PREM PRAKASH AGRAWAL,AGRA vs. ACIT, CIR 1(1)(1), AGRA

ITA 245/AGR/2026Status: DisposedITAT Agra07 October 2026AY 2017-188 pages
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What were the facts?

The assessee, Prem Prakash Agrawal, is in appeal against the order dated 10.03.2026 passed by the CIT(A) for Assessment Year 2017-18. The Assessing Officer (AO) completed the assessment under Section 143(3) on 27.11.2019, making an addition of Rs. 1,22,00,000/- on account of cash deposits, invoking Section 68 read with Section 115BBE of the Income Tax Act, 1961. Subsequently, the AO passed a rectification order under Section 154 on 27.12.2019, maintaining the addition and initiating penalty proceedings under Section 271AAC(1) instead of Section 270A. The assessee filed two appeals: one against the original assessment order (Appeal No. CIT(Appeals)-1, Agra/10346/2019-20) and another against the rectification order (Appeal No. CIT(Appeals)-1, Agra/10433/2019-20). The CIT(A) dismissed the first appeal based on the assessee's request to consider it null and void, conditional on merging it with the second appeal. The CIT(A) then dismissed the second appeal, holding that the rectification order did not contain a mistake apparent from the record.

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeals without adjudicating the issues on merits. The CIT(A) dismissed the first appeal (No. CIT(Appeals)-1, Agra/10346/2019-20) based on the assessee's request to consider it null and void, but this was conditional on merging it with the second appeal (No. CIT(Appeals)-1, Agra/10433/2019-20). The CIT(A) failed to effect this merger and then dismissed the second appeal on the grounds that the rectification order under Section 154 did not contain a mistake apparent from the record. The Tribunal found this approach to be contrary to equity and justice. Therefore, the Tribunal set aside the CIT(A)'s order dated 10.03.2026 in appeal No. CIT(Appeals)-1, Agra/10433/2019-20 and restored the matter to the CIT(A)'s file. The CIT(A) is directed to decide the appeal on merits concerning the addition of Rs. 1,22,00,000/- on account of cash deposits, after providing a reasonable opportunity of being heard to the assessee. Grounds 1 to 3 of the appeal were allowed. Ground 4 became academic. Ground 5, concerning the merits of the addition, was allowed for statistical purposes.

What were the issues?

1. Whether the learned CIT(A) erred in law and on facts by dismissing the appeal without adjudicating the grounds raised by the appellant on merits, thereby violating Section 250(6) of the Income-tax Act, 1961? 2. Whether the learned CIT(A) erred in law by dismissing the appeal on the ground that the issue raised did not fall within the scope of Section 154, without appreciating that the appeal was against the addition made in the order passed under Section 154 and the appellate authority was required to examine the correctness and legality of such addition? 3. Whether the learned CIT(A) erred in dismissing the appeal, leaving the appellant without an effective appellate remedy? Assessee's contentions: The assessee argued that the CIT(A) failed to adjudicate the appeal on merits, violating Section 250(6). The assessee contended that the appeal was against the addition made in the order passed under Section 154, and the CIT(A) should have examined the legality of the addition, not just the scope of Section 154. The assessee also argued that the dismissal left them without an effective remedy. Furthermore, the assessee argued that the AO's change of penalty provision in the Section 154 order was a substantive change, not a mistake apparent from the record, rendering the order bad in law. Finally, the assessee argued that the addition of Rs. 1,22,00,000/- under Section 68 read with Section 115BBE was arbitrary and based on conjectures. Revenue's contentions: The judgment records no specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 143(3),Section 154,Section 250,Section 270A,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA(DB

Before: SUNIL KUMAR SINGHBRAJESH KUMAR SINGH

For Appellant: Shri Mahesh Agarwal, CA
For Respondent: Shri Anil Kumar, Sr. DR
Hearing: 23.07.2026Pronounced: 07.10.2026

PER: BRAJESH KUMAR SINGH, A.M.

This appeal is directed against the impugned order dated 10.03.2026 passed in appeal No. CIT(APPEALS)-1, AGRA/10433/2019-20 by the Commissioner of Income Tax (Appeals)/ ADDL/JCIT(A), Thiruvanantpuram (hereinafter referred to as “CIT(A)), u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2017-18. 2. In this case, the assessment was completed u/s. 143(3) of the Act on 27.11.2019, making an addition of Rs.1,22,00,000/- on account of cash deposits in the bank account of the assessee u/s. 68 r.w.s. 115BBE of the Act. The AO also initiated penalty proceeding u/s. 270A of the Act s

The order continues below.

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