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Facts
The assessee's case was reopened under section 147 based on information from a search and survey, leading to an addition of Rs. 50,00,000/- for an alleged cash loan. The CIT(A) dismissed the assessee's appeal, stating non-compliance and failure to prove the source of the loan.
Held
The ITAT found that the CIT(A) had failed to adjudicate all grounds raised by the assessee, including those challenging the reopening and the merits of the addition under section 68. The tribunal noted that the CIT(A)'s order was cryptic and lacked a speaking order.
Key Issues
Whether the CIT(A) properly adjudicated all grounds of appeal, including the validity of reopening and the substance of additions, or if a remand for fresh adjudication is necessary.
Sections Cited
250, 147, 148, 143(1), 132, 143(2), 142(1), 144B, 68, 115BBE, 199, 234A, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM AND
O R D E R Per Bench:
The captioned appeals are filed by the assessee, challenging the order of the Learned Commissioner of Income Tax [‘Ld. CIT(A)’ for short], National Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act') pertaining to the Assessment Year (‘A.Y.’ for short) 2014-15, 2016-17 & 2017-18. As the facts are identical, we hereby pass a consolidated order by taking pertaining to A.Y. 2014-15 as the lead case.
The assessee has raised the following grounds of appeal:
“1. GROUNDS OF APPEAL NOT ADJUDICATED BY CIT(A)
, 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi
The Learned CIT(A)-NFAC erred in law and facts in not adjudicating the following Grounds raised by the appellant.
a. Ground 1- Re-opening u/s 147 is bad in law b. Ground 2 Violation of the Principle of Natural Justice and Reasonable Opportunity. c. Ground 4-Non-grant of TDS credit of Rs.3,97,946/- d. Ground 5-Non-grant of S. A Tax Credit of Rs. 9,870/- e. Ground 6 - Wrong charging of interest u/s 234A of Rs. 2,22,662/- f. Ground 7- Initiation of penalty proceedings u/s 271(1)(c)
The Learned CIT(A)-NFAC ought to have adjudicated all the grounds raised by the appellant.
Without prejudice to the above, an application u/s 154 dated 17.10.2025 have been filed before Learned CIT(A)-NFAC.
II. NON GRANT OF VIDEO CONFERENCE HEARING THEREBY VIOLATING THE PRINCIPLES OF NATURAL JUSTICE AND REASONABLE OPPORTUNITY
The Learned CIT(A)-NFAC erred in not granting opportunity for personal hearing through Video conference in spite of request made which is in violation of principal in natural justice.
The Learned CIT(ANFAC ought to have granted opportunity for personal hearing through Video conference.
Non grant of opportunity for personal Hearing through Vides conference in spite of request made is in violation of principal in natural justice and accordingly the order passed is bad in low.
III. REOPENING U/S 147 IS BAD IN LAW
The Learned CIT(A)-NFAC erred in law and on facts in not adjudicating the ground of re- opening u/s 147 being bad in law by considering it as general in nature
The Learned CIT(A)-NFAC failed to appreciate the fact that a. The notice u/s 148 dated 30.03.2021 is issued after the lapse of 4 years.
, 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi b. The notice issued u/s 148 was based on borrowed satisfaction without any independent enquiry or application of mind and was issued in a mechanical and casual manner merely based of search proceedings in case of Evergreen Enterprises Partner Nilesh Shamji Bharani
The Reopening of proceedings u/s 147 is bad in law and requires to be quashed.
IV. VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE AND REASONABLE OPPORTUNITY:
The Learned CIT(A)-NFAC erred in law and on facts in not adjudicating the ground of violation of principal of natural justice and reasonable opportunity by considering it as general in nature.
The Learned CIT(A)-NFAC failed to appreciate the fact that the AO (NFAC) had neither furnished any documents, data, statements relied upon based on which assessment was reopened which was specifically requested vide letter dated 2.3.2022 nor granting a personal hearing through video conferencing and denying the opportunity to cross- examine parties, despite specific requests made on 19.03.2022.
The assessment order dated 26.03.2022 passed u/s 147 r.w.s. 1448 is invalid and bad in law due to violation of principal of natural justice and reasonable opportunity of being heard.
V. ADDITION ON ACCOUNT OF ALLEGED CASH LOAN TAKEN OF Rs. 50,00,000/-u/s 68 r.w.s 115BBE
The Learned CIT(A)-NFAC erred in confirming addition u/s 68 r.w.s. 115BBE on account of alleged Cash Loan having been taken of Rs.50,00,000/- through Mr. Nilesh Bharani Partner of Evergreen Enterprises without any corroborative evidence merely on the basis of surmises, incorrect presumption and wrong assumption of facts.
The Learned CIT(A)-NFAC failed to appreciate the fact that:
a. The reasons recorded for re-opening were on account of loan having been given of Rs.50,00,000/- whereas the addition is made and confirmed for loan having been taken of Rs.50,00,000/-. b. There are no evidence or documents related to the appellant for making additions c. The addition made is merely relying on the sworn statement u/s 132(4) of Mr. Nilesh Bharani (Partner of M/s Evergreen Enterprises) which was retracted later whereby no reliance could have been placed on his statement without any corroborative evidence.
, 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi d. Case laws relied upon by the appellant are not considered nor distinguished.
The addition u/s 68 1.ws.115BBE for cash credit is bad in law as the said provisions are not applicable to the appellarit
The addition u/s 68 tws 115BBE on account of alleged cash loan taken of Rs.50,00,000/- requires to be deleted
VI. NON GRANT OF TDS CREDIT OF Rs. 3,97,946
The Learned CIT(A)-NFAC erred in not adjudicating ground non-grant of TDS credit of Rs.3,97,946/
The Learned CIT(A)-NFAC failed to appreciate the fact that the appellant had offered the corresponding income to tax, and TDS credit of Rs. 3.57,946/-should have been granted as per Section 199.
The credit for TDS of Rs. 3,97,946/- requires to be granted.
VII. NON GRANT OF SA TAX CREDIT OF Rs. 9.870/-:
The Learned CIT(A)-NFAC erred in not adjudicating ground of non-grant of S.A. tax credit of Rs. 9,870/- which is paid on 4.6.2015 and is duly reflected in Form 26AS.
The credit for Self-assessment tax of Rs. 9,870/- requires to be granted.
VIII. WRONG CHARGING OF INTEREST U/S 234A OF Rs. 2.22.662/-
The Learned CIT(A)-NFAC erred in not adjudicating the ground of wrong charging of interest u/s 234A of Rs. 2,22,662/-
The Learned CIT(A)-NFAC failed to appreciate the fact that the Appellant has e-filed the original return of income on 21.09.2014 i.e. before the due date 30.09.2014 for AY 2014- 15 whereby interest u/s 234A is not leviable and requires to be deleted.
IX. INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(c) OF THE I. T. ACT 1961:
The Learned CIT (A)-NFAC erred in not adjudicating the ground of initiating penalty proceedings u/s 271(1) (c) of the I.T. Act 1961.
The Learned CIT(A)-NFAC ought not to have adjudicated the penalty proceedings u/s 271(1)(c) of the I. T. Act.
X. ADDITIONAL GROUND, IF ANY TO BE ADDED , 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi
The appellant craves leave and reserves the right to add, alter, amend, modify or delete any of the ground/s before or during the course of the hearing.
The appellant reserves the right to produce additional evidence before or during the course of the hearing.
Each one of the above grounds of appeal is without prejudice to the other.”
Brief facts of the case are that the assessee is an individual and had filed his return of income dated 21.09.2014 declaring total income at Rs.62,95,876/- and the same was processed u/s 143(1) of the Act. The assessee’s case was reopened vide notice u/s 148 of the Act dated 30.03.2021 for the reason that based on the information by JCIT (OSD), Cen.
Cir - 4(1) vide letter dated 12.03.2021 pursuant to a search and survey action u/s 132 of the Act carried out in the case of M/s. Evergreen Enterprises wherein it was found that cash loans were received from various parties including the assessee who is said to have advanced cash loan amounting to Rs.50,00,000/- which was not disclosed fully and truly by the assessee, thereby attracting the provision of section 147 of the Act that income has escaped assessment for the relevant year. Notices u/s 143(2) & 142(1) were also issued and served upon the assessee. The assessee filed his reply to the show cause notice along with details such as P&L account, balance sheet, schedules to balance sheet etc. were furnished. The Learned Assessing Officer (“Ld. AO” for short) observed that Rs.50,00,000/- cash loan was not appearing in the list of sundry debtors though was appearing in the list of M/s. Evergreen Enterprises. The assessee in his response to the show cause notice had also requested to grant cross examination of Mr. Nilesh Bharani who was the partner of M/s. Evergreen Enterprises whose statements were relied upon by the Ld. AO. After duly considering the assessee’s submission the Ld. AO passed the 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi assessment order dated 26.03.2022 u/s 147 r.w.s. 144B of the Act determining the total income at Rs.1,12,95,876/- after making an addition of Rs.50,00,000/- towards the cash loan as being unexplained by the assessee as per the provisions of section 68 of the Act.
The assessee preferred an appeal before the first appellate authority who vide order dated 11.09.2025 dismissed the grounds of appeal raised by the assessee on the ground that the assessee inspite of several notices had not complied with thereby failing to prove the source of the cash loan with supporting documentary evidences.
Aggrieved, the assessee is in appeal before us, challenging the order of the Ld.
CIT(A) on various grounds both legal as well as on the merits of the case.
The contention of the Learned Authorised Representative (‘Ld. AR’ for short) for the assessee is that the Ld. CIT(A) had failed to adjudicate the grounds raised by the assessee on the issue of reopening as being bad in law, violation of principles of natural justice where the assessee’s request of personal hearing through video conferencing was not granted to the assessee inspite of request made to the Ld. CIT(A) during the first appellate proceeding. Further, the Ld. AR also contended that the Ld. CIT(A) has failed to pass a speaking order on the merits of the addition made u/s 68 of the Act and had also not adjudicated the grounds on non-grant of TDS credit and self-assessment tax credit along with other issues pertaining to interest and penalty levied. The Ld. AR prayed that all these issues be remanded back to the Ld. CIT(A) for proper adjudication of all the grounds raised by the assessee by a speaking order.
, 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi
The Departmental Representative (‘Ld. DR’ for short), on the other hand, had nothing to controvert the same and relied on the order of the lower authorities.
We have heard the rival submissions and perused the materials available on record.
It is observed that the Ld. AO has made an addition towards cash loan alleged to have given by the assessee to M/s. Evergreen Enterprises which was brought to the knowledge of the Ld. AO pursuant to the search and seizure operation carried out in the said group. The assessee, though, has raised specific ground challenging the reassessment proceeding along with various other grounds before the first appellate authority, it is evident that the Ld.
CIT(A) has failed to adjudicate all the grounds raised by the assessee during the first appellate proceeding. Further, even the grounds on the additions made u/s 68 of the Act the Ld. CIT(A) has decided the issue on a cryptic manner without passing a speaking order.
We find merit in the arguments of the Ld. AR for remanding the issue to the file of the Ld.
CIT(A) for denovo adjudication on all the grounds raised by the assessee including the grounds on addition made u/s 68 of the Act. We, therefore, remand this issue back to the file of the Ld. CIT(A) for adjudicating the issues on the merits and in accordance with law and on the basis of the evidences filed by the assessee after giving sufficient opportunity of hearing. The assessee is also directed to comply with the proceeding before the first appellate authority and to substantiate his claim by sufficient documentary evidences.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.
, 7170 & 7171/Mum/2025 Ms. Bharat Kantilal Doshi
As the facts of the other two appeals in & 7171/Mum/2025 are also identical to the appeal in except for the quantum of addition, the finding given in ITA No.7169/M/2025 will apply mutatis mutandis to the other two appeals in ITA Nos.7170 & 7171/Mum/2025 as well and hence the same are also hereby allowed for statistical purpose.
In the result, all the appeals filed by the assessee are allowed for statistical purpose.
Order pronounced in the open court on 23.02.2026
Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 23.02.2026 * Kishore, Sr. P.S.
Copy of the Order forwarded to:
The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,
(Dy./Asstt.Registrar) ITAT, Mumbai