HARWINDER KUMAR,PUNJAB vs. ITO WARD 5(5), CHANDIGARH

ITA 416/CHANDI/2026Status: DisposedITAT Chandigarh05 October 2026AY 2011-123 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal accepted the assessee's prayer for an opportunity to present additional evidence, citing the principle of natural justice. The Tribunal set aside the impugned order of the CIT(A) and restored the matter to the file of the AO for a de-novo assessment. The assessee was directed to plead and prove its case before the AO. The reasoning was that granting another opportunity would allow the assessee to substantiate its case. The ratio decidendi is that in the interest of natural justice, an assessee should be given a fair chance to prove the source of unexplained cash credits, even if it involves presenting additional evidence at a later stage, provided the matter is remanded for a fresh assessment. The operative direction is to remand the matter to the AO for de-novo assessment.

What were the facts?

The assessee, Harwinder Kumar, is appealing an order from the Commissioner of Income Tax (Appeals), NFAC, dated January 29, 2026. This order confirmed an assessment framed by the Assessing Officer (AO) on March 19, 2015, under Section 143(3) of the Income Tax Act. The assessee is engaged in construction activities. The AO made an addition of Rs. 165.61 Lacs on account of cash deposits, invoking Section 69. The CIT(A) upheld this addition and refused to admit additional evidence submitted by the assessee under Rule 46A. The assessee is aggrieved by this decision and has filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the assessee should be granted an opportunity to present additional evidence to substantiate the source of cash deposits, as required by principles of natural justice, despite the CIT(A)'s refusal under Rule 46A? (Mixed question of law and fact, concerning Section 69 and Rule 46A). Assessee's Contention: The assessee argued that they are in a position to prove the source of the cash deposits and therefore should be allowed to present additional evidence before the AO. The assessee relied on the principle of natural justice. Revenue's Contention: The learned Senior Departmental Representative (Sr. DR) opposed the assessee's prayer for admission of additional evidence.

Which sections of the Income-tax Act were involved?

Section 69,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

RAJESH DAMODARLAL SHARMA (Judicial Member)

1.

Aforesaid appeal by assessee for Assessment Year (AY) 2011-12 arises out of order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 29.01.2026 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Act on 19.03.2015. The assessee is stated to be engaged in construction activities. In the assessment order, Ld. AO made addition of cash deposit for Rs.165.61 Lacs invoking the provisions

The order continues below.

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