HARSHA BOJARAO DEVRAJ ,MUMBAI vs. INCOME TAX OFFICER WARD 41(3)(1), MUMBAI

The present appeal preferred appeal against the order, dated 25/09/2025, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’], whereby the Learned CIT(A) had dismissed the appeal of the Assessee against the Assessment Order, dated 25/05/2023, passed under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], for the Assessment Year 2017- 2018. 2. The Assessee has raised following grounds of appeal in ITA No.8012/Mum/2025: “GROUND NO. 1: REASSESSMENT PROCEEDINGS UNDER SECTION 148 Assessment Year 2017-2018 ARE VOID The learned CIT(A) erred in confirming the reassessment proceedings initiated under Section 147 of the Act, which are void ab initio and liable to be quashed, as the Assessing Officer failed to comply with the mandatory statutory requirements for recording the requisite satisfaction of the Principal Commissioner of Income Tax before issuing notice under Section 148 of the Act. GROUND NO. 2: ADDITION OF INR 15,37,500 ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS UNDER SECTION 69A OF THE ACT The learned CIT(A) erred in law and on facts in confirming the addition of INR 15,37,500 under Section 69A of the Act on account of alleged unexplained cash deposits without considering the explanations, supporting documents, and reconciliation submitted to the Assessing Officer by the appellant. The learned CIT(A) failed to appreciate that details relating to the cash deposits were fully explained to the Assessing Officer and the same were sourced from past savings of self. parents, family members along with cash withdrawals from earlier years and therefore the addition made is erroneous, unjustified, and bad in law. The learned CIT(A) failed to appreciate that the Assessing Officer made the impugned addition merely on assumptions and surmises, without conducting proper inquiry or verification and without bringing any adverse material on record to prove that the cash represented unexplained income of the appellant. Hence, the addition deserves to be deleted. The learned CIT(A) erred in confirming the action of the Assessing Officer in treating the impugned additions as 'income referred to in Section 115BBE of the Act and in levying tax at 60 percent along with surcharge at 25 percent, which is unjustified, bad in law, and not applicable to the facts of the case. GROUND NO. 3: ADDITION OF INR 6,80,000 ON ACCOUNT OF UNDISCLOSED PROFESSIONAL INCOME IS ERRONEOUS The learned CIT(A) erred in law and on facts in confirming the addition of INR 6,80,000 as undisclosed professional income and further erred in treating the same as business income without appreciating that the alleged receipts ought to have been assessed only after allowing reasonable and legitimate, deduction of expenditure incurred for earning such income. The failure to allow necessary expenses has resulted in an excessive and unjustified addition. Without prejudice to the earlier ground, the learned CIT(A) erred in law and on facts in not allowing the presumptive deduction under Section 44ADA of the Act in respect of the alleged professional receipts of INR 6,80,000. The authorities below ought to have applied Section 44ADA of the Act while computing income instead of taxing the gross amount. 2 Assessment Year 2017-2018

When the appeal was taken up for hearing, the Learned Authorized Representative for the Assessee appearing before us, at the outset, submitted that the appeal preferred by the Assessee before the Learned CIT(A) was dismissed on account of non-prosecution since the Assessee could not enter appearance before the Learned CIT(A). It was explained that the notice of hearing was not received by the Assessee and therefore, the same could not be complied with.

Per contra Learned Departmental Representative opposed the submission made on behalf of the Assessee and submitted that there was no infirmity in the order passed by the Learned CIT(A) since the Assessee had failed appear before Learned CIT(A) despite issuance of notices of hearing on five different occasions.

In rejoinder, without prejudice to submission advanced, it was submitted on behalf of the Assessee that the Learned CIT(A) has not adjudicated the issues on merits and therefore, a lenient view be taken in respect of the non-compliance of the aforesaid notices by the Assessee.

We have heard both the sides and perused the material on record.

We note that the Learned CIT(A) has dismissed the appeal preferred by the Assessee by way of an ex-parte order. The Learned CIT(A) has observed that no submissions and/or supporting documents were furnished on behalf of the Assessee during the appellate proceedings and therefore, there was no material to deviate from the order passed by the Assessing Officer. We find that while dismissing the appeal the Learned CIT(A) has not dealt with the averments made in the statement of facts and the grounds raised by the Assessee in appeal before the Learned CIT(A). Even the legal Grounds raised by the Assessee challenging the validity of reassessment proceedings have not been adjudicated upon. Irrespective of non-appearance of an Assessee before the Learned CIT(A), the Learned CIT(A) is required to deal with the issue raised by the Assessee on merits in view of the provisions contained in Section 250(6) of the Act. [CIT (Central) Nagpur vs. Premkumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Bombay)

In terms of the paragraph 8 above, appeal preferred by the Assessee is partly allowed.

""थ"/ The Respondent. 3. आयकरआयु"/ The CIT

"धान आयकर आयु"/ Pr.CIT 5. िवभागीय"ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 6. गाड"फाईल / Guard file.