MANISH KUMAR AGARWAL,KANPUR vs. DY CIT-2, KANPUR

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW “A” BENCH, LUCKNOW BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.792/Lkw/2026 A.Y. 2014-15 Manish Kumar Agarwal, vs. Dy.CIT-2, 49/63, Nayaganj, Kanpur, Kanpur, Uttar Pradesh-208001. Uttar Pradesh-208001. PAN: ABNPA5089P (Appellant) (Respondent) Assessee by: Shri Ashish Raj Shukla, Advocate Revenue by: Shri Sudhakar Shukla, DR Date of hearing: 09.09.2026 Date of pronouncement: 28.10.2026

O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A)/NFAC dated 09.03.2026, wherein the ld. CIT(A) has dismissed the appeal of the assessee filed against the order of the ld. AO under section 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) dated 26.05.2023. The grounds of appeal are as under: “1. BECAUSE the Id. Commissioner of Income tax (Appeals) has erred in law and facts in dismissing the appeal of the appellant without giving proper opportunity of being heard and is against principle of natural justice. 2. BECAUSE the ld. Commissioner of Income tax (Appeals) has erred in law and facts in dismissing the appeal ex parte without going into the merit of the case.

ITA No. 792/Lkw/2026 A.Y. 2014-15 Manish Kumar Agarwal 3. BECAUSE the ld. Commissioner of Income tax (Appeals) has erred in law and facts in confirming the addition of Rs.33,59,493/- made u/s 68 of the Act on the ground that the appellant has not furnished documentary evidence regarding sundry creditor M/s Srinath Ji Textiles without appreciating the fact that all the necessary documents were filed before Ld. Assessing Officer (A.O) at the time of assessment proceedings. 4. BECAUSE the ld. Commissioner of Income tax (Appeals) has erred in law and facts in upholding the addition which was made of the ground that the appellant has not provided PAN of M/s. Srinath ji Textiles without appreciating the fact that appellant had filed bank statement, books of accounts, confirmation letter and address to prove genuineness of the sundry creditor. 5. That appellant craves for leave of the court to addition or alteration of any ground of appeal subsequently.” 2. At the very outset, it is observed that the appeal is delayed by 40 days. The assessee has filed a condonation petition prepared by the counsel for the appellant, Shri Ashish Raj Shukla, Advocate, in which the counsel has submitted that the assessee had handed him documents for filing of the appeal against the impugned order in April 2026, but during the period of filing of appeal, his mother expired and since he was preoccupied with her last rites, rituals and family obligations associated with the demise of his mother, his professional work was disrupted during the period, which contributed to the delay in the filing of the appeal. Accordingly, it was prayed that since the delay was not deliberate and not on account of any negligence on the part of the assesse, the delay may kindly be condoned. The assessee has also filed an affidavit to this effect and prayed that the delay occurred due to genuine and unavoidable circumstances, therefore, it may be condoned. 3. We have duly considered the matter and considering the application filed by the counsel and the affidavit of the assessee, we condone the delay in the filing of the appeal and admit the same for adjudication.

ITA No. 792/Lkw/2026 A.Y. 2014-15 Manish Kumar Agarwal 4. The facts of the case are that the assessee filed return of income for the AY 2014-15 showing total income of Rs. 15,98,130/-. Regular assessment under section 143(3) of the Act was completed on 22.12.2016 determining the total income at Rs. 23,40,160/-. Subsequently on verification of the assessment records, it was observed that sundry creditors amounting to Rs. 1,14,77,852/- were unverified and unsecured loan of Rs. 20,00,000/- taken from a party were not disclosed in the books of account. Accordingly, a notice under section 148 was issued to the assessee but the assessee did not make compliance to the same by way of filing of a return. Subsequently the notices under section 142(1) of the Act were issued in response to which the assessee submitted certain information. The assessee submitted confirmation letters in respect of 21 of its creditors (out of 36) where large amounts were involved. It also submitted certain other documents such as bank account statement of Shipra International, audited financials, bank account with statement with S.B.I. for the AY 2013-14, copy of Form 26AS, ledger extracts of sundry creditors in the books of the assesse, confirmations from Sri Balaji Enterprises & Sri J.S. Textiles and details of the transactions with M/s Mahaveer Textile. However, the ld. AO noted that the assessee had failed to furnish the PAN and assessment particulars in case of one of the creditors namely M/s Srinath ji Textiles and from the same he came to the conclusion that the amounts credited in his books in the name of that concern were unexplained within the meaning of section 68 of the Act. Accordingly, he added this amount back to the income of the assessee. 5. Aggrieved with the said assessment order, the assessee filed an appeal with the ld. CIT(A) /NFAC. Before the ld. CIT(A) it was submitted that while making the disallowance, the ld. AO had failed to consider that the assessee had submitted a duly verified account statement of the parties with most

