RAJESH KUMAR SAXENA,PACHORE RAJGARH vs. ITO RAJGARH, RAJGARJ MP

the order bearing Number ITBA/NFAC/S/250/2023- 24/1054603647(1) dated 26.07.2023 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the Page 1 of 16 “Impugned order”. The relevant Assessment Year is 2009-10 and the corresponding previous year period is from 01.04.2008 to 31.03.2009.

2.2 The department of Income Tax basis AIR had an information that the assessee in his saving bank account for the year 2008-09 had deposited sum of Rs.36,64,145/-.

2.3 The revenue vide letter dated 19.03.2012 issued u/s 133(b) of the Act sought details from the assessee the nature and source of such deposit but the assessee did not comply with the requisitions so made.

2.4 That a notice dated 28.03.2014 u/s 148 of the Act was also issued to the assessee and the same was served too. The assessee did not comply with the requisitions made in the said notice dated 28.03.2014 nor has filed any return of income.

Even notice u/s 142(1) of the Act dated 10.07.2015 was not complied with despite giving time to the assessee to file the Page 2 of 16 return of income till 26.07.2015. Once again notice dated 21.08.2015 u/s 1421) of the Act was issued to the assessee to file return of income by 24.09.2015 but no compliance was made by the assessee.

2.5 That a notice dated 15.02.2016 u/s 142(1) of the Act along with Section 144 was also issued by e-mail id rajgarh.itoincometax.gov.in on which from e-mail id activerajesh@gmail.com the assessee brought to the notice of department that he does not understand contents of the notice which is issued in English and requested the department to do correspondence in Hindi.

2.6 That it is recorded in the aforesaid assessment order that notice dated 28.03.2014 u/s 148 of the Act was in Hindi still the assessee had not complied with the requisition so made.

2.7 It is also recorded in the aforesaid assessment order that request of the assessee and that once again a notice u/s 142(1) r.w.s. 144 of the Act was issued in Hindi and hearing was fixed for 11.03.2016 however this too remained non compliant by the assessee.

Page 3 of 16 2.8 In view of the aforesaid assessee has remained non complaint throughout for a period of nearly 2 years and therefore Ld. A.O was left with no other alternative left but to exercise his power u/s 144 of the Act to “best judgment assessment” and consequently basis AIR information computed and assessed income of assessee at Rs.36,64,145/- as no explanation and reply was filed by the assessee in this regard despite notice(s) after notice(s) (supra).

2.9 That the aforesaid assessment order is hereinafter referred to as the “impugned assessment order” that the same is dated 28.03.2016.

2.10 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the 1st appeal of the assessee on the grounds and reasons stated therein. The core grounds and reasons are as under:-

“In view of the above, I have carefully considered the facts of the case and find that the A.O. made addition of Rs.36,64,145/- as unexplained income in the returned income of the appellant. During the assessment proceedings, the A.O. noticed that the appellant has deposited amount of Rs.36,64,145/- in the his bank account during the F.Y. 2008-09. Various notices were issued by the AO to furnish the satisfactory explanation/ evidence or Page 4 of 16 source of cash deposit but the appellant did not furnished the source of cash deposit/documentary evidence. Even during the appellate proceedings, the appellant has been provided several opportunities for furnishing written submission alongwith supporting evidences with respect to his appeal, but the appellant has not filed any reply/evidences with respect to his appeal. In the statement of facts, the appellant has stated that he was engaged in the business of sale of mobile recharge vouchers and he was distributor of Bharti Airtel Ltd. Vide this office notice dated 19.07.2023, the appellant was specifically requested to provide the evidences viz. copy of his bank account, evidences regarding his agreement with Bharti Airtel Ltd. But, the appellant could not provide any evidences in this regard. In the absence of furnishing any reply/evidence in support of appeal filed by the appellant, I have no option but to confirm the order of assessing officer. Accordingly, the ground of appeals are not allowed”.

2.11 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in the Form No.36 against the “impugned order” which are as under:-

“1. That on the facts and in the circumstances of the case, the notice issued U/s. 148 and assessment order passed U/s. 144 rws 147 in the case of the appellant are wrong and invalid.

2. That on the facts and in the circumstances of the case, the addition of Rs.3664145/- made in the case of the appellant, by deeming the entire cash deposit in the bank account as unexplained income is also wrong, invalid and unjustified.

