FAYAZ AHMAD RATHER,GANDERBAL V. INCOME TAX OFFICER WARD-1, SRINAGAR

ITA 654/ASR/2025

AI Insights

The case involves an appeal by the assessee, Fayaz Ahmad Rather, against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2017-18. The primary grievance was the dismissal of his appeal by the First Appellate Authority for non-prosecution, without a well-reasoned order. The assessee had not filed a return of income, leading the Assessing Officer to complete the assessment ex-parte under Section 144 of the Income-tax Act, 1961, resulting in a total income determination of Rs.23,33,876. The First Appellate Authority upheld this assessment, citing lack of supporting documents for unexplained cash deposits. The Tribunal found the First Appellate Authority's order to be non-speaking and arbitrary, leading to the decision to set aside the order and remand the case for fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 894474 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2026
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 29-09-2026
• Assessment Year: 2017-2018
• Appeal Filed On: 23-08-2025
• Other Referred Cases: Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014]
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: PRASHANT SINGH
• Assessee Lawyers: FAHEEM FERDOUS
• Keywords: Set aside; Business income; Opportunity of being heard; Reasonable cause
• Section: 144; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI GIRISH AGRAWAL, HON’BLE ACCOUNTANT MEMBER ITA 654/ASR/2025 (िनधाŊरण वषŊ/Assessment Year: 2017-18) Fayaz Ahmad Rather Malpora, Ganderbal, Srinagar, Srinagar-191201, Jammu And Kashmir PAN: BLGPR 0922 L Vs. Income Tax Officer Ward-1 ITO Ward-1, Srinagar Srinagar-190001, Jammu And Kashmir Assessee by Shri Faheem Ferdous, Advocate Revenue by Shri Prashant Singh, Sr. DR Date of Hearing 29 / 09 / 2026. Date of Pronouncement 30 / 09 / 2026. ORDER PER: SHRI SAKTIJIT DEY, V.P.: This is an appeal by the assessee against order dated 17.03.2025 of National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2017-18. 2. There is a delay of 84 days in filing the appeal. 3. After considering the submissions of the assessee explaining the cause of delay, we are satisfied that the delay in filing the appeal was due to reasonable cause. Accordingly, we condone the delay and admit the appeal for adjudication on merits. Printed from counselvise.com 2 ITA No. 654/Asr/2025 Asst. Year: 2017-18 The basic grievance of the assessee is against dismissal of his appeal, more or less for non-prosecution, without passing a well-reasoned order. 4. Briefly stated, the assessee is a resident individual. For the assessment year under dispute, the assessee did not file any return of income under Section 139(1) of the Income-tax Act, 1961 (in short, “the Act”). Subsequently, the Assessing Officer issued notice under Section 142(1) of the Act, calling upon the assessee to file the return of income within 30 days. However, neither did the assessee file any return of income nor comply with the notice issued under Section 142(1) of the Act. Ultimately, the Assessing Officer proceeded to complete the assessment ex-parte to the best of his judgment, invoking the provisions of Section 144 of the Act. While doing so, he made a couple of additions, resulting in determination of total income at Rs.23,33,876/- 5. Against the assessment order so passed, the assessee preferred appeal before the First Appellate Authority. However, while passing the impugned order, the appeal was dismissed, confirming the addition. 6. We have considered the rival submissions and perused the materials on record. Though, the assessment was completed ex-parte, however, before the First Appellate Authority, the assessee did furnish written submissions challenging the additions made by the Assessing Officer. In fact, in the appellate order, the First Appellate Authority has reproduced full submission made by the assessee. Though, Printed from counselvise.com 3 ITA No. 654/Asr/2025 Asst. Year: 2017-18 the First Appellate Authority has observed that the assessee made partial submissions, however, upon going through the submissions made by the assessee, we find them quite exhaustive. Be that as it may, ultimately, the First Appellate Authority has disposed of the appeal confirming the additions with the following observations: “5.8 I have perused the submissions made by the appellant. The appellant only submitted partial submissions. The appellant has not submitted the supporting documents which can explain the source of cash deposits made by him during the year. Therefore, the cash deposits remained unexplained. 5.9 In view of the above, in the pertaining and circumstances of the case, I find no infirmity in the action of the AO for making addition of cash deposits of Rs. 12,23,250/- and addition of business income of Rs. 11,10,626/- to the total income of the appellant. In this view of the matter, the decision of the AO is upheld. Consequently, the Grounds of the appellant are dismissed. 5.10 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions/disallowances made by the AO is sustained in terms of the observations herein-above.” 7. As could be seen from the aforesaid observations, the ultimate conclusion received by the First Appellate Authority while confirming the addition is bereft of any reasoning, and the order is clearly non-speaking. The First Appellate Authority has not at all adverted to the submissions made by the assessee. Thus, in our view, the impugned order passed by the First Appellate Authority is mechanical and Printed from counselvise.com 4 ITA No. 654/Asr/2025 Asst. Year: 2017-18 arbitrary. Accordingly, we are inclined to set aside the said order and restore the issues raised in the appeal to the Assessing Officer for fresh adjudication, after providing due and reasonable opportunity of being heard to the assessee. 8. In the result, the appeal is allowed for statistical purposes. (Order pronounced in the open court on 30/09/2026) Sd/- Sd/- (Girish Agrawal) (Saktijit Dey) Accountant Member Vice President Dated : /09/2026. Aks/- Printed from counselvise.com 5 ITA No. 654/Asr/2025 Asst. Year: 2017-18 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER, Printed from counselvise.com "