RAJESH CHAND MEHTA,ARVIND NAGAR vs. INCOME TAX OFFICER, JODHPUR

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ITA 493/JODH/2025Status: DisposedITAT Jodhpur27 April 2026AY 2011-20127 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay due to sufficient cause and restored the matter to the AO for a de novo assessment. The AO was directed to grant the assessee an adequate opportunity to present evidence and justify its claims, adhering to the principles of natural justice.

What were the facts?

The assessee filed appeals with a significant delay due to ill-health. The Assessing Officer (AO) passed an ex-parte assessment order, and the CIT(A) summarily dismissed the appeal without adequate consideration. The assessee claimed deposits were out of business sales and made through banking channels.

What were the issues?

Whether the ex-parte assessment order and summary dismissal by CIT(A) violated principles of natural justice. Whether the assessee was denied a proper opportunity to present its case regarding cash deposits.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

Before: DR. MITHA LAL MEENA, HON’BLE & SHRI SUDHIR PAREEK, HON’BLE

For Appellant: Shri P.M. Chopra Advocate
For Respondent: Shri Ghanshyam Meena- Addl, DR (Virtually)
Hearing: 09.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR

BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) Rajesh Chand Mehta Income Tax Officer, 5 Arihant Nagar Mahamandir Jodhpur Jodhpur, 342001, Rajasthan PAN No. AJOPM1782G Assessee by Shri P.M. Chopra Advocate, (Virtually) Revenue by Shri Ghanshyam Meena- Addl. CIT-DR (Virtually) Date of Hearing 09.04.2026. Date of Pronouncement 27.04.2026. ORDER DR. MITHA LAL MEENA, A.M.: These appeals are filed by assessee against the orders dated 09.04.2024 and 12.04.2024 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the NFAC/CIT(A)] with respect to the assessment years 2011-12 and 2012-13.

2.

There was a delay of 319 days in filing these appeals before the Tribunal. The appellant has explained the reason for delay with the support of the written application and the contents of the application are duly supported with an affidavit certified by registered notary,

2 ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) Government of India. It is submitted by the appellant assessee that he was suffering from ill-health related issues and was undergoing medical treatment. Due to his medical condition, appellant was unable to look into tax related affairs and the impugned order passed exparte which did not come into his knowledge till December 2024. The appellant has filed a copy of the medical documents in support of the ill-health as Annexure-B.

3.

On becoming aware of the passing of the impugned order the appellant took the professional advice from his Chartered Accountant/ Advocate and filed the appeal. Thus, the period of delay has been explained as beyond the appellant’s control. In support he placed reliance on the judgment delivered by Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnang and Anr. Vs. Mst Katiji and Ors. (1987) 2 SCC 107 wherein the Hon’ble Supreme Court has observed that refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. He further relies on the principle laid down by Apex Court in the case of N. Balkrishnan Vs. M. Krishnamurthy (1998) 7 SCC 123, wherein, a delay of 883 days was condoned by observing as follows:-

3 ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) "13. It must be remembered in every case of delay there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fide or it is not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor:" He has further cited number of judgments of the High Court and Tribunals in support of the petition.

4.

The Ld. DR has no objection to the request of the assessee in the condonation of delay.

5.

Admittedly, the appellant assessee has been prevented by sufficient cause in filing the appeal on time before the Tribunal and the delay of 319 days in filing these appeals has been explained due to the ill-health of the assessee and contents of the application for condonation of delay has been substantiated with the support of the affidavit certified by a registered Notary Government of India. Accordingly, we find sufficient cause for the delay in filing these appeals and therefore, the delay of 319 days is condoned and these appeals are admitted on merits.

6.

At the outset the Ld. counsel for the appellant has submitted that the AO has passed the ex-parte order without granting an adequate opportunity of being heard to the assessee and added the entire amount

4 ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) disputed without taking the rebuttal/ explanation of the assessee on record. He further submitted that Ld. CIT(A) has rejected the appeal of the assessee summarily endorsing the finding of the AO by observing as under:-

4.4. Having regard to the facts of the case, material available on record and the relevant provisions of law in force for the year under consideration and the observations made above, it can be concluded that the AO has rightly made addition of Rs. 1,76,20,800/- as unexplained peak credit balance 30.03.2011 reflected in his bank account maintained with ICICI Bank bearing no.980005000101. This part of the addition is confirmed. However, I find merit in the argument of the appellant, that the peak balance on a particular date in a bank account has to be taken while computing income from business for a year applying peak credit method. Therefore, the other amount in determining peak credit has to be taken for computation of income, is the balance available on 30.03.2011 only. Accordingly, in Axis Bank bearing a/c no.910020047965791 peak balance for consideration is restricted to Rs.1,30,000/- only instead of Rs.3,00,000/-. The AO is directed to recompute the income accordingly after verifying the bank balance of Axis Bank bearing a/c no.910020047965791 as at 30.03.2011. The appeal is partly allowed. 7. The Ld. AR has submitted that the AO has passed the assessment order ex-parte qua the assessee by making high pitch assessment. The Ld. CIT(A) has dismissed the appeal without considering the

5 ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) contentions raised by the appellant in summarily manner without considering the binding judgments and precedents of the Tribunals on parity of facts and legal issues. The Ld. counsel further submitted that the assessee has maintained the proper books of account and regularly produced before the AO. The AR argued that the deposits are out of business sales and the transactions are recorded and that the transactions are made by way of banking channel through RTGS and NEFT which is indication of true business activity. The AR contended that mere cash deposits into the bank account does not represent undisclosed income unless it is established with the material documentary evidence that the cash deposit in the bank account of the assessee is out of the undisclosed income or business transactions of the assessee. The Ld. AR has requested that the assessee may be granted one more opportunity and the matter may be restored back to the file of the AO with the directions to pass De Novo assessment after allowing sufficient opportunity to the assessee in view of the principles of natural justice.

6 ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) 8. The Ld. DR has no objection to the request of the assessee in sending back the matter to the file of the AO in view of the principles of natural justice.

9.

We have heard both the sides, perused the material on record, impugned orders and the assessment order. Admittedly, the AO has passed the assessment order ex-parte qua the assessee. The Ld. CIT(A) has rejected the appeal of the assessee in summary manner without assigning valid reasons. In view of the principles of natural justice we considered it deem appropriate that the assessee may be granted one more opportunity of being heard to justify its claim with the help of supporting documentary evidences before the AO. We, therefore, direct the AO to pass De Novo assessment order after granting adequate opportunity of being heard to the assessee. The assessee is instructed to cooperate in the fresh assessment proceedings by way of making compliance to all the queries raised by the AO as regards to the cash deposits in his bank accounts and other alleged disputed transactions during the course of fresh assessment proceedings.

7 ITA No. 493 and 494/Jodh/2025 (Assessment Year 2011-12 and 2012-13) 10. Accordingly we restore both the matters involved in the captioned appeals back to the file of the AO to pass De Novo assessment orders in accordance with law. 11. In the result both the appeals of the assessee are allowed for statistical purposes.

Order pronounced on 27/04/2026 in the open court.

SD/- SD/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated : 27/04/2026. Pritesh Vaishnav PS TRUE COPY Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

BY ORDER,

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