RAHUL JAIN,INDORE vs. ITO WARD-1, MORENA, MORENA
Facts
The assessee failed to file income tax returns for AY 2017-18. The Assessing Officer (AO) noticed unexplained cash deposits of Rs. 12,63,000 and other credits totaling Rs. 74,62,000 in the assessee's bank account during the demonetization period. The AO also added Rs. 40,500 as business income. Despite notices, the assessee did not provide satisfactory explanations.
Held
The Tribunal noted that the CIT(Appeals) dismissed the assessee's appeal ex parte without substantial discussion on merits, which violated principles of natural justice. The Tribunal condoned the delay in filing the appeal and decided to remit the matter back to the AO for a fresh adjudication after providing the assessee with an opportunity of being heard.
Key Issues
Whether the CIT(Appeals) order is sustainable as it was passed ex parte without proper adjudication, and if the matter should be remanded to the Assessing Officer for fresh assessment.
Sections Cited
250, 144, 271AAC(1), 142(1), 133(6), 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI S. RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 420 & 421/Agr/2025 Assessment Year: 2017-18
Rahul Jain, M/s. Ankita Sales Vs. Income-tax Officer, Agencies, Sadar Bazar, Porsa, Ward 1, Morena. Morena (MP). PAN :ABCPJ3801H (Appellant) (Respondent)
Assessee by None Department by Sh. Shailendra Srivastava, Sr. DR
Date of hearing 16.10.2025 Date of pronouncement 26.11.2025
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
These appeals have been preferred by assessee against separate impugned orders each dated 29.08.2024 passed in Appeal No.
NFAC/2016-17/10254463 and NFAC/2016-17/10254462 by the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the
assessment year 2017-18, wherein the ld. CIT(Appeals) has dismissed assessee’s first appeals, confirming the assessment order dated
ITA No. 420 & 421/Agr/2025
06.12.2019 passed u/s. 144 of the Act and affirming the penalty order dated
17.02.2022 passed u/s. 271AAC(1) of the Act.
Since, the penalty order passed u/s. 271AAC(1) of the Act is
consequential to the assessment order, both these appeals are being
disposed of by the consolidated order for the sake of convenience and
brevity. The facts of ITA No. 420/Agr/2025 only are being narrated as
under:
At the very outset, it is noted that both these appeals were filed on
27.08.2025 against the impugned orders each dated 29.08.2024 by a delay
of 301 days each. In order to avoid further delay and to ensure expeditious
disposal of these cases, we take note of the well established principle of
law that the substantial justice cannot be denied on technical aberrations.
In an adversial justice system like ours, no party should ordinarily be denied
the opportunity of participating in the process of justice dispensation.
Justice is the goal of jurisprudence. Any interpretation which eludes or
frustrates the recipient of justice, is not to be followed. The object of
prescribing certain time period for filing an appeal is to expedite the
proceedings before the concerned authorities and to advance the cause of
justice. Accordingly, we condone the delay caused in filing both these
appeals before the Tribunal.
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ITA No. 420 & 421/Agr/2025
ITA No. 420/Agr/2025:
Briefly stating, the facts are that the assessee did not file any return of
income for A.Y. 2017-18. Based on the information gathered by
department, the Assessing Officer noticed that the assessee had deposited cash to the tune of Rs.12,63,000/- in his SBI, Porsa Bank account No.
630247836544 maintained with State Bank of India during demonetization period (from 9th November, 2016 to 30th December, 2016). Statutory notice u/s. 142(1) of the Act was issued to the assessee on various occasions, but
the assessee failed to furnish the required details/reply. After examining the
bank statements furnished by the concerned bank in response to notice u/s. 133(6), the Assessing Officer calculated the cash deposit and/or credits
made during the F.Y. 2016-17 at Rs.74,62,000/- in the aforesaid account of
the assessee. Thereafter various statutory notices u/s. 142(1) and show cause notice, as tabulated by Assessing Officer at page 5 of the
assessment order, were also issued to the appellant assessee, requiring
him to explain the source and nature of cash deposits and credits in the said bank account, but no compliance was made on behalf of the
assessee. Assessing Officer, thus, made addition of Rs.74,62,000/- as
unexplained money u/s. 69A r.w.s. 115BBE of the Act. The Assessing Officer further noticed that an amount of Rs.6,75,000/- was credited in
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assessee’s bank account by way of RTGS/FEGT etc. during F.Y. 2016-17,
which was treated as business receipts of assessee and profit on such
receipts @ 6% amounting to Rs.40,500/- was added as business income of
the assessee. Accordingly, total income of assessee was assessed at
Rs.75,02,500/-, vide assessment order dated 06.12.2019 passed u/s. 144
of the Act.
Aggrieved, assessee preferred an appeal before learned
CIT(Appeals), who dismissed assessee’s first appeal ex parte for want of
any submission made by assessee in the first appellate proceedings.
Assessee has approached this Tribunal in second appeal on the
ground, in addition to others, that the impugned order is not sustainable,
having been passed against the principles of natural justice and fair play.
Perused the records. None is present on behalf of the assessee.
Heard learned Sr. DR for revenue.
Perusal of the impugned order shows that the ld. CIT(Appeals) had
issued various notices on 15.04.2024, 24.04.2024, 03.05.2024, 10.05.2024,
21.05.2024, 30.05.2024 and final show cause notices on 03.07.2024 and
23.08.2024, but the assessee did not file any submission before the first
appellate authority. It is however, noticed that the learned CIT(Appeals) has
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decided assessee’s appeal ex parte without any substantial discussion on
merits, whereas learned CIT(Appeals) was expected to state the points for
determination, decision thereon and the reasons for the decision as
provided u/s. 250(6) of the Act. We further note that the Assessing Officer
has also made best judgment assessment u/s. 144 of the Act, as no
response was filed by appellant assessee in compliance to various notices
issued by Ld. Assessing Officer. Such a non-responsive and reluctant
attitude of the assessee cannot be appreciated. In the totality of facts and
circumstances of the case, we deem it just and appropriate to remit the
matter back to the file of Assessing Officer for passing order afresh after
affording proper opportunity of hearing to the assessee. We further direct
the assessee to be diligent and cooperative in attending the proceedings
and making submissions before the learned Assessing Officer explaining
cash deposits/credits in his bank account, for the expeditious and effective
disposal. Needless to say that learned Assessing Officer shall ensure the
observance of the principles of natural justice. The appeal is, thus, liable to
be allowed for statistical purposes.
ITA No. 421/Agr/2025:
Since the issue relating to the quantum addition has been remanded
back to the file of the learned Assessing Officer for fresh adjudication, and
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as the present appeal pertains to the penalty imposed under section
271AAC(1) of the Act, which is consequential to the said quantum addition,
we consider it appropriate to remit this penalty matter also to the file of the
learned Assessing Officer for passing order a fresh in accordance with law.
Accordingly, this appeal also deserves to be allowed for statistical
purposes.
10 . In the result, both the appeals ITA No. 420 & 421/Agr/2025 are
allowed for statistical purposes. The impugned orders each dated
29.08.2024 are set aside.
Order pronounced in the open court on 26.11.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 26.11.2025 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
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