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Facts
The assessee's bank account was allegedly misused by a broker for transactions, leading to additions under Section 68 of the Income Tax Act. The assessment was reopened under Section 147, and the CIT(A) passed an ex-parte order upholding the additions without providing sufficient opportunity to the assessee.
Held
The tribunal set aside the CIT(A)'s ex-parte order and remitted the matter back to the Assessing Officer for fresh adjudication. It was held that the assessee was not given a sufficient opportunity to be heard, violating principles of natural justice, and the Assessing Officer must pass a speaking order after hearing the assessee.
Key Issues
The key legal issues are the validity of the ex-parte order by CIT(A), the validity of the reopening of assessment, and the additions made under Section 68 due to alleged misuse of the bank account by a broker.
Sections Cited
Section 68, Section 147, Section 250, Section 144B
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Income Tax Appellate Tribunal, “SMC”
Before: DR. ARJUN LAL SAINI
सुनवाई क� तार�ख/Date of Hearing : 23/10/2025 घोषणा क� तार�ख/Date of Pronouncement : 15/01/2026 आदेश/ORDER Per, Dr. Arjun Lal Saini, A.M:
Captioned appeal filed by the assessee, pertaining to Assessment Year 2015- 16, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") by National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals) (CIT(A)'), dated 29.07.2025, which in turn arises out of an assessment order passed by the Assessing Officer u/s. 147 r.w.s. 144B of the Act, on 14.05.2023.
Grounds of appeal
raised by the assessee are as follows:
1. Ld. CIT(A) erred in law as well as on facts in passing the order u/s 250 of the Income Tax Act, 1961, which is bad in law and without appropriate jurisdiction.
2. Ld. CIT(A) erred in law as well as on facts in passing the order in ex-parte, which is bad in law and without appropriate jurisdiction.
3. Ld. AO erred in law as well as on facts in reopening the assessment, which is bad in law and without appropriate jurisdiction. Ld. CIT(A) erred in law as well as on facts in upholding the validity of the same.
4. Ld. AO erred in law as well as on facts in making addition of sum of Rs. 31,90,000/- by invoking provision of section 68 of the Act. Ld. CIT(A) erred in law as well as on facts in upholding the same.
5. Ld. AO erred in law as well as on facts in making addition of Rs. 7,03,327/-u/s. 68 of the Act. Ld. CIT(A) erred in law as well as on facts in upholding the same.
6. Ld. CIT(A) erred in law as well as on facts that account of the appellant was misused and managed by the broker and not by appellant himself and consequently the additions ought to have been made in the hands of the broker and not in the hands of the appellant.
3. At the outset, learned Counsel for the assessee submitted that bank account of the assessee was used by the broker illegally and whatever transactions are there, in the bank account, belong to the Broker and not the assessee. Since the assessee could not appear before lower authorities, ( neither before the CIT(A), nor before the assessing officer) therefore, an opportunity should be given to the assessee to explain these facts before the assessing officer. Apart from this, the assessee wants to submit relevant documents and evidences to prove the fact that the bank account of the assessee was illegally used by broker without informing to the assessee, therefore matter may be restored back to the file of the assessing officer for fresh adjudication.
The ld. DR for the Revenue debarred from objecting the stand of the ld. Counsel.
I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. I note that in the assessee’s case under consideration, the assessment was carried out u/s 147 of the Act and the impugned order passed by the ld. CIT(A), is an ex parte order and non- speaking order, therefore, I do not wish to make any comments on the merits of the grounds raised by the assessee. Considering the above facts, I note that assessee has not given sufficient opportunity of being heard and could not plead his case successfully before the ld. CIT(A). I note that the ld. CIT(A) did not discuss the assessee’s case on merits based on the material available before him hence it is a violation of principle of natural justice. I note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, I restore the matter back to the file of assessing officer for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, I deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the assessing officer to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 15/01/2026.