ABHAY KUMAR JAIN,INDORE vs. INCOME TAX OFFICER-3(2), INDORE

ITA 1031/IND/2025Status: DisposedITAT Indore30 September 2026AY 2017-1818 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the impugned order of the CIT(A) was liable to be set aside and remanded back to the CIT(A) for a fresh denovo adjudication. The Tribunal observed that out of five notices issued by the CIT(A) under section 250, only one notice was sent to the correct email address as per Form No. 35. The remaining notices were dispatched to different email addresses, which the assessee had not provided. This failure to send notices to the correct address constituted a violation of the principles of natural justice. The Tribunal also noted that the assessee's remaining grounds and the submissions of the Revenue required proper consideration. Therefore, the matter was remitted to the CIT(A) to pass a fresh order after providing the assessee with adequate opportunity to present all documents and papers, ensuring a correct and proper adjudication based on merits and material. The appeal was allowed for statistical purposes.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) for Assessment Year 2017-18. The assessee, Abhay Kumar Jain, was a non-filer. During demonetization, a cash deposit of Rs. 2,11,11,500/- was observed in the assessee's bank account. The Assessing Officer (AO) initiated assessment proceedings under section 144 of the Income Tax Act, 1961, after the assessee failed to comply with notices under section 142(1) and a summons under section 131. The assessee claimed the cash deposit belonged to individuals to whom he had executed a Power of Attorney for his petrol pump business. The AO rejected this claim, noting that the Power of Attorney stipulated that actions by the attorney would be deemed executed by the donor (assessee). The AO estimated the total income at Rs. 22,67,400/- by considering total purchases as total sales and estimating net profit at 1.5%. The assessee's appeal before the CIT(A) was dismissed.

What were the issues?

1. Whether the CIT(A) order is bad in law, illegal, and in violation of the principles of natural justice, thereby deserving to be set aside? (Question of law) Assessee's Contention: The assessee argued that the impugned order of the CIT(A) was bad in law and violated the principles of natural justice. The primary ground was that out of five opportunity letters issued by the CIT(A), only one notice dated 06.11.2024 was received by the assessee at the correct email address provided in Form No. 35. The other notices were sent to different, incorrect email addresses. The assessee also submitted that additional documents were available to explain the correct calculation of sales and net profit, which could be presented to the AO afresh if the Tribunal deemed fit. The assessee was not pressing any other grounds except for the violation of natural justice. Revenue's Contention: The Revenue supported the orders of the lower authorities. It was contended that the assessee had not submitted any audit, balance sheet, or P/L account. The AO's assessment order was considered reasonable, with a 1.5% profit margin being standard for the industry. The Revenue also argued that additional evidence was filed in a disorganized manner without a proper paper book, and the orders of the lower authorities were judicious.

Which sections of the Income-tax Act were involved?

Section 253,Section 250,Section 144,Section 142(1),Section 131,Section 133(6),Section 246A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI PARESH M. JOSHI & SHRI ARVIND SONI

Hearing: 24.09.2026Pronounced: 30.09.2026

Per Paresh M. Joshi, JM:

This is an Appeal filed by the Revenue under section 253 of the Income tax Act 1961,[ herein after referred to as the Act

for the sake of brevity] before this tribunal. The Revenue is aggrieved by the order bearing No:-ITBA/APL /S/250/2025-

26/1081227873 (1) dated 26.09.2025 passed by the Ld.

CIT(A) u/s 250 of the Act which is hereinafter referred as the “Impugned Order”. The Relevant Assessment Year is 2017-

Abhay Kumar Jain ITA No. 1031/Ind/2025 AY-2017-2018 2018 and the corresponding Previous Period is from 01/04/2016 to 31/03/2017. 2. FACTUAL MATRIX

2.

1 That as and by way of an Assessment Order made u/s 144 of the Act, the total Income of the Assessee was computed

The order continues below.

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