DINESH VINOD HARCHANDANI,THANE vs. INCOME TAX OFFICER, WARD 2(1), KALYAN, KALYAN

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ITA 3092/MUM/2026Status: DisposedITAT Mumbai11 June 2026AY 2020-215 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) dismissed the appeal without adjudicating on merits, and the assessee's reasons for non-prosecution were valid. Therefore, the Tribunal restored the matter to the CIT(A) for de novo adjudication.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-prosecution due to financial difficulties and health issues. The assessee had previously participated in assessment proceedings but could not present submissions before the CIT(A).

What were the issues?

Whether the CIT(A) erred in dismissing the appeal for non-prosecution without considering the merits, and whether the addition under Section 69A was justified.

Which sections of the Income-tax Act were involved?

Section 250(6),Section 69A,Section 115BBE,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLEVIKRAM SINGH YADAV & HON’BLE SIDDHARTHA NAUTIYAL

आदेश / ORDER

PERSIDDHARTHA NAUTIYAL, JUDICIAL MEMBER: This appeal is filed by the Assessee against the order of Ld. National Faceless Appeal Centre (NFAC), Delhi / Ld. CIT(A) dated 23-Jan-2026 for the Assessment Year 2020-21. The assessee has raised the following grounds of appeal:

1.

Invalid Order Passed by the Learned CIT(A) 1. Invalid Order Passed by the Learned CIT(A) The Learned Commissioner of Income Tax (Appeals) (CIT(A)) erred in law and on The Learned Commissioner of Income Tax (Appeals) (CIT(A)) erred in law and on The Learned Commissioner of Income Tax (Appeals) (CIT(A)) erred in law and on facts in passing the impugned order without properly appreciating the facts of the facts in passing the impugned order without properly appreciating the fa facts in passing the impugned order without properly appreciating the fa case and without granting appropriate relief to the appellant. case and without granting appropriate relief to the appellant. 2. Dismissal of Appeal for Non 2. Dismissal of Appeal for Non-Prosecution The Learned CIT(A) erred in dismissing the appeal for alleged non-prosecution The Learned CIT(A) erred in dismissing the appeal for alleged non The Learned CIT(A) erred in dismissing the appeal for alleged non instead of deciding the appeal on merits based on the materia instead of deciding the appeal on merits based on the material available on record. l available on record. 3. Violation of Section 250(6) 3. Violation of Section 250(6) The Learned CIT(A) erred in passing the impugned order in violation of the The Learned CIT(A) erred in passing the impugned order in violation of the The Learned CIT(A) erred in passing the impugned order in violation of the provisions of section 250(6) of the Income provisions of section 250(6) of the Income-tax Act by dismissing the appeal without tax Act by dismissing the appeal without adjudicating the grounds on merits and with adjudicating the grounds on merits and without stating the points for determination, out stating the points for determination, the decision thereon and the reasons for such decision. the decision thereon and the reasons for such decision. 4. Violation of Principles of Natural Justice 4. Violation of Principles of Natural Justice The Learned CIT(A) erred in passing the impugned order without granting adequate The Learned CIT(A) erred in passing the impugned order without granting adequate The Learned CIT(A) erred in passing the impugned order without granting adequate and. effective opportunity of b and. effective opportunity of being heard to the appellant, thereby violating the eing heard to the appellant, thereby violating the principles of natural justice. principles of natural justice. 5. Arbitrary Addition under Section 69A 5. Arbitrary Addition under Section 69A The Learned Assessing Officer erred in making and the Learned CIT(A) erred in The Learned Assessing Officer erred in making and the Learned CIT(A) erred in The Learned Assessing Officer erred in making and the Learned CIT(A) erred in confirming the addition of ₹84,42,525 as unexplained money under section 69A of the confirming the addition of ey under section 69A of the Income-tax Act without properly appreciating the facts, explanations and evidences tax Act without properly appreciating the facts, explanations and evidences tax Act without properly appreciating the facts, explanations and evidences submitted by the appellant. submitted by the appellant. 