VARUN GUPTA,DELHI vs. INCOME TAX OFFICER, WARD 59(3), NEW DELHI, DELHI

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ITA 761/DEL/2026Status: DisposedITAT Delhi20 May 2026AY 2020-216 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) order was passed without an effective hearing and violated the principle of natural justice. Therefore, the order was set aside to allow the assessee a fresh opportunity to present their case.

What were the facts?

The Assessing Officer made an addition of Rs. 1,00,00,000/- as unexplained investment based on information from a search in the case of M/s Omaxe Ltd. The assessee claimed transactions were through banking channels and denied cash payments. The CIT(A) dismissed the appeal ex-parte for non-response to notices.

What were the issues?

Whether the CIT(A) order passed ex-parte without affording an effective opportunity of hearing violates the principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 69,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHIBENCH ‘A’, NEW DELHI

Before: Sh. Raj Kumar Chauhan & Sh. Manish Agarwal

Hearing: 18.05.2026Pronounced: 20.05.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘A’, NEW DELHI Before Sh. Raj Kumar Chauhan, Judicial Member & Sh. Manish Agarwal, Accountant Member ITA No. 761/Del/2026 :Asstt. Year: 2020-21 Varun Gupta, Vs Income Tax Officer, 30, Sukh Vihar, Near Gagan Vihar, Ward-59(3), New Delhi-110092 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AIWPG8561E Assessee by: Sh. Lakshay Gupta, CA Revenue by: Sh. Jitender Singh, CIT-DR Date of Hearing: 18.05.2026 Date of Pronouncement: 20.05.2026 ORDER Per Raj Kumar Chauhan, Judicial Member: The appeal is directed against the order dated 03.11.2025 of Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (hereinafter referred to as the “CIT(A)/NFAC”), passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein the addition made u/s 69 of the Act, vide assessment order dated 26.03.2025 was confirmed.

2.

The facts of the case are that the assessee filed his return of income for A.Y. 2020-21 declaring total income of Rs.8,32,220/-. Subsequently, the assessment was reopened u/s 147 of the Act pursuant to notice issued u/s 148 dated 27.03.2024 on the basis of information received from the

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Investigation Wing regarding alleged unexplained cash transactions with M/s Omaxe Ltd. The reopening was based on a search conducted u/s 132 in the case of Omaxe Group on 14.03.2022, wherein a hard disk seized from the premises of Omaxe Group allegedly contained excel sheets reflecting unaccounted cash transactions with customers. As per the information gathered, the assessee was alleged to have made unexplained cash payments aggregating to Rs. 1,00,00,000/- to M/s Omaxe Ltd. in relation to Chandigarh Plotted Colony-II and Investment Project-Palwal during F.Y. 2019-20 relevant to A.Y. 2020-21. During the reassessment proceedings, notices u/s 142(1) and 143(2) were issued and the assessee furnished replies from time to time. The assessee submitted that the transactions relating to Chandigarh Plotted Colony-II were through banking channels and denied having made any cash payments to M/s Omaxe Ltd. The assessee also furnished confirmation letters issued by Omaxe Ltd. regarding transfer/adjustment of earlier booked units. However, the Assessing Officer relied upon the data found in the seized hard disk, statements recorded during search proceedings in the case of Omaxe Group, and the investigation report to conclude that the assessee had made cash payments amounting to Rs. 1,00,00,000/- for purchase of immovable properties in the projects of Omaxe Ltd. at Chandigarh and Palwal. Accordingly,

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the Assessing Officer treated the amount of Rs. 1,00,00,000/- as unexplained investment u/s 69 of the Income Tax Act and added the same to the income of the assessee.

3.

Aggrieved by the assessment order, assessee filed appeal before the ld. CIT(A) which was dismissed ex-pate on the ground that the appellant has failed to respond to the various notices sent as find mentioned in paragraph 7.1 of the impugned order.

4.

