SHRI KHATU SHYAM INFRA,JAIPUR vs. ITO, JAIPUR

Since the identical issues involved in both the appeals, therefore the same are disposed of by this common order.

Firstly, we are dealing ITA No. 67/JPR/2026 (AY 2020-21) as the lead case. Brief facts of the case are that the assessee is a firm engaged in executing the construction of a railway over-bridge as a sub- contractor. For the AY 2020-21, the assessee filed its original return of income on 31.01.2021 declaring total income of Rs. 8,59,230/-. A search and seizure operation was carried out on the Kotahwala Group on 03.08.2022 and consequent search/survey action was carried out at various business and residential premises of the Aashish Group to which the assessee belongs. Thereafter, notice u/s. 148 was issued on 31.03.2024 and assessee filed the original return of income on 18.05.2024. Based on the seized materials and a list of expenses, the assessee has incurred expenses of Rs. 55,43,092/- in cash for project SKS Infra during the year under consideration. The assessee was specifically asked to explain the unaccounted expenses made in cash and also the source thereof. The assessee filed its reply stating that all expenses incurred in cash are duly recorded in cash book of the assessee, thereby requested not to make any addition. The AO held that the assessee was not able to reconcile the complete cash expenses on day to day basis as per list prepared from the documents found during the search proceedings. Therefore, the AO taking into account the nature of business, volume of business and in absence of complete reconciliation, made 15% disallowance of the total cash transaction i.e. Rs. 8,31,464/- and added to the total income of the assessee.

Aggrieved against the reassessment order, the assessee filed the appeal before Ld. CIT(A) who passed an exparte order on the ground

Aggrieved against the appellate order, the Revenue is in appeal before us raising the following Grounds of Appeal:-

Ld. Counsel appearing for the assessee submitted that assessee could not appear before Ld. CIT(A) for the reason that communication of hearing notices as mentioned in Form No. 35 was sksinfrajaipur@gmail.com whereas the hearing notices were sent to artage@hotmail.com and copies of the screenshots are available at page no. 1 and 2 of the Paper Book. Thus, assessee could not appear before Ld. CIT(A) since the notices were sent to wrong email address. On merits of the case, Ld. Counsel submitted that assessee has furnished a comprehensive reconciliation of total expenditure of Rs. 55,43,092/- appearing in the impounded register. The entries contained in the daily site register stood reconciled either transaction

Per contra, Ld. DR appearing for the Revenue supported the orders passed by the lower authorities.

Heard the rival submissions and perused the materials available on record including the Written Submission and Paper Book filed by the assessee. It is undisputed fact that Ld. CIT(A) has granted opportunities of hearing dated 10.06.2025, 01.10.2025 and 12.11.2025 as the same were sent to wrong email address and for this reason, the assessee could not participate in the appellate proceedings which resulted in passing exparte appellate order. Therefore, in the interest of Principle of Natural Justice, we deem it fit to set aside the matter back to the file of Ld. CIT(A) with a direction to give one more opportunity of hearing to the assessee by sending the notice to the email as mentioned in Form No. 35 and then pass fresh order on merits of the case.

Resultantly, the appeal filed by the assessee is hereby allowed for statistical purposes.

Since there is no change in the facts except change in figure of addition, therefore the decision rendered in ITA No. 67/JPR/2026 is squarely applicable in this present appeal.

In the combined result, both the appeals filed by the assessee are allowed for statistical purposes.