6. Failure to Appreciate Explanation of Bank Deposits 6. Failure to Appreciate Explanation of Bank Deposits The Learned Assessing Officer as well as the Learned CIT(A) fai The Learned Assessing Officer as well as the Learned CIT(A) failed to appreciate that led to appreciate that the bank deposits represented amounts received from relatives, friends and third the bank deposits represented amounts received from relatives, friends and third the bank deposits represented amounts received from relatives, friends and third parties which were reimbursements of payments made by the appellant on their behalf parties which were reimbursements of payments made by the appellant on their behalf parties which were reimbursements of payments made by the appellant on their behalf through credit cards. 7: Addition Based on Presumptions 7: Addition Based on Presumptions The Learned Assessing Officer erred in making, and the Learned CIT(A) further erred Assessing Officer erred in making, and the Learned CIT(A) further erred Assessing Officer erred in making, and the Learned CIT(A) further erred in confirming, the addition merely on the basis of suspicion, conjectures and in confirming, the addition merely on the basis of suspicion, conjectures and in confirming, the addition merely on the basis of suspicion, conjectures and assumptions without conducting proper inquiry or bringing any corroborative assumptions without conducting proper inquiry or bringing any corroborative assumptions without conducting proper inquiry or bringing any corroborative material on record. 8. Incorrect Application of Section 115BBE ct Application of Section 115BBE The Learned Assessing Officer erred in invoking the provisions of section 115BBE and The Learned Assessing Officer erred in invoking the provisions of section 115BBE and The Learned Assessing Officer erred in invoking the provisions of section 115BBE and the Learned CIT(A) further erred in confirming without establishing that the deposits the Learned CIT(A) further erred in confirming without establishing that the deposits the Learned CIT(A) further erred in confirming without establishing that the deposits constituted unexplained income within the meaning of constituted unexplained income within the meaning of sections 68 to 69D of the Act. sections 68 to 69D of the Act. 9. Mechanical Confirmation of Addition 9. Mechanical Confirmation of Addition The Learned CIT(A) erred in mechanically confirming the additions without The Learned CIT(A) erred in mechanically confirming the additions without The Learned CIT(A) erred in mechanically confirming the additions without examining the evidences available on record and without exercising the appellate examining the evidences available on record and without exercising the appellate examining the evidences available on record and without exercising the appellate powers vested under sections 2 powers vested under sections 250 and 251 of the Income-tax Act. 10. Unjustified Initiation of Penalty Proceedings 10. Unjustified Initiation of Penalty Proceedings The Learned Assessing Officer erred in initiating, and the Learned CIT(A) further The Learned Assessing Officer erred in initiating, and the Learned CIT(A) further The Learned Assessing Officer erred in initiating, and the Learned CIT(A) further erred in confirming, the initiation of penalty proceedings under section 271AAC when erred in confirming, the initiation of penalty proceedings under section 271AAC when erred in confirming, the initiation of penalty proceedings under section 271AAC when the very basis of the addition made under section 69A is erroneous and unsustainable. ery basis of the addition made under section 69A is erroneous and unsustainable. ery basis of the addition made under section 69A is erroneous and unsustainable. 11. Wrongful Levy of Interest 11. Wrongful Levy of Interest The Léarned Assessing Officer erred in levying, and the Learned CIT(A) further erred The Léarned Assessing Officer erred in levying, and the Learned CIT(A) further erred The Léarned Assessing Officer erred in levying, and the Learned CIT(A) further erred in confirming, the levy of interest under sections 234A, 234 in confirming, the levy of interest under sections 234A, 234B and 234C, which is B and 234C, which is consequential in nature and not sustainable once the additions made are deleted. consequential in nature and not sustainable once the additions made are deleted. consequential in nature and not sustainable once the additions made are deleted. 12. General Ground The appellant craves leave to add, alter, amend or withdraw any of the above grounds The appellant craves leave to add, alter, amend or withdraw any of the above grounds The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at or before the time of hearing. of appeal at or before the time of hearing.

2.

