RAJESHKUMAR SHAH,NAVAGAM,UDHANA vs. INCOME TAX OFFICER, ADAJAN

ITA 283/SRT/2026Status: DisposedITAT Surat09 October 2026AY 2022-235 pages
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What were the facts?

The assessee, Rajeskhumar Shah, engaged in money transfer business, filed his return for AY 2022-23. His case was selected for scrutiny due to high-value cash deposits against low declared income. The Assessing Officer (AO) made additions for a lower commission rate than the preceding year and disallowed expenses due to lack of evidence. The AO also treated Rs. 2,49,000/- of cash receipts as unexplained under Section 68 read with Section 115BBE, despite the assessee providing customer details, Aadhaar, and PAN for some transactions. The AO accepted explanations for credit entries from the assessee's father. The assessment was completed under Section 143(3) r.w.s. 144B, determining total income at Rs. 7,45,766/-. The assessee appealed to the CIT(A), who partly allowed the appeal. The assessee is now appealing to the ITAT.

What did the Tribunal hold?

The Tribunal allowed Ground Nos. 2 (2.1, 2.2, 2.3 & 2.4), which pertains to the addition of Rs. 2,49,000/- as unexplained cash credit under Section 68. The Tribunal noted that the revenue did not dispute the assessee's money transfer activity. The assessee had explained that cash received from customers for money transfers was deposited and transferred, and the details, including genuineness and creditworthiness of parties, were provided to the CIT(A). Therefore, the Tribunal found that Section 68 was not rightly invoked and the addition confirmed by the CIT(A) did not sustain. Grounds related to the violation of natural justice (Ground No. 1) and rejection of additional evidence (Ground No. 3) were dismissed as the Tribunal adjudicated the issues on merit. The Tribunal did not explicitly mention whether the CIT(A) violated natural justice or erred in rejecting evidence, as these were not adjudicated on merit. The operative direction is to delete the addition of Rs. 2,49,000/-.

What were the issues?

1. Whether the addition of Rs. 2,49,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, is sustainable, considering the assessee's engagement in money transfer business and submission of customer details, Aadhaar, and PAN? - Assessee's contention: The addition is erroneous as the transactions were recorded in the books of accounts, the source was explained, and customer details, Aadhaar, and PAN were provided. Section 68 cannot be invoked when transactions are properly recorded and explained. - Revenue's contention: The assessee failed to establish the genuineness and creditworthiness of the parties and did not adequately explain the business module to the AO. The transactions remained unexplained. 2. Whether the CIT(A) erred in violating the principle of natural justice by passing an order without providing a proper opportunity of being heard, issuing a show cause notice, or granting a personal hearing through video conferencing as mandated under Section 144B? - Assessee's contention: The CIT(A) passed the order in violation of natural justice and should have provided proper opportunities for hearing and submitting evidence. - Revenue's contention: Not recorded in the judgment. 3. Whether the CIT(A) erred in refusing to consider PAN details submitted during appellate proceedings, holding that additional evidence cannot be considered without invoking Rule 46A and granting the AO an opportunity for verification? - Assessee's contention: The CIT(A) erred in refusing to consider the PAN details submitted during appeal and in holding that additional evidence cannot be considered without proper procedure. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 143(2),Section 142(1),Section 144B,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI

Pronounced: 09.10.2026

PER : SUCHITRA KAMBLE, J M:

The appeal filed by the assessee is against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short “CIT(A)”] dated 05.12.2025 for the Assessment Year (in short “AY”) 2022-23. 2. The assessee has raised the following grounds of appeal:

“1. Violation of Principle of Natural Justice :-

1.1.

The Ld. CIT (Appeals) has erred in law as well as facts by sustaining the addition of Rs. 2,49,000/- as an unexplained cash credit u/s. 68 of Income Tax Act 1961. RAJESHKUMAR SHAH

1.2.

The

The order continues below.

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