ROHIT DARAK,INDORE vs. ACIT CENTRAL-2, BHOPAL, BHOPAL

Per Bench:

This Bunch of 06 appeals has been filed by the Assesse

under section 253 of the income tax Act 1961 [herein after

referred to as the Act for sake of brevity] before this tribunal

as & by way of a second Appeal. The Assessee is aggrieved by

the order bearing Number:-CIT(A)-3, Bhopal

/IT/10134/2012-13,10314/2013-14,12130/2015-16, 13014

/2016-17, 12326/2017-18, 11937/2018-19 dated

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13.12.2024 Passed by the Ld. CIT(A) u/s 250 of the Act,

which is herein after referred to as the “ Impugned order”.

The Relevant Assessment years’ involved in above six

appeals are A.Y. 2013-14, 2014-15, 2016-17, 2017-18,2018-

19 & 2019-20 & the corresponding previous year periods are

from 01.04.2012 to 31.03.2019 respectively for the aforesaid

assessment year including the A.Y.2019-20 [A.Y.2015-16 is

not there corresponding to previous year 01.04.2014 to

31.03.2015] as no additions are made in that A.Y.

2.1 Factual Matrix

That-as and by way of an Assessment order made u/s 153A

rws 144 of the Act- for the A.Ys. 2013-14 to 2018-19 &

143(3) for A.Y.2019-20 the total income of the assessee was

computed & assessed as per the following the

chart/schedule on page 14 & 15 of the “consolidated

Assessment Order”, we reproduce the same as under:

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The aforesaid consolidated assessment order is dated

17.06.2021 which is hereinafter referred to as the

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“consolidated Impugned Assessment Order”. [For the

A.Y.2015-16 no addition is made.]

2.2 The facts of the case in brief as per the records are as

under as per the say of the assessee which is stated in

form No.35 which we reproduce as under:-

“Search u/s. 132 was conducted at residential premises of assessee on 16/05/2018. In response to notice u/s. 153A for the said year assessee duly filed the return of income u/s. 153A. Notice u/s. 143(2) dated 05/03/2021 and notice u/s.142(1) was issued on 19/02/2021. That due to covid epidemic in the month of March, April, May and part of June 2021 assessee could not responded the questionnaire. However, assessee vide letter dated 05/12/2020 has requested Ld.AO to provide the copies of statements of the assessee, incriminating documents relied upon by Ld. AO, other documents which have bearing in this matter etc. Ld. AO has not provided these documents to assessee till date. Ld. AO issued show cause notice u/s. 144 of the I.T. Act dated 28/05/2021 to assessee and asked to comply the same on or before 02/06/2021 during the full fledged lock down due to Covid 19 across the state. In absence of documents requested for and lock down across the state, assessee could not respond to this show cause notice u/s. 144 too. It is worth noting that assessee and his tax counsel are based at Indore while Ld. AO was based at Bhopal.Ld. AO alleged in the assessment order passed that assessee has earned commission at the rate of 2.5 percent of the total amount of accommodation entries provided by the companies of the assessee/related to the assessee during the year under consideration. The amount of commission at the rate of 2.5 percent determined by Ld. AO to Rs. 67500/-. Then Ld. AO went on to add Rs. 67500/- in the returned income of the assessee u/s. 69A of the I.T. Act, 1961 vide impugned assessment order dated 17/06/2021 in an arbitrary manner and against the principle of natural justice since the same has been added without affording any opportunity of being heard to the assessee. The said order passed by Ld. AO is illegal and liable to be struck down and therefore is this appeal.”

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2.3 That the Assessee being aggrieved by the aforesaid

“Consolidated Impugned Assessment order” Prefers the

first Appeal u/s 246A of the Act before the Ld. CIT(A) who

by the “Impugned order” has dismissed the first Appeal of

the Assessee on the grounds & reasons stated therein. The

core grounds & reasons for the dismissal of the first appeal

was as under:-

“3. After taking into consideration the AO's findings, and the facts of the case the issues involved in appeal are discussed and decided as under:

3.1 Ground no. 1 for AY 2013-14, 2014-15 and 2016-17 to 2019- 20:- Through these grounds of appeal, the appellant has challenged the income determined by the AO as against the returned income and accordingly denies his liability to pay tax, cess and interest demanded thereon. Since, the addition made by the AO has been dealt separately and therefore, this ground does not require any adjudication at this stage.