Page 5 of 16 against each transfer to Bharti Airtel the bank has specifically written the name of Bharti Airtel. (b). That the complete submissions along with all documents (including reply on remand report) were made much earlier before the Ld.CIT(A), up to 18/07/2018, in physical hearing before him in Income Tax Office Ujjain, but despite that the appeal order has been passed ex parte by Ld. CIT(A) without considering all earlier submissions”

3. Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 18.11.2025 when the Ld. AR appearing for and on behalf of the assessee submitted that the registry has pointed out that there is a delay of 560 days in filing the present appeal. In this regard he submitted that a request has been made to this Tribunal to condone the delay. It was submitted that the “impugned order” is dated 26.07.2023. The second appeal before this Tribunal ought to have been filed on or before 25.09.2023. There is a delay of 18 months and few days. The second appeal was filed on 05.04.2025. It was submitted that delay is not intentional. The delay was beyond the control of the assessee. There is proper, sufficient and genuine reason for the delay. That the conduct of the assessee is a bonafide one and is one of cooperation with the revenue. It was submitted that all the submissions in the complete form were made much earlier before the Ld. CIT(A) upto

Page 6 of 16 18.07.2018 in the physical hearing before him in the Income Tax office, Ujjain. That after the completion of physical hearing of appeal, the assessee was not only waiting for appeal order but for long time no communication was received from the Ld. CIT(A) office. That later on online hearings were fixed regarding which the assessee could not know because:-

(i) The notices were sent to the e-mail id of new counsel who had no knowledge about old appeal case and that he could not understand the notice(s).

(ii) The notice(s) were not physically delivered or send by post to the assessee.

(iii) No mobile message about appeal hearing fixation was received by the assessee.

(iv) When the penalty order u/s 271(1)(c) of the Act was passed on or about 26.03.2025 and the Income Tax

Department employee approached the assessee for deposit of demand then only the assessee came to know about the ex-parte passing of order of Ld. CIT(A). It is only thereafter immediately with the help of old counsel the present appeal was filed belatedly. Hence delay be condoned.

On merits it was contended that the assessee has a good prima facie case in a sense that the “impugned order” is an ex- parte order as all the submissions were made in the physical hearing upto 18.07.2018 and that these submissions were not considered in the “impugned order” . An affidavit in support of condonation of delay application dated 04.04.2025 is too placed on record. The Ld. DR initially raised objection against condonation of delay but ultimately realizing the facts and nature of case, left to the wisdom of bench. After considering the submissions we are of the considered opinion that the assessee has demonstrated sufficient cause for condonation of delay and even otherwise the “impugned order” prime facie appears to be in violation of the principles of natural justice. Revenue has no objection too as it appears. Hence we condone the delay and appeal is admitted.

3.2 The Ld. AR then submitted that in so far as merit of the case is concerned there is an addition of Rs.36,64,145/- in the “impugned assessment order” dated 28.03.2016. The assessee is a distributor of Bharti Airtel. The Ld. AR has placed on record of this tribunal a paper books containing pages 1 to 54 along

Page 8 of 16 with gist of submission. The gist of submissions is reproduced by us:-

“::: GIST OF SUBMISSIONS :::”

MAIN ISSUE:

ADDITION OF RS. 3664145/- (ON ACCOUNT OF CASH DEPOSITS IN BANK A/C) (ENTIRE CASH DEPOSIT MADE IN THE BANK ACCOUNT HAS BEEN TREATED AS INCOME OF THE APPELLANT)

MAIN SUBMISSIONS:

(1) THE APPELLANT WAS DISTRIBUTOR OF BHARTI AIRTEL MOBILE RECHARGE VOUCHERS. THE AMOUNT WHICH WAS DEPOSITED IN BANK ACCOUNT WAS MAINLY OUT OF SALE PROCEEDS OF MOBILE VOUCHERS. MOBILE VOUCHERS WERE SOLD IN CASH AND PROCEEDS WERE DEPOSITED IN BANK ACCOUNT. THEREAFTER, PAYMENTS WERE MADE TO BHARTI AIRTEL FOR PURCHASE OF MOBILE VOUCHERS.

(2) THE COPY OF BANK ACCOUNT IS ATTACHED (PAGE 03-13) WHEREIN AT VARIOUS PLACES THE NAME OF BHARTI AIRTEL LIMITED HAS BEEN CLEARLY MENTIONED AGAINST VARIOUS PAYMENTS.

