ACIT, PAREL, MUMBAI vs. KAKK FAMILY PRIVATE TRUST, BANDRA(E)

PDF · subscribers
ITA 543/MUM/2026Status: DisposedITAT Mumbai21 September 20263 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee did not appear on any of the hearing dates and did not file any written submissions or corroborative details against the grounds raised by the Revenue. The Revenue contended that the CIT(A) deleted the addition without recording findings on the statutory conditions of Section 94(7) and relied on fresh material without remand, violating principles of natural justice and Rule 46A. The Tribunal found merit in the Revenue's submission that the order of the CIT(A) was passed in clear violation of the principles of natural justice due to the assessee's non-appearance and lack of response. Therefore, the Tribunal set aside the order of the CIT(A) and remanded the matter back to his file for fresh adjudication. The CIT(A) was directed to grant an adequate and reasonable opportunity of being heard to the Assessing Officer. The grounds of appeal were allowed for statistical purposes. No specific issue was left undecided, but the adjudication on merits was deferred.

What were the facts?

The appeal by the Revenue is against the order of the CIT(A), Mumbai, dated 10.11.2025, for Assessment Year 2016-17. The CIT(A) had deleted an addition of Rs. 2,28,84,323 made by the Assessing Officer (AO) under Section 94(7) of the Income-tax Act, 1961. The assessee, Kakk Family Private Trust, did not appear on multiple hearing dates before the ITAT, nor did it file any written submissions or corroborative details to counter the Revenue's grounds of appeal. The Revenue contended that the CIT(A) erred in deleting the addition without recording findings on the statutory conditions of Section 94(7) and by relying on fresh material without proper verification or remand to the AO, thus violating principles of natural justice and Rule 46A.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance/addition of Rs. 2,28,84,323 made u/s 94(7), without recording findings on the statutory conditions of section 94(7) and by applying an extraneous test of the assessee's "influence/control over dividend declaration"? The Revenue argued that the CIT(A) failed to examine the statutory conditions of Section 94(7). The assessee did not present any arguments. 2. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting relief by relying on a writ decision on reopening, without verifying parity of facts on the assessee's record and without adjudicating the addition on merits under section 94(7)? The Revenue contended that the CIT(A) relied on fresh material and a writ decision without verifying factual parity or merits. The assessee did not present any arguments. 3. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying upon fresh material/contentions at appellate stage without calling for remand/verification from the Assessing Officer, resulting in violation of Rule 46A? The Revenue argued that the CIT(A) admitted fresh material without following the procedure under Rule 46A. The assessee did not present any arguments. 4. Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition outright instead of directing verification of record-date linkage, transaction chronology and loss vis-à-vis exempt income, where the assessee had not utilised effective opportunity during assessment proceedings? The Revenue argued that the CIT(A) should have directed verification instead of outright deletion. The assessee did not present any arguments.

Which sections of the Income-tax Act were involved?

Section 94(7),Section 250

AI-generated summary — verify with the full judgment below

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “E” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.543/Mum/2026 (AY: 2016-17) ACIT vs. Kakk Family Private Trust R.N. 511 5th Floor Piramal Plot No. C-22, G Block C/O IL & FS Chambers Lal Baug Parel Mumbai- Trust Company Ltd BKC Bandra(E), 400012. Mumbai-400051. PAN/GIR No: AABTK1635J (Appellant) (Respondent) Assessee by None Revenue by Smt. Sujatha Iyyanger, Sr. DR Date of Hearing 21.09.2026 Date of Pronouncement 28.09.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the revenue emanates from the orders passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by Commissioner of

Income Tax, Appeals, Mumbai dated 10.11.2025 for the assessment year (AY)

2016-17.

2.

The grounds of appeal raised by the revenue are as under:

“1. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance/addition of Rs. 2,28,84,323 made u/s 94(7), without recording findings on the statutory conditions of section 94(7) and by applying an extraneous test of the assessee's "influence/control over dividend declaration".

2.

"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in granting relief by relying on a writ decision on reopening, without verifying parity of facts on the assessee's record and without adjudicating the addition on merits under section 94(7)."

ITA No.543/MUM/2026 Kakk Family Private Trust 3. "Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying upon fresh material/contentions at appellate stage without calling for remand/verification from the Assessing Officer, resulting in violation of Rule 46A."

4.

"Whether, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition outright instead of directing verification of record-date linkage, transaction chronology and loss vis-à-vis exempt income, where the assessee had not utilised effective opportunity during assessment proceedings."

5.

"The Appellant craves leave to add, amend, alter, vary and/or withdraw any of the above grounds of appeal, at any time before or at the time of hearing.” 3. The cases were fixed for hearing on multiple dates, i.e. 09.04.2026,

13.05.2026, 16.07.2026, 01.09.2026, 16.09.2026 and 21.09.2026. None appeared

on behalf of the assessee on any of the above dates nor any request for

adjournment was filed. The appellant has also not filed any written submission

and corroborative details against the grounds of appeal raised by the revenue.

Therefore, no useful purpose will be served in prolonging the litigation.

3.1 The revenue has raised various grounds contesting the deletion of the

addition made u/s 94(7) of the Act. The Ld. DR of revenue has submitted that the

deletion by the CIT(A) was without recording findings regarding fulfillment of the

conditions of section 94(7) of the Act. Further the CIT(A), allowed relief by relying

upon fresh material and contention during appellate stage without calling for

remand report from the AO. Thus, there was violation of Rule 46A of the IT Rules,

1962. The assessee has not filed any details to controvert the grounds of the

revenue. Therefore, it is apparent that the order was passed in clear violation of

ITA No.543/MUM/2026 Kakk Family Private Trust the principles of natural justice. Hence, we deem it proper to set aside the order

of CIT(A) and remand the matter back to his file for fresh adjudication after

granting adequate and reasonable opportunity of being heard to the Assessing

Officer. Accordingly, the grounds are allowed for statistical purpose.

4.

In the result appeal of the revenue is allowed for statistical purpose.

Order is pronounced on 28.09.2026.

Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER

*Aniket Chand; Sr. PS MUMBAI Date: 28.09.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File

By Order

Assistant Registrar ITAT, MUMBAI

More judgments on Section 94(7)

All 130 judgments and leading authorities on Section 94(7) →

Recent GST High Court judgments

Search GST case law →