3.2. Ground No. 2.3 and 6 for AY 2013-14, 2014-15 and 2016-17 to 2019-20:- Through these grounds of appeal the appellant has challenged that the assessment order passed by the Ld. AO is bad in law, without jurisdiction and having no Incriminating material found as a result of search action. 3.2.1. I have considered the facts and circumstances of the assessment order and the case and the grounds of appeal filed by the appellant. The above grounds of appeal are considered together as they are similar in nature.

I have perused the para 2, 3, 4, 5,6,7 and 8 of the assessment order where I have found that the AO has discussed the issues emanating from search and seizure action Various bank accounts based on information unearthed during the search and survey action on Daraks have been confronted to the appellant for explanation but he failed to comply to the notices repeatedly. The

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AO had issued final show cause too for assessing the case u/s 144 of the Act.

I find that the AO has correctly assumed the jurisdiction of the case and statutory notices have been issued correctly and timely manner. The AO has very clearly mentioned that the enquiries of bank accounts post search had been carried out based on search action only. Therefore, the claim of the appellant that no incriminating material was found is baseless and incorrect. I find in the assessment order enough reasons to initiate proceedings u/s 153A of the Act which is valid and as per law for (AY 13-14, 14-15, 16-17, 17-18, and 18-19) and u/s 144 of the Act (AY 19- 20).

3.2.2 Accordingly, the grounds of appeal raised are dismissed.

3.3 Ground No. 4 and 5 for AY 2013-14, 2014-15 and 2016-17 to 2019-20: Through these grounds of appeal the appellant has challenged the various additions made on account of unexplained money u/s 69A of the IT Act, 1961 for the relevant AYs.

3.3.1 I have considered the facts and circumstances of the assessment order and the case and the grounds of appeal filed by the appellant. The above grounds of appeal are considered together as they are similar in nature.

The AO has discussed the issue of addition on account of accommodation entries at para 10 of the order. Based on seized material and the post search enquiries the AO has computed the amounts credited in the different bank accounts in AY 13-14, 14- 15, 16-17, 17-18. 18-19 and 19-20. The appellant is a member of Darak family and had been involved in providing accommodation entries to various beneficiaries in different years. The AO has heid that his bank accounts have been used to carry out transactions for providing accommodation entries and computed 2.5% on the amount of transaction appearing in such bank accounts as commission income of the appellant in different AYs. The AO has taken the extracts of decision in the case of Sharad Darak where addition at the rate of 2.5 percent of the total accommodation entry as commission income for relevant AY had been made. It is also mentioned that the same had been confronted to the appellant but no reply was fled inspite of numerous opportunities. Therefore, it was assumed that appellant has nothing to say in this matter. The AO therefore had held the commission income from such transaction (2.5% of gross receipts in bank accounts of

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the appellant) to be undisclosed ones and treated the same as appellants undisclosed money ufs 69A in different AYs.

I find that there is no further submission made by the appellant before me apart from filing the grounds of appeal. It is very surprising that the appellant has just filed the appeals before me but is not interested in attending hearing or furnishing any reply before the AO or me.

I also find the ground that natural justice has not been rendered to the appellant during assessment to be totally untrue and mischievous as it is the appellant who needs to attend the hearings and comply with the notices. I find the track record of appellant and other entities of Darak to be very poor in compliance and appears to be part of their strategy during appeal and assessment proceedings.

3.3.2 Based on above discussion, the grounds of appeals are dismissed and the additions of undisclosed money u/s 69A of the Act made in AY 2013-14, 2014-15 and 2016-17 to 2019-20 are confirmed.

3.4 Ground No. 7 for AY 2013-14, 2014-15 and 2016-17 to 2018- 19: Through these grounds of appeal the appellant has challenged that the AO has passed the assessment order without obtaining valid approval u/s 153D of the IT Act.

3.4.1 I don't find any truth in this ground of appeal as the AO has mentioned in last para of the order about the said approval of the assessment order being given by the JCIT. The ground of appeal is dismissed. 3.5. Ground No. 8 for AYs (2013-14, 2014-15 and 2016-17 to 2018-19) and Ground.no. 7. for 2019-20 Through this ground of appeal, the appellant has challenged the charging of Interest under various provisions of Act. It is settled position of law that charging of interest is mandatory and consequential in nature as held by Hon'ble Supreme Court in the case of CIT v/s Anjum M.H. Ghaswala 252 ITR 1(SC), However, the AO is directed to recalculate the correct Interest while giving effect to this order. Thus, appeal on this ground is allowed for statistical purpose.

3.6 Ground No. 9 for AYs (2013-14, 2014-15 and 2016-17 to 2018-19) and Ground no. 8 for 2019-20: Being general in nature this ground needs not any special adjudication.

