ANKUSH ARAGWAL,LUCKNOW vs. ASSTT. COMMISSIONER OF INCOME TAX-1, LUCKNOW

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ITA 16/LKW/2026Status: DisposedITAT Lucknow28 April 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) passed an ex parte order without affording proper opportunity to the assessee. Therefore, the order was set aside, and the assessment was restored to the Assessing Officer for fresh consideration.

What were the facts?

During a survey, no books of account were found, and an inventory of stock was prepared. The assessee later filed a return declaring a lower income. The Assessing Officer treated the stock as unexplained and made a significant addition.

What were the issues?

Whether the CIT(A) order was passed ex parte without proper opportunity, and whether the additions made under Section 69 were justified without considering the assessee's explanations and surrendered amounts.

Which sections of the Income-tax Act were involved?

Section 133A,Section 69,Section 115BBE,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW

Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY

आयकर अपीलीय अधिकरण ‘बी’ न्यायपीठ, लखनऊ। IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW श्री कुल भारत, उपाध्यक्ष एवं श्री ननखखल चौिरी, लेखा सदस्य के समछ BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER आयकर अपील सं/ ITA No.16/LKW/2026 ननिाारण वर्ा/ Assessment Year: 2017-18 Ankush Agarwal v. ACIT-1 A-1/4, Vivek Khand, Gomti Pratyaksh Kar Bhawan, Nagar, Lucknow-226010. Ram Tirth Marg, Lucknow-226001. PAN:AEIPA9668N अपीलार्थी/(Appellant) प्रत्यर्थी/(Respondent) अपीलार्थी कक और से/Appellant by: Shri Saurav Gupta, C.A. प्रत्यर्थी कक और से /Respondent by: Shri R. R. N. Shukla, Addl. CIT(DR) सुनवाई कक तारीख / Date of hearing: 12 03 2026 घोर्णा कक तारीख/ Date of 28 04 2026 pronouncement:

O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)-3, Lucknow dated 28.10.2025 pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: - “1. That on the facts and circumstances of the case, the Order u/s 250 passed by the learned Commissioner of Income Tax, (Appeals), Lucknow-3 was passed ex-parte without affording proper opportunity to the appellant, which is against the principles of natural justice and therefore, the same is void ab- initio and bad in law. 2. That the Ld Commissioner of Income Tax, (Appeals), Lucknow-3 failed to appreciate the material available on record and the statement of facts filed by the appellant and has passed the order ex-parte. 3. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has erred in law and on facts and circumstances of the case in

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confirming the addition made by the Ld Assessing Officer amounting to Rs 2,25,73,852/-, invoking the provisions of Section 69 of the Income Tax Act 1961. 4. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has erred in law and on facts and circumstances of the case in failing to appreciate that out of the total addition made by the Ld Assessing Officer, amount of Rs 7187011/- was with reference to gold items kept in Rehan Advances account in respect of business carried out by the wife of the appellant and was fully explainable with reference to the details of Rehan and evidences placed on record and hence does not tantamount to unexplained investment. 5. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has railed to appreciate that the Ld. Assessing Officer is not justified in adding a sum of Rs.1,53,73,467/- to the income of the appellant for the reason that the sum surrendered by the appellant during the course of the survey of Rs. 1.50 Crores was not added by the appellant in the return filed, which is incorrect, all the more once a surrender was made by the appellant which was not reiterated during the course of survey proceedings itself, the same should have been considered for the purposes of taking the weight/valuation of the stock on the date of the survey. 6. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has erred in law and on facts and circumstances of the case in failing to appreciate that the Ld. Assessing Officer is not justified in adding a sum of Rs.13,374/- on account of variation in silver items which was very meagre on the facts and circumstances of the case as well as in law. 7. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has erred in law and on facts and circumstances of the case in not appreciating the provisions of section 69 were not applicable in the case of the appellant since the stock found during the course of the survey stood reconciled with reference to the availability thereof as explained during the course of assessment proceedings and, therefore, the addition deserves to be deleted. 8. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has failed to appreciate that the Ld. Assessing Officer is not justified in levying tax under section 115BBE(l)(i) of the LT. Act, 1961 on the facts and circumstances of the case. 9. That the learned Commissioner of Income Tax, (Appeals), Lucknow-3 has failed to appreciate that the Ld. Assessing Officer is not justified in initiating penalty proceedings under section 271AAC of the LT. Act, 1961 on the facts and circumstances of the case. 10. That the appellant craves leave to add, alter, amend or withdraw any or all, the grounds of appeal on or before the hearing.” 2. The present appeal is barred by limitation for 07 days. The assessee has filed petition seeking condonation of delay in filing the present appeal. The Ld. Counsel for the assessee reiterated the submissions as made in the petition seeking condonation of delay and also the contents of the supporting affidavit. It is