(3) THE COPY OF DISTRIBUTORSHIP AGREEMENT WITH BHARTI AIRTEL IS ATTACHED HEREWITH (PAGE 15-22). THE COPY OF DISTRIBUTORSHIP APPOINTMENT LETTER IN NAME OF APPELLANT IS ATTACHED HEREWITH (PAGE 14-14).

(4) THE ENTIRE CASH DEPOSITS IN BANK HAVE BEEN TREATED AS INCOME OF THE APPELLANT WHEREAS ONLY NET PROFIT ON SALE PROCEEDS WAS CHARGEABLE TO TAX. THE BHARTI AIRTEL GIVES ABOUT 5% COMMISSION ON MOBILE RECHARGE VOUCHER SALES. OUT OF THAT THE APPELLANT HAD TO GIVE DISCOUNT / COMMISSION TO RETAILERS AT ABOUT 3% - 3.5%. AFTER THAT ONLY 1.5% 2% COMMISSION REMAINED WITH THE APPELLANT. AFTER DEDUCTING BUSINESS EXPENSES FROM ABOVE GROSS MARGIN, THERE WAS NO PROFIT TO THE APPELLANT. THEREFORE, THE APPELLANT CLOSED THE ABOVE BUSINESS.

(5) THE APPELLANT RELIES ON THE JUDICIAL DECISION OF HONBLE ITAT DELHI, IN WHICH IT HAS BEEN HELD THAT THE Page 9 of 16

GROSS MARGIN OF COMMISSION GIVEN BY BHARTI AIRTEL WAS ABOUT 4.67% (BEFORE RETAILER DISCOUNT ETC.)

(6) IN REMAND REPORT, THE ITO RAJGARH HAS NOT OBJECTED THE SUBMISSIONS OF THE APPELLANT. HE HAS MERELY SAID THAT SUBMISSIONS WERE NOT MADE IN ASSESSMENT PROCEEDINGS AND ASSESSMENT WAS GETTING TIME BARRED. RATHER HE ACCEPTED THAT FROM THE DOCUMENTS PRODUCED MOBILE NETWORK AGENCY OF THE APPELLANT WAS CONFIRMED.

(7) THE AMOUNT OF RS. 3664145/- WAS NOT A SINGLE AMOUNT OR ONLY FEW AMOUNTS. BUT THE ABOVE AMOUNT WAS SUM TOTAL OF LARGE NO. OF PETTY CASH DEPOSITS MADE IN THE BANK ACCOUNT THROUGH OUT THE YEAR. THE AMOUNTS DEPOSITED WERE IMMEDIATELY UTILIZED. THERE WAS ONLY ROTATION OF SMALL CAPITAL IN BUSINESS. THE CLOSING BALANCE IN THE BANK ACCOUNT ALWAYS REMAINED AT VERY LOW AMOUNT. THE MAXIMUM PEAK BALANCE WAS ONLY AT RS. 182168 ON 29.09.2008.

(8) THE LD, CIT(A) HAS PASSED EX PARTE ORDER. THE APPELLANT HAD ALREADY MADE DETAILED SUBMISSIONS IN PHYSICAL HEARINGS BEFORE LD CIT(A), ON 08.05.2017 AND THEREAFTER ON 18.07.2018 IN RESPONSE TO REMAND REPORT OF ITO RAJGARH, BUT THE SAME HAVE NOT BEEN CONSIDERED AT ALL BY THE LD CIT(A), THE APPELLANT HAD NOT RECEIVED NOTICES OF LATER ONLINE HEARINGS. HOWEVER, IN EX PARTE ORDERS ALSO THE SUBMISSIONS MADE EARLIER SHOULD HAVE BEEN CONIDERED.

(9) THE LD AO HAS ALSO PASSED EX PARTE ORDER. THE APPELLANT COULD NOT RECEIVE REASONABLE OPPORTUNITY OF BEING HEARD BEFORE THE LD. AO. BHARTI AIRTEL WAS ALSO NOT COOPERATING THE APPELLANT FOR NECESSARY PAPERS ETC.

(10) NO INCOME TAX SECTION OF ADDITION HAS BEEN MENTIONED IN THE ASSESSMENT ORDER. THEREFORE, THE ADDITION IN NOT VALID.