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2.4 That the Assessee being aggrieved by the “Impugned

order” has preferred the instant second Appeal before this

tribunal & has raised the following grounds of Appeal in the

Form No. 36 of A.Y. 2013-14 against the “Impugned order”

which are as under:-

“1.That having regard to the facts and circumstances of the case Ld. AO has erred in law and on facts in making addition and Ld. CIT(A) has erred in confirming addition of Rs. 67,500 as Unexplained money U/s 69A of Income Tax Act, 1961 in the form of commission income alleged to be received for arranging accommodation entries. 2. That Ld. CIT (A)-3, Bhopal has erred in confirming the addition made by Ld. AO without considering the detailed written submissions along with documentary evidences filed by the appellant during the course of first appeal proceedings and therefore the impugned order is illegal and bad in law. 3. That the appellant craves leave to add, amend, alter or delete all or any of the grounds of appeal and all the above grounds are mutually exclusive to each other.” Similar grounds have been raised for other years with change

of figures.

3.1 The Hearing in the matter took place before this

tribunal on 15.01.2026 when the Ld. AR for & on behalf of

the Assessee appeared before us & Interalia contended that

the “Impugned order” is illegal, bad in Law & not Proper. It

is in the violation of the Principles of natural justice too. It

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thus deserves to be set aside. A paper book containing pages

1 to 108 is placed on record of this Tribunal. The Ld. AR for

& on behalf of the assessee submitted that “Consolidated

Impugned Assessment Order” is under section 144 of the

Act. In the unnumbered para on page 1 of the consolidated

impugned assessment order” it is recorded that the search

u/s 132 of the IT Act, 1961 was conducted at the residential

premises of the assessee as well as on the premises of

other concerns / business associates on 16.05.2018 in

pursuance of the warrant of authorization u/s 132 of the I.T.

Act dated 14.05.2018 issued by the comptentn authority.

Since, various financial activities and transactions executed

by assessee are related and have business associations with

group, hence, they have been put together under one

common name: "Asnani Group".

3.2 In the “ Consolidated impugned Assessment Order” at

para 2 it is recorded as under:-

“2. E-notices as well as hard copies of notice u/s 153A for A.Y. 2013-14 το Α.Υ. 2018-19 was issued on 30.01.2020 and notice u/s 142(1) of the 1.T. Act was issued on 04.03.2020 by the then Assessing Officer and served on the assessee to file the returns for assessment years as mentioned above. In response, the

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assessee did not file the return, hence, show cause notices us 276CC were issued to the assessee on 29.02.2020. In response to this, assessee has stated that "I have no knowledge for the notice and filing of return u's 1534 because i have not received any physically notice w's 1534, 1 have received directly show cause notice w 276CC of the Income Tax Act, 1961on 05.03.2020 In response to his above reply, an e-mail was sent to assessce to allow him to collect copies of documents on or before 13.03.2020 and file return on or before 17.03.2020. The assesser neither collected documents nor filed return, hence, again show cause notices uls 276CC were issued on 14.05.2020 asking assessee to file return before 22.05.2020. However, the assessee again failed to file ITR for the years under consideration.”

The above two paragraphs (supra) were read out by the Ld.

AR & it was emphatically contended that e-mail dated

13.03.2020 was not received by the assessee. It was also

urged that no incriminating documents were found &

nothing was provided to the assessee to set up his

defences. The Ld. AR contended basis para 3 of the

“consolidated Impugned Assessment Order” that vide

letter dated 15.12.2020 the assessee reiterated that vide the

earlier letter dated 05.12.2020. Copies of statements, relied

upon documents & other relevant information were sought,

we once request the department to provide

information/documents as is sought.

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3.3. The Ld. AR then read out following paragraphs from the

“Consolidated Impugned Assessment Order” which we

reproduce as below:-

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3.4 During the course of the hearing the Ld. AR read out

page 11 & 12 of the “Consolidated Impugned Assessment

Order”. Basis page 13 it was contended that seized material

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is of Shri Sharad Darak who is not the present assessee.

No material documents were provided to the assessee. There

is no material against the assessee. In the absence of

incriminating material additions cannot be made. Reliance

was placed on the Apex court judgment in case of Abhisar

Buildwell. In was submitted that no other additions can be

made too. In so far as the “Impugned Order” of the Ld.