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stated that the impugned order was communicated to the previous counsel, who was handling the case. Therefore, the assessee remained unaware of the impugned order which resulted in a short delay in filing the appeal. He further contended that the delay is neither deliberate nor intended to cause any prejudice to the Revenue. He placed reliance on the judgment of the Hon'ble Supreme Court rendered in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors 167 ITR 471 (SC).

3.

On the other hand, the Ld. Departmental Representative for the Revenue opposed the submissions and contended that the assessee ought to have filed the appeal within the prescribed time. It was further submitted that the facts of the case do not warrant for taking a liberal view in the matter.

4.

Heard the Ld. Representatives of the parties and perused the materials available on records. It is stated that the impugned order was communicated to the previous counsel, who was handling the case. Therefore, the assessee remained unaware of the impugned order which resulted to small delay in filing the appeal. The Assessing Officer has not rebutted this fact. We, therefore, respectfully following the judgment of the Hon'ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors 167 ITR 471 (SC) hereby condone the delay and admit the appeal for hearing on merits.

5.

The facts in brief are that in this case, a survey u/s 133A of the Income Tax Act, 1961 (“Act”, for short) was carried by the Income Tax Department. During the course of survey, it was observed that no books of account were available at the business premises, as the same were stated to be lying with the Chartered Accountant of the assessee. An inventory of stock was prepared,

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wherein the value of stock was determined at Rs. 9,25,74,851/-. Subsequently, the assessee filed his return of income through electronic mode on 31.10.2017, declaring a total income of Rs. 30,81,500/- for the A.Y. 2017–18. Thereafter, the case was selected for scrutiny. The Assessing Officer, treating the said stock as excess and unexplained, invoked the provisions of section 69 of the Act and made an addition of Rs. 9,25,74,851/- to the income of the assessee. Aggrieved by this, the assessee preferred an appeal before the Ld. CIT(A), before the Ld. CIT(A) there was no effective representation on behalf of the assessee. The Ld. CIT(A) proceeded to pass an ex parte order against the assessee. Now, the assessee is in appeal before this Tribunal.

6.

Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that the authorities below have not considered the facts in right perspective. He contended that the Ld. CIT(A) has passed ex parte order without affording proper opportunity in utter disregard to the principles of natural justice. It was further stated that the Assessing Authority failed to appreciate the facts that the gold items amounting to Rs.71,87,011/- was with reference to gold items kept in Rehan Advances account. It is contended that the Assessing Officer grossly failed to give set off of the amount surrendered during the course of survey. Thus, non-appreciation of these facts caused serious prejudice to the assessee.

7.

On the other hand, the Departmental Representative for Revenue opposed the submissions and submitted that the lower authorities have given sufficient opportunity to the assessee and the assessee ought to have submitted relevant explanation before the Assessing Officer. He contended that it is well settled that the tax-payers cannot be allowed to take advantage of his negligence.

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8.

Heard the Ld. Representatives of the parties and perused the materials available on records. We find that the Ld. CIT(A) has passed an ex parte order without adverting to the submissions of the assessee. It is the case of the assessee that the certain gold items were related to the Rehan Advances account and the surrendered amount of Rs.1.50 crore ought to have been considered for this purpose of taking the weight/valuation of stock on the date of survey. Considering the totality of the facts, we deem it fit and proper and to sub-serve the interest of principles of natural justice, we hereby set aside the impugned order and restore the assessment to the file of the Assessing Authority for framing it afresh. The assessee would cooperate and furnish all relevant evidence and explanations as called for by the Assessing Authority. The grounds raised in this appeal are allowed for statistical purposes. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 28/04/2026.

Sd/- Sd/- [ननखखल चौिरी] [कुल भारत] [NIKHIL CHOUDHARY] [KUL BHARAT] लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष/VICE PRESIDENT ददनांक/DATED: 28/04/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File

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