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Facts
The assessee, a commission agent, was subjected to reassessment proceedings under Section 148 and an addition was made by the AO after rejecting the books of account. The assessee had provided documents and a tax audit report, but claimed inadequate guidance led to improper submissions. The CIT(A) dismissed the appeal without proper hearing, relying on the AO's order.
Held
The Tribunal noted that the assessee had provided documentary evidence explaining the source of cash deposits and business expenses, which were also furnished before the AO but seemingly not properly examined. The Tribunal found that these evidences were crucial for proper adjudication and required comprehensive verification.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without providing proper opportunity of hearing and considering the submissions, and whether the additions made by the AO and confirmed by CIT(A) were justified without proper verification of evidence.
Sections Cited
148, 147, 144B, 44AB, 29
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI ARUN KHOPDIA
Per Smt. Beena Pillai, JM: Present appeal filed by the assessee arises out of order dated 26/08/2025 passed by the NFAC, Delhi [hereinafter the “Ld.CIT(A)”] for A.Y. 2020-21 on following grounds of appeal:-
1. 1. 1. 1. 1. 1. “1) Ground No. 1: Violation of Natural Justice On facts and circumstances. Ld. CIT(A) has erred in passing the order without providing proper opportunity of hearing to the appellant. Said addition confirmed is bad in law and liable to be deleted as order is passed without opportunity of being heard and violating the principles of natural justice. 2) Ground No. 2: Addition of Rs. 57,44,294/- on account of business income under the head Profits and Gains from Business and Profession' On facts and circumstances, Ld. CIT(A) has erred in giving direction to AO to verify documents and quantify the unexplained income, if any before giving effect to the CIT(A)'s Order. Such direction by Ld. CIT(A) is bad in law and erroneous in facts and thereby Ld. CIT(A) be directed to delete the addition of Rs. 57,44,294/-.
Ground No. 3: Addition made without considering submissions filed by the appellant before lower authorities On facts and circumstances, Ld. CIT(A) has erred in confirming the action of Ld. Assessing Officer which is passed without considering the submissions of appellant which was duly made in assessment proceedings. Such action of lower authorities is bad in law and erroneous in facts and opportunity to the appellant be given afresh. The Appellant craves leave to add, alter, rescind or amend any of the above grounds of appeal
.”
2. The Ld. AR submitted that the assessee is an individual carrying on proprietary business as a commission agent (Kachha Arahtia) in onions, potatoes and garlic and is duly registered with the Mumbai Agricultural Produce Market Committee under the Maharashtra Agricultural Produce Marketing (Development and Regulation) Act, 1963. He submitted that the assessment was reopened u/s 148 on the allegation that income to the extent of 10% of total cash deposits in the bank had escaped assessment. The Ld. AO rejected the books of account and estimated income at 8% of the total bank credits and made an addition of ₹57,44,294 by passing an order u/s 147 r.w.s. 144B. The Ld. AR further submitted that before the Ld. AO, the assessee had furnished the documents as advised by his earlier tax consultant, including the tax audit report u/s 44AB. However, the assessee subsequently realized that he was not properly advised and, due to lack of knowledge and inappropriate guidance from the earlier consultant, proper submissions and evidences could not be placed on record to substantiate his case. The ld.AO thus made addition in the hands of the assessee.
Aggrieved by the order of Ld.AO, the assessee preferred appeal before Ld.CIT(A)
It was submitted that before the Ld.CIT(A), the assessee had filed written submissions. However, the Ld.CIT(A), without considering the submissions and without granting any effective opportunity of hearing, dismissed the appeal. The Ld. AR pointed out that the Ld.CIT(A) had issued only two hearing notices dated 09/07/2025 and 22/08/2025. For the second notice, the assessee was given only three days’ time to respond, i.e., up to 25/08/2025, and the order was passed on 26/08/2025 itself. Due to paucity of time, the assessee could not submit all relevant details and evidences.
Aggrieved by the order of Ld.CIT(A) assessee is in appeal before this Tribunal
The Ld. AR submitted that the assessee has filed detailed additional evidence explaining the source of cash deposits, including cash book details, invoice-wise cash deposit particulars, corresponding consignment copies, and sample supporting documents relating to profit and loss expenses. He further submitted that PAN and address details of the farmers concerned have also been furnished as part of the additional evidence. It was contended that these evidences are vital and go to the root of the matter for proper adjudication of the issues involved and, therefore, deserve to be admitted. The Ld. AR placed reliance on Rule 29 of the Income Tax Appellate Tribunal Rules, 1963, and submitted that the Tribunal has wide powers to admit additional evidence where it is necessary for rendering substantial justice. In support of this contention, reliance was placed on the decision of the Hon’ble Bombay High Court in the case of Pr. CIT vs. 4.1. He emphasized that no effective opportunity was granted to the assessee to explain the additions made by the Ld. AO and that the Ld.CIT(A) passed the order without raising any specific query or doubt on the submissions filed. It was contended that the impugned order is not a proper speaking order and is in violation of the principles of natural justice.
4.2. The Ld.DR, on the contrary opposed the submissions filed by assessee, however, argued that in the event the additional evidence are considered, the same may be remanded for necessary verification.
We have perused the submissions advanced by both sides in light of the record placed before us.
It is observed that the assessee had furnished documentary evidence explaining the source of cash deposits, including cash book details, invoice-wise particulars, consignment copies, and supporting documents relating to business expenses along with PAN and address details of the concerned parties. From the record, it is evident that most of these documents were also furnished before the Ld. AO during the assessment proceedings. However, the same do not appear to have been properly examined or taken into cognizance by the authorities below while passing the impugned order.
It is noted that, the nature of the additions made and the fact that the evidences furnished, go to the root of the matter and verification of the same are essential for proper adjudication of the issues involved. We are of the view that these materials/evidences require comprehensive verification.
5.2. Therefore, in the interest of substantial justice and fair play, and without expressing any opinion on the merits of the case, we deem it appropriate to set aside the impugned order and restore the matter to the file of the Ld. AO for fresh adjudication. The Ld. AO is directed to examine all the evidences furnished by the assessee, including the additional evidence placed before us, and decide the issues afresh in accordance with law after granting the assessee adequate opportunity of being heard. The assessee is also directed to fully cooperate and furnish all necessary details as may be called for.
Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
In the result, appeal filed by assessee stands allowed for statistical purposes.
Order pronounced in the open court on 13/02/2026