BHARAT WADHWA,NEW DELHI vs. INCOME TAX OFFICER, WARD 45(1),, NEW DELHI

ITA 4470/DEL/2026Status: DisposedITAT Delhi09 October 2026AY 2017-187 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the appeal before the CIT(A) was not adjudicated on merits. While the CIT(A) had afforded several opportunities, the assessee failed to avail them and did not file submissions. However, the Tribunal noted that there was nothing on record to show that the notices sent to the assessee were duly served or received. Section 250(2)(a) mandates the right to be heard, which is a mandatory statutory requirement for natural justice. Therefore, the impugned order passed ex-parte without affording an effective opportunity of hearing is not sustainable. The Tribunal set aside the order and restored the matter to the file of the CIT(A) for fresh adjudication after affording an effective opportunity of hearing and considering the assessee's submissions. The assessee was directed to furnish necessary submissions within 60 days. The findings for ITA No. 4469/Del/2026 were to apply mutatis mutandis to ITA No. 4470/Del/2026. The ratio decidendi is that an appellate authority must ensure effective opportunity of hearing and compliance with principles of natural justice before passing an ex-parte order, and cannot dismiss an appeal for non-prosecution without adjudicating on merits.

What were the facts?

The assessee, Bharat Wadhwa, an individual and real estate developer, filed his return of income for Assessment Year (AY) 2016-17 declaring Rs.16,02,740/-. Reassessment proceedings under Section 147 were initiated based on information from the Insight Portal regarding a collaboration agreement for property development. The Assessing Officer (AO) referred the case to the DVO, who determined the fair market value of the second floor at Rs.1,27,99,700/-. The AO made an addition of Rs.55,42,750/- under Section 69C, treating the difference between the DVO's valuation and the assessee's considered cost as unexplained expenditure. The assessee's appeal before the CIT(A) was dismissed ex-parte for non-compliance, despite several opportunities. The assessee has appealed this dismissal to the ITAT for AY 2016-17 and AY 2017-18.

What were the issues?

1. Whether the CIT(A) erred in law and facts by dismissing the appeal in limine on the ground of non-prosecution without adjudicating the grounds on merits, contrary to Section 250(6) of the Income Tax Act, 1961, and established precedents like Ramgiri v. ITO and Taiki Hayashi v. ACIT, which mandate disposal on merits even ex-parte? 2. Whether the CIT(A) erred in failing to adjudicate the grounds raised by the assessee, including challenges to the addition on the foundation of reopening, validity of approval under Section 151, non-issuance of notice under Section 143(2), and rejection of books under Section 145(3) and arbitrary estimation of income? Assessee's Contentions: - The CIT(A) has no power to dismiss an appeal for non-prosecution and is obliged to dispose of it on merits, citing Ramgiri v. ITO, Taiki Hayashi v. ACIT, and CIT v. Premkumar Arjundas Luthra (HUF). - Even if the appeal proceeds ex-parte, the CIT(A) must examine grounds, formulate points, and provide reasoned findings on merits, as per Section 250(6). - The assumption of jurisdiction under Section 147/148A is vitiated by reliance on vague third-party material, contrary to PCIT v. Meenakshi Overseas Pvt. Ltd. and Sabh Infrastructure Ltd. v. ACIT. - Rejection of books under Section 145(3) is bad in law as no concrete falsity was identified, and mere inability to produce records after several years cannot justify rejection. - Estimation of income at 10% of revenue is arbitrary and unsupported by evidence. - Reassessment is liable to be quashed for non-compliance with Section 143(2) notice. - Sanction under Section 151, if unsigned or mechanical, invalidates jurisdiction. Revenue's Contentions: - The Revenue supported the orders of the lower authorities and left the matter to the discretion of the Tribunal.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 145(3),Section 147,Section 148A,Section 151,Section 250(2)(a),Section 250(6),Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI

Before: Sh. Ramit Kochar & Sh. Raj Kumar Chauhan

Hearing: 06.10.2026Pronounced: 09.10.2026

Heard together (2 matters)

ITA No. 4469/Del/2026
ITA No. 4470/Del/2026

Read from the judgment's own cause title. This page is filed under one of them.

Per Bench: These appeals of the assessee are directed against the orders, both dated 21.02.2026 of ld. CIT(A)/NFAC, Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) qua assessment orders dated 12.11.2024 and 26.03.2025, respectively wherein appeal has been dismissed ex-parte on the ground that despite several opportunities, the appellant has failed to comply with the notices issued from time to time.

2.

By this common order, we propose to decide the ITA Nos. 4469 & 4470/Del/2026 as the parties are same and factual matrix is also same and in order to avoid multiplicity of decision, the same are being disposed off acc

The order continues below.

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