The brief facts of the case are that the assessee, an individual, filed his The brief facts of the case are that the assessee, an individual, filed his The brief facts of the case are that the assessee, an individual, filed his return of income for A.Y. 2020 return of income for A.Y. 2020-21 declaring total income of Rs. 8,49,440/ 21 declaring total income of Rs. 8,49,440/-. Based on information received through the Insight Portal, the Assessing Officer Based on information received through the Insight Portal, the Assessing Officer Based on information received through the Insight Portal, the Assessing Officer noticed that the assessee had made cash deposits aggregating to Rs. 52,91,600/ e had made cash deposits aggregating to Rs. 52,91,600/- e had made cash deposits aggregating to Rs. 52,91,600/ in his bank accounts and had also entered into transactions relating to purchase in his bank accounts and had also entered into transactions relating to purchase in his bank accounts and had also entered into transactions relating to purchase of immovable properties amounting to Rs. 47,66,670/ of immovable properties amounting to Rs. 47,66,670/- and Rs. 89,51,478/ and Rs. 89,51,478/-. Accordingly, reassessment proceedings were in Accordingly, reassessment proceedings were initiated under section 147 of the itiated under section 147 of the Act. During the course of assessment proceedings, the assessee furnished certain Act. During the course of assessment proceedings, the assessee furnished certain Act. During the course of assessment proceedings, the assessee furnished certain details regarding the transactions reflecting rding the transactions reflecting in his bank accounts. However, the in his bank accounts. However, the Assessing Officer was not convinced with the information submitted by the Assessing Officer was not convinced with the information subm Assessing Officer was not convinced with the information subm assessee. The Assessing Officer observed that the tot assessee. The Assessing Officer observed that the total credits in the bank al credits in the bank accounts ( over and above the receipts disclosed by the assessee over and above the receipts disclosed by the assessee) amounted to over and above the receipts disclosed by the assessee Rs. 1,49,84,723/-. Out of the said amount, a sum of Rs. 65,39,198/ . Out of the said amount, a sum of Rs. 65,39,198/- was . Out of the said amount, a sum of Rs. 65,39,198/ accepted by the Assessing Officer, whereas the balance amount of Rs. ssessing Officer, whereas the balance amount of Rs. ssessing Officer, whereas the balance amount of Rs. 84,42,525/- was treated as unexplained money under section 69A of the Act and was treated as unexplained money under section 69A of the Act and was treated as unexplained money under section 69A of the Act and added to the total income of the assessee. added to the total income of the assessee.

3.

Aggrieved by the reassessment order, the assessee Aggrieved by the reassessment order, the assessee filed an appeal before an appeal before the CIT(Appeals). During the appellate proceedings, several notices under IT(Appeals). During the appellate proceedings, several notices under IT(Appeals). During the appellate proceedings, several notices under section 250 were issued by Ld. CIT(A) by Ld. CIT(A) fixing the appeal for hearing on different fixing the appeal for hearing on different dates. The CIT(Appeals) noted that despite repeated opportunities, the assessee dates. The CIT(Appeals) noted that despite repeated opportunities, the assessee dates. The CIT(Appeals) noted that despite repeated opportunities, the assessee neither filed any written submissions nor furnished any documentary evidence in submissions nor furnished any documentary evidence in submissions nor furnished any documentary evidence in support of the grounds raised in appeal. Though the assessee sought an support of the grounds raised in appeal. Though the assessee sought an support of the grounds raised in appeal. Though the assessee sought an adjournment on medical grounds, which was duly considered, no further adjournment on medical grounds, which was duly considered, no further adjournment on medical grounds, which was duly considered, no further submissions or evidence were filed thereafter. The CIT(Appeals) noted that submissions or evidence were filed thereafter. The CIT(Appeal submissions or evidence were filed thereafter. The CIT(Appeal hearing notices dated 11.07.2025, 22.09.2025, 08.10.2025, 22.10.2025, hearing notices dated 11.07.2025, 22.09.2025, 08.10.2025, 22.10.2025, hearing notices dated 11.07.2025, 22.09.2025, 08.10.2025, 22.10.2025, 18.11.2025 and 17.12.2025 were issued, but the assessee failed to pursue the 18.11.2025 and 17.12.2025 were issued, but the assessee failed to pursue the 18.11.2025 and 17.12.2025 were issued, but the assessee failed to pursue the appeal. The CIT(Appeals) therefore held that sufficient opportunities had been appeal. The CIT(Appeals) therefore held that sufficient opportunities had been appeal. The CIT(Appeals) therefore held that sufficient opportunities had been afforded to the assessee and that the assessee was not interested in pursuing the assessee and that the assessee was not interested in pursuing the assessee and that the assessee was not interested in pursuing the appeal. The CIT(Appeals) held that where an appellant fails to appear and fails appeal. The CIT(Appeals) held that where an appellant fails to appear and fails appeal. The CIT(Appeals) held that where an appellant fails to appear and fails to substantiate the grounds raised, the appeal can be decided on the basis of the to substantiate the grounds raised, the appeal can be decided on the basis of the to substantiate the grounds raised, the appeal can be decided on the basis of the material available on record material available on record. Since no material was brought on record to rebut . Since no material was brought on record to rebut the findings of the Assessing Officer the findings of the Assessing Officer,, the CIT(Appeals) upheld the addition of , the CIT(Appeals) upheld the addition of Rs. 84,42,525/- made under sectio made under section 69A and dismissed the appeal of the n 69A and dismissed the appeal of the assessee.

