MOHAMMAD AYOOB KHAN,SIDDHARTH NAGAR vs. INCOME TAX OFFICER, BASTI

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ITA 176/LKW/2026Status: DisposedITAT Lucknow28 April 2026AY 2018-194 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee should be granted an opportunity to explain the delay and present their case before the CIT(A). The impugned order of the CIT(A) was set aside, and the appeal was restored for fresh adjudication.

What were the facts?

The assessee did not file a return of income. The Assessing Officer (AO) re-opened the case after noting significant cash withdrawals from the assessee's bank account. The AO made an addition of Rs. 1,82,55,000/-. The assessee's appeal before the CIT(A) was dismissed on grounds of limitation.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal on limitation without providing an opportunity to explain the delay, and whether the assessment order was passed without proper jurisdiction and opportunity of being heard.

Which sections of the Income-tax Act were involved?

Section 249,Section 148A,Section 148,Section 69A,Section 271AAC,Section 272A

AI-generated summary — verify with the full judgment below

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

Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA

आयकर अपीलीय अधिकरण ‘ब’ न्यायपीठ, लखनऊ। IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW श्री कुल भारत, उपाध्यक्ष एवं श्री अनादि नाथ मिश्रा, लेखा सिस्य के सिछ BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER आयकर अपील सं/ ITA No.176/LKW/2026 ननिाारण वर्ा/ Assessment Year: 2018-19 Mohammad Ayoob Khan v. Income Tax Officer Kishan Traders, Itwa, Siddharth Jail Road, Near Civil Line, Nagar, Uttar Pradesh-272192. Company Bagh, Niranjanpur, Basti, Uttar Pradesh-272001. PAN:CDYPK6281N अपीलाथी/(Appellant) प्रत्यथी/(Respondent) अपीलाथी कक और से/Appellant by: Shri P. K. Kapoor, CA प्रत्यथी कक और से /Respondent by: Shri R.R.N. Shukla, Addl. CIT(DR) सुनवाई कक तारीख / Date of hearing: 22 04 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)/National Faceless Appeal Centre (NFAC), Delhi dated 05.12.2025 pertaining to the assessment year 2018-19. The assessee has raised the following grounds of appeal: -

“1. BECAUSE the dismissal of appeal by the Id. "CIT(A)" as non- maintainable on the ground of delay in filing is erroneous and unsustainable in law as the appeal was filed within the time prescribed under sub-section (2) of section 249 of the Act, i.e. within 30 days from the date of service of the assessment order/notice of demand. 2. BECAUSE, without prejudice to the ground no. 1 above, the Id. "CIT(A)" was not justified in dismissing the appeal in limine under the misconception that there was delay in filing appeal, without providing opportunity of hearing to the appellant, thereby violating the principles of natural justice. WITHOUT PREJUDICE TO THE AFORESAID

ITA No.697/LKW/2025 Page 2 of 4 3. BECAUSE the order passed u/s 148A(d) and the notice issued u/s 148 of the Act by the Jurisdictional Assessing Officer were in violation of the provisions of the Act and in contravention of the procedure prescribed and schemes made thereunder, consequently, the assessment order passed in pursuance thereof is without jurisdiction, bad in law and liable to be quashed. 4. BECAUSE the assessment order was passed ex-parte, without affording due opportunity of being heard to the assessee, consequently the matter deserves to be set aside and restored to the Id. Assessing Officer for fresh adjudication after providing reasonable opportunity of being heard to the appellant. WITHOUT FURTHER PREJUDICE TO THE AFORESAID 5. BECAUSE the Id. Assessing Officer erred in making addition of Rs. 1,82,55,000/- u/s 69A of the Act by treating cash withdrawals as unexplained money, despite the fact that the withdrawals were made from disclosed bank accounts and were utilized for purchase of food grains from farmers in regular course of business, as duly evidenced by material available and placed on record, consequently, the Id. "CIT(A)" ought to have directed to delete the said addition. 6. BECAUSE the initiation of penalty proceedings under sections 271AAC(1) and 272A(1)(d) of the Act are bad in law and unwarranted on the facts and circumstances of the case. 7. BECAUSE the order appealed against is contrary to facts, law and principles of natural justice. 8. BECAUSE each ground taken in appeal is mutually exclusive and without prejudice to each other. 9. The "appellant" craves leave, to add, delete or modify any of the grounds before hearing of appeal.” 2. Briefly stated facts are that in this case, the assessee is an individual and it’s noted by the Assessing Officer (“AO”, for short) that the assessee has not filed return of income. It was further noted that the assessee had made cash withdrawals amounting to Rs. 1,82,55,000/- from a current account maintained with State Bank of India during the financial year 2017–18. Accordingly, the case of the assessee was re-opened and a notice u/s 148 of the Income Tax Act, 1961 (“Act”, for short) dated 29.03.2022 was issued to the assessee. However, there was no compliance on behalf of the assessee. Thereafter, several opportunities were provided; however, there was neither compliance of the notices, nor was any representation made on behalf of the assessee. Therefore, the AO made an addition of

ITA No.697/LKW/2025 Page 3 of 4 Rs.1,82,55,000/- and assessed income at Rs.1,85,02,243/-. Aggrieved by this, the assessee preferred appeal before the Ld. CIT(A), who dismissed the appeal on account of limitation. Now the assessee is in appeal before this Tribunal.

3.

At the outset, the Ld. Counsel for the assessee, Shri P. K. Kapoor, C.A., submitted that the Ld. CIT(A) has grossly erred in dismissing the appeal. He further submitted that, as per the findings of the Assessing Officer, there were no unexplained deposits in the bank account. Further, he contended that the observations regarding cash deposits are factually incorrect. He further contended that if a proper opportunity is granted, the assessee would satisfactorily explain the source of the amount in question.

4.

On the other hand, the Ld. Departmental Representative (DR) opposed the submission and supported the orders of the lower authorities. He further submitted that the assessee was provided adequate opportunity of being heard by the Assessing Officer and had filed the appeal belatedly. Therefore, the Ld. CIT(A) was justified in dismissing the appeal on the ground of delay, particularly when the assessee grossly failed to demonstrate sufficient cause for such delay.

5.

We have heard the rival submissions and perused the material available on records. It is seen from the record that the appeal of the assessee was dismissed purely on the ground of limitation. It is the case of the assessee that the adequate opportunity was not afforded by the First Appellate Authority to explain the cause of delay. Ld. Counsel further contended that, in fact, there was no delay in filing the appeal before the First Appellate Authority. Considering the submissions of the parties, we are of the considered view that the assessee should be granted an opportunity to explain and represent his case

ITA No.697/LKW/2025 Page 4 of 4 effectively before the First Appellate Authority in the interest of substantive justice. We, therefore, set aside the impugned order and restore the grounds before the Ld. CIT(A) who would decide the appeal afresh after making or causing verification of correctness of the claim of the assessee. Grounds raised in this appeal are allowed for statistical purposes. 6. 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/- [अनादि नाथ मिश्रा] [कुल भारत] [ANADEE NATH MISSHRA] [KUL BHARAT] लेखा सिस्य/ACCOUNTANT MEMBER उपाध्यक्ष/VICE PRESIDENT DATED: 28/04/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File

//True Copy//

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