KAKA GOPAL KADAV ,MUMBAI V. ITO WARD 1(1), KALYAN

ITA 1221/MUM/2026

AI Insights

The case involves Kaka Gopal Kadav, an individual engaged in agriculture and distribution of cattle fodder, who appealed against the order of the CIT(A) which dismissed his appeal ex-parte for non-prosecution. The primary contention was the incorrect treatment of cash withdrawals amounting to ₹32,90,000 as unexplained money under section 69A of the Income Tax Act, 1961. The assessee argued that these withdrawals were from explained bank receipts arising from business transactions. The Tribunal found that the CIT(A) erred in dismissing the appeal without adjudicating on merits, which violated the principles of natural justice. The Tribunal also considered the personal hardships faced by the assessee, which affected his ability to comply with notices, and thus decided to restore the matter for a fresh hearing.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846087 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2019-2020
• Appeal Filed On: 03-02-2026
• Other Referred Cases: CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC), CIT vs. Ansal Housing Finance & Leasing Co. Ltd. (2013) 354 ITR 180 (Del), Collector, Land Acquisition vs. Mst. Katiji (1987) 167 ITR 471 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ADITYA RAI
• Assessee Lawyers: AJAY R. SINGH AKSHAY PAWAR; ARS
• Keywords: Set aside; Business income; Opportunity of being heard; Additional evidence; Reassessment proceedings; Principle of natural justice; Source of fund
• Section: 147; 148; 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “J(SMC)” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) & SHRI BIJAYANANDA PRUSETH (ACCOUNTANT MEMBER) I.T.A. No. 1221/Mum/2026 Assessment Year: 2019-20 Kaka Gopal Kadav At Valkas Post Taluka Khadavali Kalyan – 421301 Maharashtra [PAN: BQHPK0002N] Vs. ITO, Ward -1(1), Kalyan (Appellant) (Respondent) Assessee by Shri Ajay R. Singh/Shri Akshay Pawar, ARs Revenue by Shri Aditya Rai, Sr. DR Date of Hearing 26.03.2026 Date of Pronouncement 26.03.2026 ORDER Per Smt. Beena Pillai, JM: Present appeal filed by assessee arises out of the order dated 05/12/2025 passed by NFAC, Delhi [hereinafter referred to as “Ld.CIT(A)”] for Assessment Year 2019-20, on the following grounds:- “1. On facts and in law, the learned Commissioner of Income Tax (Appeals), NFAC, erred in dismissing the appeal ex-parte for alleged non- prosecution without adjudicating the issues on merits, thereby violating principles of natural justice. 2. On facts and in law, the Assessing Officer erred in treating cash withdrawals of ₹32,90,000 as unexplained money under section 69A of the Act, ignoring that the withdrawals were from explained bank receipts arising from business transactions. 3. The authorities below failed to appreciate that the amounts credited in the bank account represented business receipts from supply of building materials to Shree Uvasaggahar Sadhna Trust and that withdrawals were utilized for business purposes including payment to suppliers. 4. The learned AO and CIT(A) erred in ignoring the bank statements, ledger accounts, and transaction details explaining the nature and source of funds. Printed from counselvise.com 2 I.T.A. No. 1221/Mum/2026 5. The authorities below erred in invoking section 115BBE for taxing the addition without establishing existence of unexplained money within the meaning of section 69A. 6. The reassessment is bad in law as the notice u/s 148 dated 25.03.2023 was issued by the Jurisdictional Assessing Officer (ITO) and not by a Faceless Assessing Officer. As held by the Hon’ble Supreme Court, any notice issued after 29.03.2022 by a Jurisdictional Assessing Officer is without jurisdiction and liable to be quashed, irrespective of merits. 7. The reassessment proceedings and consequent addition were made without proper appreciation of facts and in mechanical manner, thereby rendering the assessment order bad in law. 8. The learned CIT(A) erred in dismissing the appeal without deciding grounds on merits, which is contrary to settled judicial principles requiring adjudication on merits even in ex-parte situations. 9. The appellant craves leave to file additional evidences, including ledger accounts and supporting documents from Shree Uvasaggahar Sadhna Trust and other business records, which go to the root of the matter and are necessary for proper adjudication. 10. The appellant prays that the matter may kindly be restored to the file of the Assessing Officer or CIT(A) for fresh adjudication after granting reasonable opportunity of hearing. 11. The appellant craves leave to add, amend, alter or withdraw any of the above grounds at or before the time of hearing.” 2. The assessee is an individual and engaged in agriculture and distributor of cattle fodder. The assessment was framed u/s 147 r.w.s. 144 r.w.s. 144B of the Act making addition of Rs.32,90,000/- u/s 69A of the Act. Aggrieved, the assessee preferred appeal before the Ld. CIT(A), which came to be dismissed ex parte. 2.1. Before us, the Ld. AR submitted that the impugned order is in violation of principles of natural justice being passed ex-parte. He drew our attention to the affidavit placed on record to submit that the assessee is not well conversant with faceless proceedings and was dependent upon his consultant. It was further submitted that due to personal hardship arising out of medical issues of his grandson, the assessee could not effectively comply with notices. It was thus prayed that one more opportunity be granted. Printed from counselvise.com 3 I.T.A. No. 1221/Mum/2026 2.2. The Ld. DR relied on the orders of the authorities below. We have perused the submissions advance by both sides in light of the material placed on record, including the affidavit. 3. It is an undisputed fact that the Ld. CIT(A) has dismissed the appeal for non-prosecution without adjudicating the issues on merits. It is settled law that the Ld. CIT(A), being a quasi-judicial authority, is under a statutory obligation to dispose of the appeal on merits. Reference may be made to the decision of the Hon’ble Supreme Court in CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC), wherein the appellate powers have been held to be co-terminus with that of the Assessing Officer. Further, the Hon’ble Delhi High Court in CIT vs. Ansal Housing Finance & Leasing Co. Ltd. (2013) 354 ITR 180 (Del) has held that dismissal of appeal without adjudication on merits is not sustainable. The Hon’ble Supreme Court in Collector, Land Acquisition vs. Mst. Katiji (1987) 167 ITR 471 (SC) has emphasized that substantial justice should prevail over technical considerations. The explanation offered by the assessee, supported by affidavit, has not been controverted by the Revenue and appears to be bona fide. 4. In our considered view, the non-compliance by the assessee cannot be said to be deliberate or intentional. The reasons explained reflect sufficient cause within the meaning of settled judicial principles. In such circumstances, denial of opportunity would amount to violation of principles of natural justice. Accordingly, we set aside the impugned order and restore the matter to the file of the Ld. CIT(A) for adjudication afresh on merits, after affording reasonable opportunity of being heard to the assessee. The assessee Printed from counselvise.com 4 I.T.A. No. 1221/Mum/2026 is directed to cooperate and file necessary details as may be called for. Needless to say, the Ld. CIT(A) shall pass a speaking order in accordance with law. In the result, the appeal filed by the assessee stands allowed for statistical purposes. Order pronounced in the open court on 26/03/2026 Sd/- Sd/- (BIJAYANANDA PRUSETH) (BEENA PILLAI) Accountant Member Judicial Member Mumbai Dated: 26/03/2026 SC Sr. P.S. Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai Printed from counselvise.com "