INCOME TAX OFFICER, WARD-2, PANVEL, PANVEL vs. NITIN ANANDRAO SHITOLE, MAHAD

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1599/PUN/2025 िनधा�रण वष� / Assessment Year : 2018-19 ITO, Ward-2, Panvel. Vs. Nitin Anandrao Shitole, 202, Amadhav Complex, Shivaji Road, Mahad, Raigad- 402301. PAN : AHYPS4422M Appellant Respondent Revenue by : Shri Amol Khairnar Assessee by : Shri Satya Prakash Singh Date of hearing : 23.02.2026 Date of pronouncement : 27.04.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the Revenue is directed against the order dated 29.03.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19. 2. The Revenue has raised the following grounds of appeal :- “a. The Ld. CIT(A) erred in admitting the additional evidence (Service provider agreement with HPCL for the period from 01.04.2017 to 25.02.2018) without giving opportunity of being heard to Assessing Officer to meet with the additional material by way of cross examination and counter evidence. b. The Ld. CIT(A) erred in admitting the additional evidence (Service provider agreement with HPCL for the period from

2 ITA No.1599/PUN/2025 01.04.2017 to 25.02.2018) as the instant case do not fall under any criteria framed by the CBDT under rule 46A in the Income Tax Rule, 1962. c. The Ld. CIT(A) erred in deleting the addition of Rs.13,42,18,710/- on the basis of additional evidence admitted. d. The appellant craves to leave to add, alter, amend and modify any of the above grounds of appeal either before or at the time of hearing of the appeal, if considered necessary.” 3. Facts of the case, in brief, are that the assessee is an individual and has furnished his return of income for the year under consideration on 31.10.2018 by declaring an income of Rs.13,31,820/-. The case was selected for scrutiny to verify large cash deposits in bank account since as per the information available with the Department, the assessee has deposited cash of Rs.13,42,18,710/- in his bank account maintained with Union Bank of India, however had offered gross sales of Rs.1,71,74,938/- only in his trading & profit and loss account. Accordingly, statutory notices u/s 143(2) and 142(1) were respectively issued to the assessee. The assessee in response submitted that he is a contractor of HPCL as a service provider for HPCL owned Petrol Pump which is a Company Owned Company Operated (COCO) service provider- ship to operate company owned Petrol Pump in which all sales has to be deposited first in our current bank account and then transferred to HPCL. The Assessing Officer then issued a notice u/s 133(6) of

3 ITA No.1599/PUN/2025 the IT Act to HPCL to verify the contentions made by the assessee. However, HPCL not replied to the above notice. Accordingly, the Assessing Officer completed the assessment proceedings u/s 143(3) r.w.s. 144B of the IT Act and vide order dated 23.06.2021 passed the assessment order by determining income of Rs.13,55,50,530/- as against the income of Rs.13,31,820/- returned by the assessee. The above assessed income includes addition of Rs.13,42,18,710/- on account of unexplained cash credit u/s 68 of the IT Act. 4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC allowed the appeal filed by the assessee. 5. It is the above order against which the Revenue is in appeal before this Tribunal. 6. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee and copy of case law furnished by Ld. DR. In this regard, we find that Ld. CIT(A)/NFAC by relying on letter dated 12.09.2022 addressed to the appellant and issued by HPCL accepted the contention of the assessee that he is the COCO service provider for HPCL owned Petrol Pump and was in receipt of fixed monthly

4 ITA No.1599/PUN/2025 remuneration as well as sale based incentives from HPCL. We find that the assessment order was passed on 23.06.2021, therefore admittedly the above letter dated 12.09.2022 issued by HPCL, becomes an additional evidence which needs to be verified by the Assessing Officer as well. However, we find that Ld. CIT(A)/NFAC has not forwarded these additional evidences to the Assessing Officer for his remarks/comments. This is a clear cut violation of Rule 46A of the IT Rules, 1962 which make it mandatory for Ld. CIT(A)/NFAC to follow the provisions of Rule 46A of the IT Rule, 1962 prior to accepting any additional evidence which was not produced before the Assessing Officer during the course of original assessment proceedings. 7. In this regard, Ld. DR placed heavy reliance on the judgement of Hon’ble Kerala High Court in the case of CIT vs. E.D. Benny [2015] 62 taxmann.com 302 (Kerala) and submitted that as per Rule 46A of the IT Rules, 1962, each and every additional evidence should be sent to the Assessing Officer for his comment and since in the instant Ld. CIT(A)/NFAC has not followed procedure under Rule 46A of the IT Rules, 1962, the order passed by Ld. CIT(A)/NFAC is not justified and accordingly prayed to quash the order passed by Ld. CIT(A)/NFAC.

5 ITA No.1599/PUN/2025 8. Ld. AR appearing from the side of the assessee supported the order passed by Ld. CIT(A)/NFAC and requested to confirm the same on the ground that since last many years he is providing services to HPCL as COCO service provider. 9. With regard to judgement in the case of CIT vs. E.D. Benny (supra) relied on by Ld. DR, we find that Hon’ble Court allowed the appeal filed by the Revenue and held as under :- “Reading of the finding of the Tribunal would suggest that according to it, if additional documents are summoned by the Commissioner (Appeals) and produced or if the additional evidence produced by the assessee are in the nature of clinching evidence leaving no further room for any doubt or controversy, it is not necessary to give an opportunity to the Assessing Officer to contradict the same. In other words, the finding of the Tribunal would suggest that in cases where documents are summoned by the Commissioner (Appeals) and in cases where the documents produced are conclusive, the principles of natural justice are excluded. These findings of the Tribunal could not be enclosed. As held by Delhi High Court in CIT v. United Towers (I.) (P.) Ltd. [2008] 296 ITR 106/172 Taxman 267, rule 46A(4) of the Rules does not specifically exclude the principles of natural justice and, therefore, these principles are to be read into the Rules. Therefore, the finding of the Tribunal set aside. [Para 23]” 10. Respectfully following the above judgement passed in the case of CIT vs. E.D. Benny (supra), we find force in the above arguments of Ld. DR that Rule 46A has to be followed. Accordingly, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and restore the matter back to the file of Ld. CIT(A)/NFAC with a direction to decide the appeal afresh and as

6 ITA No.1599/PUN/2025 per fact & law after calling comments of the Assessing Officer with regard to the additional evidences filed by the assessee. Needless to say that Ld. CIT(A)/NFAC shall decide the appeal after providing reasonable opportunity of hearing to the assessee. Thus, the grounds of appeal raised by the Revenue are allowed for statistical purposes. 11. In the result, the appeal filed by the Revenue is allowed for statistical purposes. Order pronounced on this 27th day of April, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 27th April, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.04.28 12:26:05 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr.CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 4. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.