Aggrieved by the impugned appellate ex-parte order, the assesse is in appeal before us and has raised the following grounds of appeal: “1. For that in view of the facts and in the circumstances, Ld. CIT(A) erred in passing the ex-parte order and in view of the facts and in the circumstances the impugned appeal may kindly be set aside for re- adjudication and it may be held accordingly. 2. Without prejudice to Ground No. 1 above, Ld. CIT(A) has erred in affirming the validity of the impugned order passed by AO u/s 153C/ 143(3) and in view of the facts and in the circumstances it may be held accordingly. 3. Without prejudice to Grounds No. 1 & 2 above, Ld. CIT(A) erred in not appreciating the fact that the alleged satisfaction so recorded in the case of Alankit Group and allied person without satisfying the requirement of sec. 153C in that respect and such satisfaction is mechanical and as such the impugned proceedings and the consequent order are bad in law and it may be held accordingly. 4. Without prejudice to Grounds No. 1 to 3 above, Ld. CIT(A) was wholly unjustified in affirming the addition of Rs. 1,49,000/- u/s 69A and in view of the facts and in the circumstances such addition is liable to be deleted

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and it may be held accordingly. 5. Without prejudice to Grounds No. 1 to 4 above, Ld. CIT(A) was wholly unjustified in affirming the addition of Rs. 30,00,000/- u/s 68 and in view of the facts and in the circumstances such addition is liable to be deleted and it may be held accordingly. 6. Without prejudice to Grounds No. 1 to 5 above, Ld. CIT(A) was wholly unjustified in affirming the addition of Rs. 3 5,00,000/- u/s 69A and in view of the facts and in the circumstances such addition is liable to be deleted and it may be held accordingly. 7. Without prejudice to Grounds No. 1 to 6 above, Ld. CIT(A) was wholly unjustified in affirming the addition of Rs. 30,11,670/- u/s 69A and in view of the facts and in the circumstances such addition is liable to be deleted and it may be held accordingly. 8. Without prejudice to Grounds No. 1 to 7 above, Ld. CIT(A) was wholly unjustified in affirming the addition of Rs. 2,89,820/- u/s 69A and in view of the facts and in the circumstances such addition is liable to be deleted and it may be held accordingly. 9. Without prejudice to Grounds No. 1 to 8 above, the impugned additions have been made merely based on the alleged statement of person of Alankit Group and the alleged incriminating documents without even providing the same to the appellant or without even allowing cross- examination of such person / documents and as such the consequent additions are in violation of natural justice and hence the additions so made in such respect is bad in law and it may be held accordingly. 10. Without prejudice to the aforesaid, the impugned order u/s 153C and consequent order, the approval so obtained u/s 153D is mechanical and does not satisfy the requirement of sec. 153D and in view of the facts and in the circumstances the consequent order u/s 153C is bad in law and it may be held accordingly. 11. For that in view of the facts and in the circumstances, Ld. CIT(A) was wholly unjustified in charging interest u/s 234A, 234B, 234C & 234D respectively and such action of Ld. CIT(A) is bad and illegal and it may be held accordingly.”

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5.

We have heard the learned AR and the learned DR. The Ld. AR would submit that the impugned order has resulted into miscarriage of justice as principle of natural justice has not been followed because no effective opportunity of hearing was given as the assessee had never received the notice after 15.09.2025 when adjournment was sought and therefore the matter may be restored to the file of the Ld. CIT(A) for deciding afresh. Learned DR on the other hand while supporting the judgment of the learned CIT(A) has left to the discretion of the court to consider the submissions of the assessee as per law.

6.

We have considered the rival submission and examined the record, Section 250(2)(a) lays down as under:

“250(2) The following shall have the right to be heard at the hearing of the appeal- (a) the appellant, either in person or by an authorized representative;” 7. 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.

8.

In view of the above facts and circumstances, it is evident that the impugned order has been passed without effective

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hearing and principle of natural justice has not been followed For these reasons, the impugned order is not maintainable and accordingly set aside. The end of justice shall be met in case the matter is restored to the file of the Ld. CIT(A) for deciding the issue afresh by affording an effective opportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Ld. CIT(A) within the period of 60 days of this order.

9.

In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 20/05/2026. Sd/- Sd/- (Manish Agarwal) (Raj Kumar Chauhan) Accountant Member Judicial Member Dated: 20/05/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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