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Facts
The assessee appealed against an ex-parte order by the Ld. CIT(A) which confirmed an addition of Rs. 4,78,800/- as unaccounted cash receipts. This addition was based on incriminating documents found during a search showing cash distribution among directors of M/s Dreamworks International Pvt. Ltd., including the assessee. The assessee contended that they were not given sufficient opportunity of hearing and denied the transaction, also requesting condonation of a 10-day delay in filing the appeal to the ITAT.
Held
The Tribunal condoned the 10-day delay in filing the appeal, accepting the Ld. AR's explanation of inadvertent misplacement of documents. Recognizing that the Ld. CIT(A) passed an ex-parte order without sufficient opportunity, the Tribunal set aside the Ld. CIT(A)'s order and remanded the matter back to the Jurisdictional Assessing Officer for fresh adjudication, with directions for the assessee to submit all required documents.
Key Issues
1. Whether the Ld. CIT(A) erred in passing an ex-parte order without providing sufficient opportunity of hearing. 2. The validity of the addition of Rs. 4,78,800/- as unaccounted cash receipts based on seized documents.
Sections Cited
143(3), 153B(1)(b)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’A” JAIPUR
Before: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;djvihyla-@ITA No. 767/JPR/2025 Shri Jitendra Sadhwani cuke
आयकरअपीलीय अधिकरण] जयपुरन्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’’A” JAIPUR JhjkBkSM+ deys'kt;UrHkkbZ] ys[kk lnL; ,oaJhujsUnzdqekj] U;kf;dlnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;djvihyla-@ITA No. 767/JPR/2025 fu/kZkj.ko"kZ@AssessmentYear : 2020-21 Shri Jitendra Sadhwani cuke The ACIT Vs. 20, Small Scale Industrial Area Central Circle Kota 324 007 Kota LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AQJPS 2734 A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Saurav Harsh, Advocate (Thru” V.C.) jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT (DR) lquokbZ dh rkjh[k@Date of Hearing : 12/08/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 12/08/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
This appeal filed by the assessee is directed against the order of the ld.CIT(A),Udaipur -2 dated 26-02-2025 for the assessment year 2020-21 in the matter of section 143(3) read with section 153B(1)(b) of the Act by raising the following grounds of appeal; ‘’1. That on the facts and in the circumstances of the case and in law the ld. CIT(A) without providing sufficient opportunity of hearing to the appellant to put forth merits of his case has passed an ex-parte order which is grossly against the principles of natural justice and thus on this ground only the order is liable to be deleted.
2 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA 2. That on the facts and in the circumstances of the case and in law the ld. CIT(A) grossly erred in confirming addition of Rs.4,78,000/- on account of unrecorded cash receipts made by the AO by relying upon dump document and grossly ignoring the submission made by the assesseappellant.’’ 2.1 At the outset of hearing of the appeal, the Bench noticed that there is delay of 10 days in filing the appeal for which the ld.AR of the assessee Shri Saurav Harsh filed an application dated 12-08-2025 for condonation of delay with following prayer. ‘’The Counsel for the humble assessee appellant applicant prays for the condonation of delay of 10 days in the filling of Appeal for the following reason:
1. 1. That the Id. CIT (Appeals) passed his order on 26.02.2025 which was served upon the email of the assessee appellant.
2. That assessee has shared the hard copy of the impugned order dated 26.02.2025 to is counsel Mr. Saurav Harsh before the expiry of limitation period of filing the appeal.
3. That the hard copy of order provided by the assessee was left by me at his residence and due to an inadvertent lapse, the order misplaced among with other papers and inadvertently forgot about the order, which remained misplaced among other papers.
4. That when hard copy of order finds by the counsel at his residence till that time the appeal got expired from the limitation period provided under the Act. That subsequently, the counsel without any further delay filed the appeal before the Hon'ble Bench. 5 That the appellant had acted diligently and in good faith, having provided all relevant papers and instructions to the counsel in time. The delay occurred solely due to the unintentional lapse on the part of the counsel, which was beyond the control of the appellant.
6. That immediately upon coming to know about the omission, the counsel for the appellant has taken prompt steps to file the present appeal without any further delay.
3 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA 7. That the delay in filing the appeal is neither deliberate nor intentional, but has occurred due to circumstances beyond the control of the appellant, and the same deserves to be condoned in the interest of substantial justice.
That it is well settled in law, as held by various Hon'ble Courts, that a litigant should not be made to suffer for the fault or inadvertence of his counsel, and that technicalities of limitation should not override substantial justice.
An Affidavit of the counsel for the assessee appellant is duly sworn in this regard is also enclosed herewith. With this background, we request your honour to take stock of the situation in totality, take a lenient and human approach towards the humble assessee appellant as the delay was not intentional and due to unavoidable circumstances. That in these circumstances we request your honor's to kindly condone the delay and oblige.’’ To this effect, Shri Saurav Harsh ld. AR of the assessee submitted an affidavit deposing therein the above facts of the case. 2.2 On the other hand, ld. DR did not oppose to such a minor delay of 10 days and submitted that the Court may decide the issue as deemed fit and proper in the case. 2.3 We have heard both the parties and perused the materials available on record. In this case, the Bench noted that the ld. AR of the assessee himself accepted the delay of 10 days occurred in filing the appeal. The impugned order of ld. CIT(A) dated 26-02-2025 was served on the e-mail of the assessee and the assessee had shared the hard copy of the impugned order dated 26-02-2025 to him but inadvertently the same was misplaced from his custody along with other papers and thus the period for filing of 4 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA appeal expired. However, he filed the appeal before ITAT without much delay. The Bench has considered the cause of such delay of 10 days and found that there was sufficient cause in timely not filing the appeal by the Counsel, and there is merit in the application. Thus the delay is condoned. 3.1 Apropos grounds of appeal, it is noticed that the ld. CIT(A) passed an ex-parte order in spite of providing several opportunities to the assessee to file the submission in support of his case but the same was not furnished and thus ld. CIT(A) decided the case on the basis of the material available on record, and, ultimately, he dismissed the appeal by observing in para 5.3 of his order as under:- ‘’5.3 I have considered the facts of the case and written submission of the appellant as against the observations / findings of the AO in the assessment order for the year under consideration. The contentions/ submissions of the appellant are being discussed and decided as under:- The AO noted that during the search proceedings in the case of Amit Rohada. Various incriminating documents were found and seized. On perusal of page no. 16 of exhibit-11, it is noticed that a page of a diary was sent by Vivek Tyagi to Shri Amit Rohada in which calculation of cash distribution was recorded and shared among them. This calculation pertains to a company M/s Dream works International Pvt. Ltd. in which Shri Amit Rohada is director along with Shri Vivek Tyagi, Shri Jitendra Sadhwani, Smt. Prerna Tyagi and Smt. Smita Tyagi. An amount of Rs. 19,95,000/-was distributed in cash among them as reflected in the page of the diary sent by Shri Vivek Tyagi. These payments were done in the current year 2019-20 as per date of the chat between these persons. Although Shri Amit Rohada stated that these calculations are related to dividend distribution of the company. Details of the cash distribution with relevant page is mentioned as under "Amit Rohada- 4,78,800 Jitendra Sadhwani- 4,78,800
5 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA Vivek Tyagi- 4,38,900 Smita Tyagi- 4,38,900 Prerna Tyagi- 1,59,600 During the post search enquiries, Shri Amit Rohada was asked to explain the cash distribution transactions from their books of accounts. But he did not submit any explanation in this regard. During the assessment proceedings, the assessee stated that ‘’he is not aware of any such transaction of Rs 19,95,000 nor he has received any cash of Rs. 4,78,800 as mentioned in the chat between Shin Amit Rohada and Shri Vivek Tyagi. Further, assesses has stated that during the search proceedings, no such chat was found from his mobile and mere mentioned of the name in any formal or non-formal chat between third parties without any corroborative evidences against the assessee does not by any stretch of imagination prove his involvement.’’ The assessee is a director of M/s Dream works International Pvt. Ltd., Kota along with Shri Vivek Tyagi, Shri Amit Rohada, Prerna Tyagi and Smt. Smita Tyagi. This company is running a hostel for providing accommodation for those students who come to Kota for preparing the Entrance Exam of IIT and Medical. Most of the students pay their hostel rent and other charges in cash. On perusal of the incriminating documents i.e. chat found during the search proceedings is clearly shows that an amount of Rs. 19,95,000/- was distributed in cash among the directors of the company as reflected in the page of the diary sent by Shri Vivek Tyagi. On this page, it is clearly mentioned that the amount of Rs. 4,78,800/- was "PAID IN CASH to Shri Jitendra Sadhwani. The assessee had denied this transaction recorded in this chat because this transaction was not recorded in regular book of accounts of the assessee for the relevant year and the assessee is also not able to explain this transaction. Considering the facts of the case, the reply of the assessee is not found satisfactory Therefore, cash receipts of Rs. 4,78,800/- is added to the total income of the assessee under the head unaccounted cash receipts. The facts of the case are considered. The document was found from the possession of other director of the Company where the assessee is also director. The AO noted that Shri Amit Rohada stated that these calculations are related to dividend distribution of the company. The addition made by the AO is therefore based on incriminating document or data found and seized. One of the director of the Company accepted the transaction. In these facts, the denial of the assessee is not found to be acceptable as no evidence is furnished by the 6 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA assessee to controvert or negate the document. The appellant has not furnished any arguments in the appellate proceedings to disprove the findings of the AO. The findings of the AO are based on seized documents during the search and statement of one of the Directors of the Company The addition made by the AO is therefore found to be justified and upheld. This ground of appeal is treated as dismissed 2.4 During the course of hearing, the ld.AR of the assessee submitted that on the last date of hearing before the ld. CIT(A), who passed an ex- parte order by confirming the action of the AO, ld. AR of the assessee had sought adjournment but the same was not granted. He further submitted that he may be provided with one more chance to contest the case before the ld. CIT(A) so that he may submit the desired information before the AO to bring an end to the apple of discord.
2.5 On the other hand, the ld. DR did not controvert the request of the ld. AR of the assessee to restore the matter but at the same time she insisted that the assessee had not provided complete details even to the ld. AO and therefore, if the matter is to be remanded back the same should be remanded to the ld.AO, effective adjudication and decision afresh.
2.6 We have heard both the parties and perused the materials available on record. In this case, it is noted that the AO made addition in the hands of the assessee amounting to Rs.4,78,800/- as cash receipts for which the 7 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA assessee had denied this transaction recorded in chat because transaction was not recorded in regular books of accounts of the assessee for the relevant year and the assessee was not able to explain this transaction. In first appeal, the ld. CIT(A) confirmed the action of the AO as the assesse had not furnished any argument to disprove the findings of the AO. As noticed above, the submission of the ld. AR of the assessee is that he had requested the ld. CIT(A) for grant of an adjournment in the case, but the same was declined and the order was passed suo motu by the ld CIT(A, and the assessee deprived off an opportunity to contest the case before the ld. CIT(A).
2.6.1. Considering the rival submissions before us, we deem it a fit case to restore the matter to the file of the ld. AO for afresh adjudication. At the same time, assessee is directed to submit all the desired documents before the AO.
2.6.2 . Consequently, while setting aside the impugned order passed by Ld CIT(A), the matter is remanded to the Jurisdictional Assessing Officer for decision on the abovesaid issue involved, after providing reasonable opportunity to the assessee of being heard.
8 NO. 767/JPR/ 2025 SHRI JITENDRA SADHWANI VS ACIT,CENTRAL CIRCLE, KOTA 3.0 In the result, the appeal of the assessee is disposed of, for statistical purposes. Order pronounced in the open Court on 12 / 08 /2025.