OTHER RELEVANT FACTS: NOTICE U/S. 148 ISSUED ON-28.03.2014 ASSESSMENT ORDER U/S. 144 RWS 147 PASSED ON-28.03.2016. Page 10 of 16

REMAND REPORT SUBMITTED BY ITO RAJGARH TO CIT(A) (ON THE BASIS OF APPELLANT'S SUBMISSIONS) - 18.11.2017. CIT(A) APPEAL ORDER PASSED ON - 26.07.2023. BANK ACCOUNT DETAILS-SBI UNDAKHEDI - ACCOUNT NO. 53042403893”

3.3 The Ld. AR submitted that after the initial round of hearing before the “impugned order” was passed the first appeal was migrated to the NFAC and an ex-parte order came to be issued by the Ld. CIT(A). It was submitted by him that in the earlier and initial round of hearings before the Ld. CIT(A) the assessee counsels were Sharad Jain, CA and Lokendra Jain, Tax Consultant who had appeared before the Ld. CIT(A) along with him in the year 2017. It was also submitted that on 08.05.2017 the assessee was present before Ld. CIT(A) and had filed his say in the matter. The Ld. CIT(A) had asked the assessee to submit to him extra set of remand report plus his reply which was provided to him. It was also submitted that the assessee was called to ITO, Rajgarh where on 22.06.2017 and 26.09.2017 he was present for verification purposes and for recording of his statements/say which fact is mentioned also in the remand report. The Ld. AR submitted that the ITO, Rajgarh

Page 11 of 16 on 18.12.2017 submitted a remand report and copy of the same was given to the assessee also. It was also submitted that on 18.07.2018 before the Ld. CIT(A) his say was recorded by the Ld.

CIT(A) and the same was countersigned by his counsels. Later on one or more dates were fixed for hearing by the Ld. CIT(A) and thereafter the assessee was waiting for appellate order but he did not hear anything.

3.4 The Ld. AR submitted that later for the Assessment Year 2021-22 the assessee started filing his ITR on online mode.

Earlier his counsels were of Ujjain and he was required to go to Ujjain often. Later he selected and appointed one CA by name Umesh Parmar who stated filing his ITR return w.e.f. A.Y 2021-

Page 12 of 16 only after the penalty order passed u/s 271(1)(c) of the Act and that too when the officers of the department came for recovery.

In brief the Ld. AR submitted that the “impugned order” is an ex-parte order in respect of which no notices as mentioned on internal page 3 to 4 of “impugned order” were ever received by him and as far as his new CA Umesh Parmar on whose e-mail id CA Umesh Parmar@gmail.com was delivered was not aware of old proceedings which were held before the Ld. CIT(A) in the Year 2017 & 2018. It was finally submitted that the “impugned order” is an ex-parte order and in the “impugned order” there is no mention of remand report (supra). Per contra Ld. DR suvbmitted that the assessee ought to have been vigilant before the Ld. A.O. The assessee was non cooperative before the Ld. A.O. No participation before the Ld. A.O by the assessee and no evidence was produced by the assessee before the Ld. A.O.

The Ld. DR fairly conceded that there is no mention of remand report in the “impugned order” . Further the assessee was non compliant in respect of notices appearing at internal page 4 of Ld. CIT(A) order. Notices went as per data base of the department.

Mere letter of new CA (Counsel) dated 24.10.2025 page 53 of the Page 13 of 16 paper book relied upon by the Ld. AR is not sufficient. Ld.Dr fairly submitted that the remand report is required to conclusively drawn by the authorities. However no remand report appears in the “impugned order”. The Ld. DR fairly stated that the matter should in all fairness be remanded to the Ld. CIT(A) where the assessee should appear and cooperate with the authorities. All past proceedings, records of 2017 and 2018 be produced before the Ld. CIT(A) if they are in possession of the assessee. In rejoinder the Ld. AR too concurs that it would be in the fitness of things that the matter be remanded back to Ld. CIT(A) where an opportunity should be given to the assessee to produce all information, material and documents in support of his contentions. Hearing was then concluded.

4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.

4.2 We have carefully perused the records of the case as presented to this Tribunal by both the Ld. AR & the Ld. DR to Page 14 of 16 determine the legality, validity of the “impugned order” basis law and by following the due process.

4.3 We basis records of the case and after hearing and upon examining the rival contentions are of the considered view that both the Ld. AR & Ld. DR are Ad idem that the “impugned order” should be set aside and that the matter should be remanded back to the file of Ld. CIT(A) on denovo basis.

4.4 In view of the aforesaid we set aside the “impugned order” and remand the case back to the file of Ld. CIT(A).

5.2 In result, appeal of the assesse is allowed for statistical purpose. Order pronounced in open court on 21.11.2025.