INCOMETAX OFFICER-42(1)(3), MUMBAI, MUMBAI V. NIPUL SURESHCHANDRA MEHTA, MUMBAI

ITA 4291/MUM/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre, which had deleted an addition made by the Assessing Officer (AO) under section 69A of the Income Tax Act, 1961. The addition pertained to unexplained money amounting to Rs. 1,20,6,499, which was identified as unexplained credit deposits in the bank account of the assessee, Nipul Sureshchandra Mehta, for the Assessment Year 2017-18. The AO had passed an assessment order under section 144 read with section 142(1) of the Act due to non-compliance by the assessee. However, the CIT(A) deleted the addition after considering submissions and evidence provided by the assessee, which were not previously submitted to the AO. The Revenue contended that this procedure violated Rule 46A of the Income Tax Rules, 1963, as the new evidence was not examined by the AO.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831001 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 28-06-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI; LD
• Assessee Lawyers: SANJAY A. THAKKAR; KAUSTUBH KARKHANIS
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 144; 142(1)

Judgement Text

" आयकर अपीलीय अिधकरण Ɋाय पीठ मुंबई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JM & SHRI ARUN KHODPIA, AM I.T.A. No. 4291/Mum/2025 (Assessment Year: 2017-18) ITO-42(1)(3), Room No. 735, 7th Floor, Kautilya Bhavan, C-41 to C-45, G Block, Bandra Kurla Complex, Bandra (E), Mumbai-400051. Vs. Nipul Sureshchandra Mehta, A-13, Chandra Darshan, Kandivali (East), Mumbai - 400101 PAN: AJKPM2089E Revenue -अपीलाथŎ / Appellant : Assessee - ŮȑथŎ / Respondent Assessee by : Shri Sanjay A. Thakkar & Shri Kaustubh Karkhanis, AR Revenue by : Shri Leyaqat Ali Aafaqui, Sr. DR Date of Hearing : 06.01.2026 Date of Pronouncement : 19.01.2026 O R D E R Per Arun Khodpia, AM: The captioned appeal is preferred by Revenue to assail the order of Commissioner of Income Tax(Appeals) / National Faceless Appeal Centre (NFAC) (for short “The Ld. CIT(A)”), dated 26.05.2025, for the Assessment Year (AY) 2017-18, arises from assessment order passed u/s 144 r.w.s. 142(1) of Income Tax Act, 1961 (for short “The Act”), dated 06/12/2019, by ITO- 33(2)(4), Mumbai. Printed from counselvise.com ITA No.4291/Mum/2025 Nipul Sureshchandra Mehta 2 2. The grounds of appeal raised by the Revenue are as under: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 1,20,6,499/- as unexplained money u/s. 69A of the I.T. Act, 1961 by the AO in respect of total credit deposits in the bank account of the assessee. 3. In this matter the assessment was passed on 06.12.2019 under section 144 of the Act, wherein the assessee was totally non-compliant, however before the ld. CIT(A), assessee had made submissions including evidence and information, accordingly, the addition made by ld. AO under section 69A of the Act was deleted by the ld. CIT(A) after discussing such details and explanations. The revenue has raised the grievance that the entire submissions are first time made before the ld. CIT(A), which were never shared with the Ld. AO seeking his comments under a remand report. It was, thus, a violation and grave ignorance of provisions of Rule 46A of the Income Tax Rules, 1963. Under such circumstances the matter needs to be re-visited by the Ld. AO, so that the evidence, information and submissions furnished can be looked into, examined and commented by the AO to reach on a logical conclusion. 4. In response to the aforesaid submissions on behalf of the revenue by ld. Sr. DR, ld. AR of the assessee submitted that there might be some reference to Ld. AO about the information first time furnished before the ld. CIT(A), though nothing is emanating from the order of ld. CIT(A). Further, Ld AR, confirmed that there was no communication by ld. AO qua the remand proceedings, therefore the assessee is not in a position to explain, whether Printed from counselvise.com ITA No.4291/Mum/2025 Nipul Sureshchandra Mehta 3 remand report was called for from the Ld. AO or not. It is further submitted that the ld. CIT(A) had thoroughly examined the facts, evidence and issue vis a vis documents on record, therefore, the order of ld. CIT(A), which was just and under proper appreciation facts, deserved to be upheld. 5. We have considered the rival submissions and perused the material available on record and the orders of revenue authorities. Admittedly, in present case the compliance of Rule 46A was found to be ignored by the ld. CIT(A), further there is nothing on record to suggest that the Ld. AO has examined all such documents, which are first time produced before the ld. CIT(A). From such facts and circumstances, it can be construed that the principle of natural justice, in terms of compliance of Rule 46A was violated at the end of Ld. CIT(A). We thus are of considered view that matter shall be re- visited by the AO in the interest of substantial justice, and rightly so, agreed by both the parties also. Accordingly, the matter is restored back to the file of Ld. AO for fresh adjudication. 6. Needless to say, the assessee shall be provided with reasonable opportunity of being heard. The assessee is directed to co-operate in the set aside proceedings before the Ld. AO, without any fail, else the Ld. AO would be at liberty to decide the issue in accordance with the mandate of law. Printed from counselvise.com ITA No.4291/Mum/2025 Nipul Sureshchandra Mehta 4 7. In result, appeal of revenue is allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the open court on 19-01-2026. Sd/- Sd/- (PAWAN SINGH) (ARUN KHODPIA) Judicial Member Accountant Member Mumbai, Dated : 19-01-2026. *SK, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "