KISHOR CHANGYA PATIL,MUMBAI vs. ITO41(1)(2), MUMBAI

ITA 8032/MUM/2025Status: DisposedITAT Mumbai17 February 2026AY 2016-175 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that while the assessee was non-compliant before the CIT(A) on 14 occasions, and no reasonable cause was provided for this non-compliance, the crucial observation was that the CIT(A) had not made any adjudication on merits. The Tribunal noted that an adjudication on merits is mandatory as per sections 250(4) and 250(6) of the Act. The Tribunal relied on the decision of the Hon'ble Bombay High Court in CIT vs. Premkumar Arjundas Luthra (HUF), which held that the CIT(A) is obliged to dispose of an appeal on merits and cannot dismiss it for non-prosecution. The powers of the CIT(A) are co-terminus with the AO, and they must apply their mind to all issues arising from the impugned order. Therefore, the Tribunal set aside the impugned order of the CIT(A) and restored the matter back to his file for fresh adjudication. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Mr. Kailash Prakash Karamchandani, engaged in trading mobile handsets, filed his return for AY 2014-15 declaring an income of Rs. 1,29,13,870/-. His case was selected for scrutiny, and the Assessing Officer (AO) made an addition of Rs. 38,76,790/- and Rs. 69,13,475/- under section 2(22)(e) of the Income Tax Act, 1961. The assessee appealed to the Commissioner of Income Tax (Appeals)-54, Mumbai (CIT(A)). However, the CIT(A) dismissed the appeal in limine due to non-prosecution. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the CIT(A)'s order dated 05.11.2025.

What were the issues?

1. Whether the CIT(A) erred in framing an ex parte order, and ought not to have passed such an order on the facts and in the circumstances of the case and in law? (Question of law and fact, concerning procedural fairness). 2. Whether the CIT(A) erred in not disposing of the ground of appeal on merits, specifically concerning the issue of deemed dividend under section 2(22)(e) of the Act, where the appellant contended that the amount received was against sale and not a loan, which was considered unjustified and unreasonable by the AO? (Question of law and fact, concerning the merits of the addition under section 2(22)(e)). Assessee's contentions: The assessee argued that the non-appearance before the CIT(A) was inadvertent and non-deliberate. Furthermore, the CIT(A) did not adjudicate on the merits of the issues. The assessee prayed for the matter to be restored to the CIT(A) for fresh adjudication. The assessee relied on the grounds of appeal which stated that the CIT(A) ought not to have passed an ex parte order and ought to have disposed of the appeal on merits. Revenue's contentions: The Revenue's Senior Departmental Representative (Sr. DR) vehemently supported the orders of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 2(22)(e),Section 143(3),Section 142(1),Section 143(2),Section 250(4),Section 250(6),Section 251(1)(a),Section 251(1)(b),Section 251(2),Section 246A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM

For Appellant: Shri Akash Kumar (Virtually
For Respondent: Shri Himanshu Joshi, Sr. DR
Hearing: 16.02.2026Pronounced: 17.02.2026

Per Arun Khodpia, AM:

This captioned appeal is preferred by the assessee against the order of Commissioner of Income Tax (Appeals)-54, Mumbai (“Ld. CIT(A)”) dated 05.11.2025 for the assessment year 2014-15, which in turn arises from the order Assessing Officer (AO) dated 31.12.2017 under section 143(3) of the Income

Tax Act, 1961 (the Act). The grounds of appeal raised by assessee are as under: Mr. Kailash Prakash Karamchandani

“The following grounds of appeal are independent of, and without prejudice to, one another-

1.

The Com

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 2(22)(e)

All 1,757 judgments and leading authorities on Section 2(22)(e) →

Recent GST High Court judgments

Search GST case law →