4.

The assessee is in appeal before us agai The assessee is in appeal before us against the order passed by nst the order passed by CIT(Appeals) dismissing the appeal of the assessee. CIT(Appeals) dismissing the appeal of the assessee.

5.

We have heard the rival contentions and perused the material on record. We have heard the rival contentions and perused the material on record. We have heard the rival contentions and perused the material on record. At the time of hearing, it was submitted that the assessee, being a salaried At the time of hearing, it was submitted that the assessee, being a salaried At the time of hearing, it was submitted that the assessee, being a salaried individual, could not purs individual, could not pursue the appellate proceedings before the CIT(Appeals) ue the appellate proceedings before the CIT(Appeals) due to financial difficulties, health due to financial difficulties, health-related issues and change of employment. It related issues and change of employment. It was further submitted that the assessee had participated in the assessment was further submitted that the assessee had participated in the assessment was further submitted that the assessee had participated in the assessment proceedings and had given proceedings and had given submissions regarding the impugned bank g the impugned bank transactions, but could not place the same before the CIT(Appeals). We find that transactions, but could not place the same before the CIT(Appeals). We find that transactions, but could not place the same before the CIT(Appeals). We find that the appeal before the CIT(Appeals the appeal before the CIT(Appeals) was dismissed for non-prosecution, since prosecution, since despite several opportunities, no submissions or evidences were filed by the despite several opportunities, no submissions or evidences were filed by the despite several opportunities, no submissions or evidences were filed by the assessee. Accordingly, the addition made by the Assessing Officer was sustained the addition made by the Assessing Officer was sustained the addition made by the Assessing Officer was sustained without examination of the issues on merits without examination of the issues on merits.

6.

Considering the facts and circumstances of the case, the nature of the Considering the facts and circumstances of the case, the nature of the Considering the facts and circumstances of the case, the nature of the addition involved, the explanation now offered by the assessee and the addition involved, the explanation now offered by the assessee and the addition involved, the explanation now offered by the assessee and the “undertaking” furnished before us that he shall fully cooperate in the appellate furnished before us that he shall fully cooperate in the appellate furnished before us that he shall fully cooperate in the appellate proceedings and shall not seek un proceedings and shall not seek unnecessary adjournments, we are of the necessary adjournments, we are of the considered view that one more opportunity deserves to be granted in the interest considered view that one more opportunity deserves to be granted in the interest considered view that one more opportunity deserves to be granted in the interest of substantial justice. Accordingly, we restore the matter to the file of of substantial justice. Accordingly, we restore the matter to the file of of substantial justice. Accordingly, we restore the matter to the file of CIT(Appeals) for de novo adjudication. The CIT(Appeals) shall afford CIT(Appeals) for de novo adjudication. The CIT(Appeals) shall a CIT(Appeals) for de novo adjudication. The CIT(Appeals) shall a reasonable opportunity of hearing to the assessee nity of hearing to the assessee and thereafter adjudicate the and thereafter adjudicate the appeal afresh on merits after considering the submissions and evidences that appeal afresh on merits after considering the submissions and evidences that appeal afresh on merits after considering the submissions and evidences that may be furnished by the assessee. The assessee shall extend full cooperation and may be furnished by the assessee. The assessee shall extend full cooperation and may be furnished by the assessee. The assessee shall extend full cooperation and promptly comply with all notices issued by the CIT(Appeals). In case there is ply with all notices issued by the CIT(Appeals). In case there is ply with all notices issued by the CIT(Appeals). In case there is any further omission on part of the assessee to pursue the appeal before any further omission on part of the assessee to pursue the appeal before any further omission on part of the assessee to pursue the appeal before CIT(Appeals), the CIT(Appeals) would be at liberty to pass appropriate orders CIT(Appeals), the CIT(Appeals) would be at liberty to pass appropriate orders CIT(Appeals), the CIT(Appeals) would be at liberty to pass appropriate orders on the basis of material available on r on the basis of material available on record, in accordance with law. ecord, in accordance with law.

7.

In the result, the appeal he appeal filed by the assessee is allowed for statistical allowed for statistical purposes.

Order pronounced in the open court on the open court on 11.06.2026

Sd/- Sd/- VIKRAM SINGH YADAV VIKRAM SINGH YADAV SIDDHARTHA NAUTIYAL SIDDHARTHA NAUTIYAL ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER Mumbai Dated: 11.06.2026.

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