Loading judgment…
Facts
The Revenue appealed against the order of the CIT(A) which deleted an addition of Rs. 1,20,6,499/- made under Section 69A of the IT Act, 1961. The addition was for unexplained credit deposits in the assessee's bank account. The assessment was done ex-parte as the assessee was non-compliant. However, before the CIT(A), the assessee provided submissions and evidence which led to the deletion of the addition.
Held
The Tribunal noted that the assessee's submissions and evidence were presented for the first time before the CIT(A) without being shared with the AO. This was considered a violation of Rule 46A of the Income Tax Rules, 1963, and a breach of the principle of natural justice. Therefore, the Tribunal decided to remand the matter back to the AO for fresh adjudication.
Key Issues
Whether the CIT(A) erred in deleting the addition without ensuring compliance with Rule 46A and the principle of natural justice by not providing the AO an opportunity to examine the evidence presented for the first time.
Sections Cited
69A, 144, 142(1), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI PAWAN SINGH, JM & SHRI ARUN KHODPIA, AM
O R D E R
Per Arun Khodpia, AM:
The captioned appeal is preferred by Revenue to assail the order of Commissioner of Income Tax(Appeals) / National Faceless Appeal Centre (NFAC) (for short “The Ld. CIT(A)”), dated 26.05.2025, for the Assessment Year (AY) 2017-18, arises from assessment order passed u/s 144 r.w.s. 142(1) of Income Tax Act, 1961 (for short “The Act”), dated 06/12/2019, by ITO- 33(2)(4), Mumbai.
1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 1,20,6,499/- as unexplained money u/s. 69A of the I.T. Act, 1961 by the AO in respect of total credit deposits in the bank account of the assessee.
3. In this matter the assessment was passed on 06.12.2019 under section 144 of the Act, wherein the assessee was totally non-compliant, however before the ld. CIT(A), assessee had made submissions including evidence and information, accordingly, the addition made by ld. AO under section 69A of the Act was deleted by the ld. CIT(A) after discussing such details and explanations. The revenue has raised the grievance that the entire submissions are first time made before the ld. CIT(A), which were never shared with the Ld. AO seeking his comments under a remand report. It was, thus, a violation and grave ignorance of provisions of Rule 46A of the Income Tax Rules, 1963. Under such circumstances the matter needs to be re-visited by the Ld. AO, so that the evidence, information and submissions furnished can be looked into, examined and commented by the AO to reach on a logical conclusion.
4. In response to the aforesaid submissions on behalf of the revenue by ld. Sr. DR, ld. AR of the assessee submitted that there might be some reference to Ld. AO about the information first time furnished before the ld. CIT(A), though nothing is emanating from the order of ld. CIT(A). Further, Ld AR, confirmed that there was no communication by ld. AO qua the remand proceedings, therefore the assessee is not in a position to explain, whether 2 Nipul Sureshchandra Mehta remand report was called for from the Ld. AO or not. It is further submitted that the ld. CIT(A) had thoroughly examined the facts, evidence and issue vis a vis documents on record, therefore, the order of ld. CIT(A), which was just and under proper appreciation facts, deserved to be upheld.
We have considered the rival submissions and perused the material available on record and the orders of revenue authorities. Admittedly, in present case the compliance of Rule 46A was found to be ignored by the ld. CIT(A), further there is nothing on record to suggest that the Ld. AO has examined all such documents, which are first time produced before the ld. CIT(A). From such facts and circumstances, it can be construed that the principle of natural justice, in terms of compliance of Rule 46A was violated at the end of Ld. CIT(A). We thus are of considered view that matter shall be re- visited by the AO in the interest of substantial justice, and rightly so, agreed by both the parties also. Accordingly, the matter is restored back to the file of Ld. AO for fresh adjudication.
Needless to say, the assessee shall be provided with reasonable opportunity of being heard. The assessee is directed to co-operate in the set aside proceedings before the Ld. AO, without any fail, else the Ld. AO would be at liberty to decide the issue in accordance with the mandate of law.
In result, appeal of revenue is allowed for statistical purposes in terms of our aforesaid observations.
Order pronounced in the open court on 19-01-2026.