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Facts
The Assessing Officer (AO) reopened the assessment based on information that the assessee made a cash payment of ₹1,87,640/- for an office unit. The AO treated this as an unexplained investment under section 69 of the Act due to the assessee's failure to provide satisfactory explanation.
Held
The Tribunal noted that while the assessee was negligent, the interest of substantial justice requires considering the evidence. Therefore, the matter was restored to the CIT(A) for fresh adjudication, with a direction to the assessee to provide all required details and evidence without unnecessary adjournments.
Key Issues
Whether the assessee should be granted another opportunity to present evidence for a cash payment treated as unexplained investment, especially when the CIT(A) order was ex parte.
Sections Cited
147, 144B, 69
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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI JAGADISH
Per: SHRI JAGADISH, A.M.: 1. This appeal filed by the assessee is directed against the order dated 23.10.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2019–20, arising out of the assessment framed under section 147 read with section 144B of the Income-tax Act, 1961 (“the Act”).
M/s. Atlantic International Express
Briefly stated, the assessment in the case of the assessee was reopened on the basis of information received by the Assessing Officer (AO) that the assessee had allegedly made a cash payment of ₹1,87,640/- during the financial year 2018-19 to M/s. Sangam Textile Hub-B towards acquisition of an office unit valued at ₹35,00,000/-. The information emanated from proceedings conducted by the Investigation Wing during search/survey action in the case of Sangini Group, Surat on 03.12.2021. The AO observed that the assessee failed to satisfactorily explain the source of the said cash payment and accordingly treated the amount as unexplained investment under section 69 of the Act.
Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the addition observing that despite opportunities granted, the assessee did not furnish the necessary documentary evidence to substantiate its claim. In the absence of supporting material, the addition made by the AO was upheld.
Before us, the Ld. Authorised Representative (AR) submitted that the order of the Ld. CIT(A) was passed ex parte and pleaded that one more opportunity may be granted to the assessee to place necessary evidences on record and substantiate its claim.
Per contra, the Ld. Departmental Representative (DR) strongly supported the orders of the lower authorities and submitted that the assessee had been negligent in complying with the notices issued and therefore does not deserve any further opportunity.
We have carefully considered the rival submissions and perused the material available on record. It is evident that the assessee did not effectively avail the opportunities granted by the lower authorities. The conduct of the assessee does indicate lack of due diligence. However, at the same time, it is a settled principle that the cause of substantial M/s. Atlantic International Express justice should prevail over technical considerations, particularly when the matter has been decided without full examination of the assessee’s evidences.
Considering the totality of facts and in the interest of justice and fair play, we deem it appropriate to restore the issue to the file of the Ld. CIT(A) for fresh adjudication. The assessee is hereby directed to promptly comply with all notices and furnish requisite details and documentary evidences without seeking unnecessary adjournments. It is made clear that in case of any further non-compliance, the Ld. CIT(A) shall be at liberty to decide the matter on the basis of material available on record.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24/02/2026