CIT(A) is concerned it was stated that the issue of no

incriminating material was found against the assessee as a

result of search was raised as ground no.3 (A.Y. 2013-14)

& no adversarial material was shared by the department

to the assessee. It was therefore, submitted that the

“consolidated Impugned Assessment Order” was bad in

law, illegal & Ld. CIT(A) has erred in law in upholding the

same. The reliance was placed on page 1 of PB [A.Y.2013-14]

which is e-acknowledgment for written submission dated

04.01.2024 which was filed before the Ld. CIT(A) along

with Annexure -1 & Annexure -2. Simultaneously the

attention was invited to the internal page 14 of the

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“Impugned Order” were in it is wrongly recorded by the Ld.

CIT(A) that no submission is made apart from filing the

ground of appeal. Our attention was invited to page 11 of the

P.B. too & internal page 14 of the Impugned Order. [para

3.3.2]. Per contra the Ld. DR appearing for & on behalf of the

“Consolidated Impugned revenue submitting that the

Assessment Order” & Impugned Order” are correctly

passed & relied upon it. [In these appeals the Ld. DR has

made common submission as other connected group matter

covered by ITANo.181 to 186/Ind/2025 were listed & heard

all together on 15.01.2026]. The Ld. DR finally prayed that

the impugned order be upheld. The hearing was then

concluded.

4.1 We have to decide the legality, validity and proprietary of

the “impugned order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

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4.3 We basis records of the case & after hearing & upon

examining the contentions are of the considered view that

the “ Consolidated Impugned Assessment Order” is under

section 144 of the Act & the matter has not been

adjudicated & adjudged basis merits. Even the “Impugned

Order is not on merits. This Tribunal desires that the total

income of the assesseee should be computed & assessed on

the real time basis exigible to tax in accordance with law by

following the due process of law prescribed under the Act.

This tribunal also expects the assessee to be compliant &

should cooperate with the department of income tax as &

when notice(s) summons, etc. are issued to him/them. In

brief this Tribunal desires the meritorious disposal of both

the “consolidated Impugned Assessment Order” as well as

the “Impugned Order”. The assessee cannot go in slumber

mode. In the result we are of the considered opinion that the

“Impugned Order” should be set aside & the matter should

be remanded back to the file of the Ld. AO for passing a

fresh order on merits of the case. It is the expectation of this

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Tribunal that the assessee would give his full & complete

details about his income. The assessee shall file the

necessary & requisite replies. The assessee to attend the

hearing as & when fixed by the Ld. AO & is directed not to

seek any adjournments on any flimsy, grounds. The assessee

to file reply submission & to provide all such details as may

be sought by the Ld. AO while adjudicating & adjudging the

case a fresh on denovo basis. The assessee to cooperate with

the department in every manner possible so that department

time, money, energy resources are not wasted in repeated

manner time & again. Due to non cooperative attitude not

only the assessee suffer but national resources are wasted.

Economy of the nation suffers. Systems get’s clogged.

Needless to state that taxes are required to paid according to

law simultaneously no tax should be levyed & collected save

& except according to law. The department to ensure that all

the material, which are adversarial to the assessee is

disclosed before any adjudication & adjudgement is made by

the lower authorities. The principles of natural justice

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requires disclosure of all adversarial material which is going

to be used against the assessee is disclosed to him. Copy of

statements, panchanama, etc. too should be disclosed to the

assessee. The assessee in this regard too should be prompt

in seeking such documents. It is equal responsibility of the

assessee & the revenue. The issue of blame culture should

be avoided as none benefits out of it. The resources & system

suffers in the ultimate analysis of things.

4.4 In view of the premises, drawn up by us, we set aside the

“Impugned Order” & remand the case back to the file of the

Ld. AO on denovo basis, who shall now pass a speaking &

reasoned order on merits of the case. In order to straighten

the record we hold that all the necessary statements papers,

documents, material etc, are now available with the assessee

as stated by the Ld. AR during the course of hearing held

before us & the assessee now on wards will not make any

grievances about the non supply of documents, incriminating

material etc. before tax authorities. The lower authority is

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also directed to deal with the submissions of the assessee

according to law.

5.1 In the result, the “Impugned order” is set aside as & by

way of remand back to the file of the Ld. AO on denovo basis with

directions as aforesaid.

5.2 The appeal of the assessee is allowed for statistical purpose.

5.3 In the ITANo.100, 101,102,103 & 104/Ind/2025 the facts &

circumstances are almost identical & similar. Therefore, our

findings in ITANo.99/Ind/2025 would apply mutatis mutandis to

these appeals also with the counsel of the parties all appeals

were heard together.

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5.4 In the final result & conclusions all the six appeals are

allowed for statistical purposes.

Order pronounced in open court on 30.01.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 30/01/2026 Patel/Sr. PS ; Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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