AKSHAYA MERCHANTS FINANCE,BANGALORE vs. INCOME TAX OFFICER WARD 4(3)(2), BANGALORE

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)/NFAC dated 17.12.2025 vide DIN & Order No. ITBA/NFAC/S/250/2025-26/1083761980(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2020-21.

ITA No.494/Bang/2026 Akshaya Merchants Finance, Bengaluru Page 2 of 4 Sl. Ground Tax Effect No. 1 The Order of the Authorities below, in so far as these are against the assessee, is opposed to law, weight of the evidence, probabilities, facts and circumstances of the Appellant’s case. 2 As regards treating Rs.5,58,04,965/- as unexplained Rs. 9,40,30,121/- money under section 69A of the Income Tax Act, 1961: 2.1 The learned assessing officer has erred in law by not serving the notice under section 148 of the income tax act, 1961, notices under section 142(1) and showcause notice were not served on appellant. 2.2 The learned commissioner of income tax (appeals) erred in law by treating the appellant’s legitimate requests for adjournment as abandonment of the appeal. The Appellant’s grounds showed there was a force-majeure reason (managing partners absconding) that prevented timely compliance. 2.3 The lower authorities failed to consider the fundamental context, wrongly treating these funds as “unexplained”. confirming the addition without appreciating the business model violates settled principles.

2.4 Without prejudice, the learned assessing officer erred in drawing adverse inference against the appellant without establishing proper service of statutory notices, especially when the assessment resulted in substantial additions based solely on third-party information and the Learned CIT(A) erred in confirming the reassessment without examining the issue of non-service of statutory notices, despite specific grounds having been raised before him. 3 The learned assessing officer has erred in law by not serving the showcause notice towards initiation of 148A proceedings and concluding the proceedings.

4 For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed, and the addition made by the Assessing Officer and sustained by the Commissioner of Income Tax (Appeals) be deleted in the interest of equity and justice.

ITA No.494/Bang/2026 Akshaya Merchants Finance, Bengaluru Page 3 of 4 3. Before us, both the parties fairly conceded that the assessee could not represent its case before both the authorities below. On perusal of the assessment order of AO passed on 17.03.2025, we observed that the Order was passed ex-parte u/s 147 r.w.s 144 of the Act by treating the entire credits in the bank a/c amounting to Rs.5,58,04,965/- as unexplained money u/s 69A of the Act. Further, on perusal of the order of ld. CIT(A)/NFAC, we also observed that the ld. CIT(A)/NFAC despite providing 4 numbers of opportunities of being heard, the assessee sought for adjournment and did not submit any information/documents and accordingly the ld. CIT(A)/NFAC decided the appeal based on the information available on record & dismissed the appeal of the assessee. This being so, in the interest of justice, equity and fair play and as requested by the ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of AO to decide afresh in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce/submit all the relevant documents/records /information to substantiate its claim or any other documents/records as may be required by the AO for the completion of assessment. We make it clear that in case of further default, the assessee shall not be entitled to any leniency. It is ordered accordingly.

Order pronounced in the open court on 24th Aug, 2026

Sd/- Sd/- (Waseem Ahmed) (Keshav Dubey) Accountant Member Judicial Member

Bangalore, Dated 24th Aug, 2026. VG/SPS

ITA No.494/Bang/2026 Akshaya Merchants Finance, Bengaluru Page 4 of 4

Copy to:

Asst. Registrar, ITAT, Bangalore.