NITIN KATHURIA,HISAR vs. DCIT CIRCLE, HISSAR, HISSAR

ITA 4147/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2017-1810 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessment order was ex-parte. The assessee argued that due to being in Dubai during the Covid-19 pandemic and a communication gap with his Chartered Accountant because of a criminal case against the CA, he could not furnish complete details before the AO and the CIT(A). The Tribunal acknowledged the assessee's justification for non-compliance. Considering that the assessee failed to discharge the burden under Section 68, Section 69A, and provide satisfactory explanations for low gross profit, the Tribunal found that ends of justice would be met by restoring the matter to the Assessing Officer (AO) for fresh adjudication. The assessee is directed to furnish necessary submissions and detailed material before the AO within 60 days of the order. The additions on account of unsecured loans, unexplained cash deposits, and low gross profit were not decided on merits but were set aside for fresh consideration by the AO. The Tribunal explicitly stated that the assessee failed to discharge the burden cast upon him under Section 68, Section 69A, and to substantiate reasons for the decline in gross profit.

What were the facts?

The assessee, Nitin Kathuria, filed an appeal against the order of the CIT(A)/NFAC, Delhi, dated March 18, 2026, which confirmed additions made in the assessment order dated December 9, 2019. The assessment year is 2017-18. The assessee's case was selected for scrutiny due to large cash deposits during demonetization and an abnormal increase in sales with decreased profitability. The assessee failed to comply with notices under sections 143(2) and 142(1) of the Income-tax Act, 1961, leading to an ex-parte assessment. The CIT(A) also dismissed the assessee's appeal, noting a lack of crucial documentary evidence, including unsigned ledger accounts and bank statements, to discharge the onus under section 68. The assessee claimed inability to furnish details due to being in Dubai during the Covid-19 pandemic and a communication gap with his Chartered Accountant due to a criminal case against the CA.

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs. 53,75,000/- under Section 68 of the Act, without properly appreciating the explanations and evidences furnished by the Appellant establishing the identity, genuineness, and creditworthiness of the creditors, and without granting a proper opportunity to substantiate the same? 2. Whether the CIT(A) erred in confirming the addition of Rs. 25,90,000/- under Section 69A of the Act, ignoring that the cash deposits were duly explained as being out of cash-in-hand and business receipts, and without properly appreciating the explanations and evidences? 3. Whether the CIT(A) erred in confirming the addition of Rs. 12,50,192/- on account of ‘Low Gross Profit’, without appreciating that the books of account were duly maintained and audited under Section 44AB, and without rejecting the books or pointing out specific defects? Assessee's Contentions: The assessment order was ex-parte. The assessee could not file complete details before the CIT(A) due to being in Dubai during Covid-19 and communication issues with the CA. The CIT(A) granted insufficient time (7 days) for filing replies. The assessee seeks an opportunity to contest the case before the AO. The cash deposits were explained by withdrawals from the account. The matter should be restored to the AO for a comprehensive examination. Revenue's Contentions: Seven days' time was sufficient. The file may be sent to the CIT(A) for fresh decision, not the AO.

Which sections of the Income-tax Act were involved?

Section 68,Section 69A,Section 143(2),Section 142(1),Section 250,Section 44AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI

Before: Sh. Ramit Kochar & Sh. Raj Kumar Chauhan

Hearing: 28.09.2026Pronounced: 30.09.2026

Per Raj Kumar Chauhan, Judicial Member:

The appeal of the assessee is directed against the order dated 18.03.2026 of ld. CIT(A)/NFAC, Delhi passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) wherein addition made in the assessment order dated 09.12.2019 were confirmed and appeal was dismissed.

2.

Facts in brief as called out from the orders of the authorities below are that the assessee has e-filed return of income for the concerned year on 31.10.2017 declaring income of Rs.18,83,560/-. The case was selected for scrutiny under CASS on the issue that “assessee has deposited large cash during the demonetization period and abnormal increase in 2 Nitin Kath

The order continues below.

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