quasi-judicial authority.

6 ITA No. 8227/Del/2025 Amit Gupta by the AO, to my mind, is sustainable in law as well as on facts. I hold accordingly, Hence, the addition of Rs. 58,61,533/- made by the AO is hereby confirmed.” 11. On perusal of this extracted portion of the impugned order, it becomes apparent that the same is not a reasoned order and the provision of section 250(6) has not been followed by the ld. CIT(A) while passing the impugned order. For these reasons, i.e. for not following the principle of natural justice in the absence of effective hearing and not deciding the matter by a reasoned order has resulted into miscarriage of justice and the impugned order is not therefore sustainable and is accordingly set aside. The end of justice shall be met in case the matter is restored to the file of ld. CIT(A) by deciding afresh by giving effective opportunity of hearing to the assessee/appellant who shall present its case before the ld. CIT(A) within 60 days of this order.