ITA No. 792/Lkw/2026 A.Y. 2014-15 Manish Kumar Agarwal transactions having been done through the banking channels. The ld. CIT(A) issued notices to the assessee to furnish further written statement along with the documentary evidences in support of its statement of facts and grounds of appeal but records the fact that the assessee did not make compliance to the same. From the same he concluded that the assessee did not wish to pursue the appeal. He noted the conduct of the assessee during the course of assessment proceedings in failing to furnish any information with regard to the transactions with M/s Srinath ji Textiles and held that the ld. AO had rightly invoked the provisions of section 68, in the case of the assessee. He held that the assessee had not discharged the onus to satisfactorily explain the credit even during the appeal and therefore he dismissed the appeal of the assessee. 6. The assessee is aggrieved at the dismissal of this appeal and has accordingly come before us. 7. Shri Ashish Raj Shukla, Advocate appearing on behalf of the assessee submitted that the ld. CIT(A) had not considered the appeal of the assessee with due seriousness. It had been submitted before the ld. CIT(A) that the notice under section 148 of the Act that had been issued by the ld. AO was illegal because it ignored the fact that an assessment under section 143(3) r.w.s. 263 of the Act had been completed in respect of the assessee. Accordingly, it was prayed that the matter was required to be decided on the legal issue before the onus could be cast upon the assessee to make compliance to the satisfaction of the ld. AO. Without prejudice to the above, it was submitted that the assessee had submitted a duly verified account statement of the parties and demonstrated that most transactions had been done with the said parties through banking channels. Despite this, the order of the ld. AO and the ld. CIT(A) had been passed in a mechanical manner.

ITA No. 792/Lkw/2026 A.Y. 2014-15 Manish Kumar Agarwal Accordingly, it was prayed that the matter may be restored back for deciding the legal issue and for considering the facts of the assessee’s case. 8. On the other hand, Shri Sudhakar Shukla, ld. DR submitted that the assessee had not been able to furnish any evidence with regard to dealing with the said creditor to demonstrate that they were genuine trade creditors. Accordingly, the lower authorities were justified in making the addition. 9. We have duly considered the facts and circumstances of the case. It is observed that the ld. CIT(A) has neither adjudicated on the legal issue nor recorded a finding that the legal grounds had not been pressed before him. We further note that he has ignored to consider the statement of the assessee that fully verified statement had been furnished with respect to the transactions entered into with M/s M/s Srinath ji Textiles and that all transactions with the said assessee had taken place through banking channel. In the circumstances, we deem it appropriate to restore this matter to the file of the ld. CIT(A) so that the ld. CIT(A) may consider the issues raised in the grounds of appeal and decide them by way of speaking order. Accordingly, the matter stands restored to the file of the ld. CIT(A) for obtaining the arguments of the assessee in support of its grounds of appeal and thereafter pass such orders as he may deem appropriate in accordance with law. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 28.10.2026 in the open Court.

Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28/10/2026 SK, Sr. PS

ITA No. 792/Lkw/2026 A.Y. 2014-15 Manish Kumar Agarwal