PRAMOD SURESH DALAL,TITWALA vs. INCOME TAX OFFICER WARD 3(2) KALYAN, KALYAN

आदेश / ORDER

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal has been preferred by the Assessee against the order dated 31.01.2026, impugned herein, passed by the Ld. Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre, Delhi, in short (‘Ld. CIT(A)’) u/s 250 of the Income-tax Act, 1961 (in short ‘the Act’) for the Assessment Year 2017-18.

ITA 2824/Mum/2026 Pramod Suresh Dalal Assessment Year 2017-18 2. The brief facts of the case are that information was received by the Income-tax Department that the assessee had deposited Specified Bank Notes (SBNs) in his bank account during the demonetisation period. As the assessee had not filed the return of income for the relevant assessment year under section 139(1) of the Act, the Assessing Officer issued a notice under section 142(1) of the Act calling upon the assessee to furnish the return of income. Since no return of income was filed and there was no compliance with the notices issued, the Assessing Officer proceeded to examine the bank accounts of the assessee. 3. On verification, the Assessing Officer noticed that the assessee had deposited a sum of Rs.11,39,500/- in Specified Bank Notes during the demonetisation period. The Assessing Officer also noticed cash deposits aggregating to Rs.3,18,90,976/- during the Financial Year 2016–17, excluding the demonetisation deposits. As the assessee failed to respond to the show cause notices issued by the Assessing Officer, the cash deposits of Rs.11,39,500/- were treated as unexplained money under section 69A of the Act. The balance cash deposits of Rs.3,18,90,976/- were treated as business receipts and income was estimated thereon by applying a profit rate of 8%, resulting in an addition of Rs.25,51,278/-. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The appellate authority also issued several notices; however, as there was no compliance, the appeal was disposed of ex parte by confirming the additions made by the Assessing Officer. 5. During the course of hearing before us, the learned Authorised Representative (‘Ld. AR’) submitted that neither the notices issued by the Assessing Officer nor those issued by the Ld. CIT(A) were ever served upon the assessee. It was contended that, for want of service of the statutory notices, the assessee was prevented by sufficient cause from participating in the assessment as well as the appellate proceedings. The Ld.AR further submitted that the assessee is in possession of complete

ITA 2824/Mum/2026 Pramod Suresh Dalal Assessment Year 2017-18 documentary evidence explaining the nature and source of the deposits and, if one effective opportunity is granted, the assessee would fully cooperate in the proceedings. The learned Departmental Representative (‘Ld. DR’) relied upon the orders of the authorities below. 6. We have carefully considered the rival submissions and perused the material available on record. It is an admitted position that both the assessment order and the appellate order have been passed ex parte on account of non-compliance by the assessee. The specific plea raised before us is that the statutory notices were not received by the assessee, resulting in his inability to participate in the proceedings. There is nothing on record before us to conclusively establish that the assessee had deliberately avoided the proceedings or had intentionally chosen not to respond to the notices. 7. It is a settled principle of law that no person should be condemned unheard. The right to a reasonable opportunity of being heard is an integral facet of the principles of natural justice. Since the additions have been sustained without the benefit of the assessee's explanation and supporting evidence, we are of the considered view that, in the interest of justice, one more opportunity deserves to be granted to the assessee to substantiate his case before the Assessing Officer 8. Accordingly, we set aside the orders of the Ld. CIT(A) as well as the assessment order and restore the entire matter to the file of the Assessing Officer for de novo adjudication. The Assessing Officer shall afford the assessee a reasonable and effective opportunity of being heard, consider all documentary evidence and explanations that may be furnished, and thereafter pass a speaking order in accordance with law. 9. The assessee is also directed to extend full cooperation in the assessment proceedings and to furnish all information and evidence called for by the Assessing Officer without seeking unnecessary adjournments. In the event of failure on the part of the assessee to cooperate, the

ITA 2824/Mum/2026 Pramod Suresh Dalal Assessment Year 2017-18 Assessing Officer shall be at liberty to proceed in accordance with law on the basis of the material available on record. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 23 September, 2026.

Sd/- Sd/- SAKTIJIT DEY GIRISH AGRAWAL VICE PRESIDENT ACCOUNTANT MEMBER

Mumbai, Dated: 23.09.2026 Aditi Pandare, PS

Copy to: The Appellant The Respondent The PCIT / CIT (Judicial); The DR, ITAT; and Guard file. //True Copy// By Order

Dy/Asstt. Registrar, ITAT, Mumbai