GARG ENTERPRISES,FARIDABAD V. INCOME TAX OFFICER, FARIDABAD

ITA 5176/DEL/2025

AI Insights

The case involves Garg Enterprises appealing against the order of the National Faceless Appeal Centre (NFAC), which arose from an Assessment Order passed under section 143(3) of the Income Tax Act, 1961 by the Income Tax Officer, Ward 1(3), Faridabad. The primary contention was the disallowance of Rs. 1,08,42,850 under section 40A(3) of the Act, due to cash purchases exceeding Rs. 20,000 in a day, which was claimed to be in violation of the Act. The Ld. CIT(A) had dismissed the appeal ex parte without adjudicating on merits, leading to the current appeal for a fresh hearing.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 849050 (ITAT-NEW DELHI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Delhi
• Assessment Year: 2017-2018
• Appeal Filed On: 26-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: DEEPESH GARG
• Keywords: Set aside; Opportunity of being heard
• Section: 143(3); 40A(3)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, E: NEW DELHI BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.- 5176/Del/2025 [Assessment Year: 2017-18] Garg Enterprises, 2D/3BP, Tikona Park, Near Opp. Govt. Boys School, Faridabad, Haryana-121001. Vs Income Tax Officer, Ward 1(3), Faridabad, Haryana-121001. PAN- AANFG9268R Assessee Revenue Assessee by Shri Deepesh Garg, Adv. Revenue by Ms. Ankush Kalra, Sr. DR Date of Hearing 23.03.2026 Date of Pronouncement 23.03.2026 ORDER PER BRAJESH KUMAR SINGH, AM, This appeal by the assessee is directed against the order of National Faceless Appeal Centre (NFAC) [hereinafter referred to as the ‘Ld. CIT(A)] order dated 08.07.2025 arising out of the Assessment Order dated 28.12.2019 passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the ITO-1, Ward- 1(3), Faridabad, (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2017-18. Printed from counselvise.com ITA No.- 5176/Del/2025 Garg Enterprises 2 2. At the outset, the Ld. AR submitted that the assessee could not appear before the Ld. CIT(A) due to the fact that the submissions and the necessary documents could not be prepared for presenting the appeal before the Ld. CIT(A). It was further submitted that the Ld. CIT(A) did not grant adjournment as per the request letter filed by the assessee on 10.06.2025 when the case fix for hearing. Further, it was submitted that the Ld. CIT(A) did not adjudicate the matter on merits and requested that the matter may be set aside to the file of the Ld. CIT(A) for fresh adjudication. 3. On the other hand, the Ld. Sr. DR supported the order of the authorities below. 4. We have heard both the parties and perused the material available on record. In this case, the AO had disallowed a sum of Rs. 1,08,42,850/- u/s 40A(3)of the Act, on account of purchases of products (laptop) in cash from one client exceeding Rs. 20,000/- in a day which was in contravention of the provision of section 40A(3) of the Act. The Ld. CIT(A) dismissed the appeal of the assessee ex parte, and thus, no effective opportunity of being heard was provided to the assessee without allowing adjournment as sought by the assessee. Accordingly, in the interest of justice and to afford one more opportunity to the assessee, we set aside the orders of the Ld. CIT(A) and restore the matter to the file of the Ld. CIT(A) for fresh adjudication, after providing due opportunity of being heard to the assessee and in accordance with law. Printed from counselvise.com ITA No.- 5176/Del/2025 Garg Enterprises 3 5. The assessee is directed to appear during the appellate proceedings and the assessee is also at liberty to submit any details / evidences in support of its claim(s)/ appeal. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 23.03.2026. Sd/- Sd/- [RAJ KUMAR CHAUHAN] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 24.03.2026. Pooja. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, Printed from counselvise.com "