MANJEET SINGH ,GURGAON V. ITO WARD 2(4), GURGAON , GURGAON

ITA 4802/DEL/2025

AI Insights

The case involves Manjeet Singh, who appealed against the order of the National Faceless Appeal Centre (NFAC) which confirmed the addition of Rs. 3,54,12,000 as unexplained cash credit under section 68 of the Income Tax Act, 1961. The assessee had taken unsecured loans during the assessment year 2018-19, which were scrutinized under the E-assessment Scheme, 2019. The AO accepted some of the loans but added a significant amount due to lack of sufficient evidence regarding the creditworthiness of the lenders. The CIT(A) upheld the AO's decision, leading to the current appeal. The Tribunal found procedural lapses in the assessment process, particularly the non-consideration of the assessee's submissions and inadequate opportunity for the assessee to present his case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838195 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 05-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: SHIKHAR GARG
• Keywords: Set aside; Opportunity of being heard; Gift; Principle of natural justice
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, C: NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.- 4802/Del/2025 [Assessment Year: 2018-19] Manjeet Singh, House No. 161, Vill-Garouli Khurd, Gurugram, H.O. Gurugram, Haryana122001. Vs ITO, Ward 2(4), Shankar Chowk Rd., Phase V, Udyog Vihar, Sector-19, Gurugram Haryana 122016. PAN- ARIPM2916J Assessee Revenue Assessee by Shri Shikhar Garg, Adv. Revenue by Shri Om Parkash, Sr. DR Date of Hearing 21.01.2026 Date of Pronouncement 18.02.2026 ORDER PER BRAJESH KUMAR SINGH, AM, This appeal by the Assessee is directed against the order dated 15.07.2025 of National Faceless Appeal Centre (NFAC) [hereinafter referred to as the ‘Ld. CIT(A)] order dated 15.07.2025 arising out of the assessment order dated 30.03.2021 passed under section 143(3) r.w.s 143(3A), & 143(3B) of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the Additional / Joint /Deputy /Assistant Printed from counselvise.com ITA No.-4802/Del/2025 Manjeet Singh 2 Commissioner of Income Tax/ Income-tax Officer (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (AY) 2018-19 (inadvertently mentioned as AY 2017-18 in Form no. 36). 2. Brief facts of the case: The assessee is engaged in manufacturing of quality fasteners, screw, rivets, nuts, washers and bolts since 2010 serving the needs of Indian industries. The assessee filed its return of income on 31.10.2018, declaring a total income of Rs. 19,73,000/-. 2.1 The case was selected for limited scrutiny assessment under the E-assessment Scheme, 2019 on the following issues:- S. No. Issues i. Unsecured Loans 2.2 During the year, the assessee had taken unsecured loans of Rs. 4,50,10,000/-. The AO asked the assessee to furnish the necessary confirmations and other details from the said parties regarding the loans taken. In reply, the assessee submitted as under: “1. All the loans were utilized in business and specific purpose of individual loans have been stated. 2. There are 29 persons from whom loans have been accepted during the year. Due to COVID Pandemic, the assessee has expressed his inability to collect documentary evidences from all parties. 3. It was requested by the assessee that specific names of 2-4 parties may be provided for furnishing of these evidences or summons can be issued to them directly. 4. All the receipts of loans are through banking channels and there is not even a single cash transaction.” Printed from counselvise.com ITA No.-4802/Del/2025 Manjeet Singh 3 2.3 After verifying the details, the AO accepted the loan amounting to Rs. 91,98,000/- but noted that the assessee had not filed the necessary details in respect of 23 persons, from whom loans to the extent of Rs. 3,58,12,000/- were received. Accordingly, the said amount was added by the AO u/s 68 r.w.s. 115BBE of the Act. 3. Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) noted that in respect of 11 creditors the assessee provided certain evidence such as PAN, Aadhar cards, gift deed etc., but did not provide copies of ITR of those 11 creditors and observed that of none parties were found to be filers of I.T. Return. The Ld. CIT(A) further held that in absence of ITR, credit worthiness of the parties could not be established, even though the amount was taken and repaid through banking channel and therefore, addition u/s.68 made by the AO was justified. 3.1 However, the Ld. CIT(A) noted that in the case of Sumit Saroj, there was an opening balance of Rs. 4 lakhs and, to that extent, the Ld. CIT(A) deleted the addition and confirmed the balance amount of Rs. 3,54,12,000/-. 4. Aggrieved with the said order, the assessee is in appeal before us on the following grounds of appeal: “1. That on the facts and in the circumstances of the case, the learned CIT(A) as well as the learned Assessing Officer have erred in passing the order under section 250 affirming the assessment order passed under section 143(3) of the Income Tax Printed from counselvise.com ITA No.-4802/Del/2025 Manjeet Singh 4 Act, 1961. The order so passed is bad in law, and the appellant denies the liability to income tax. 2. That on the facts and in the circumstances of the case, the learned CIT(A) as well as the learned Assessing Officer have violated the principles of natural justice in passing the impugned orders. The appellant's written submission dated 15.03.2021 was not duly considered while framing the assessment under section 143(3) of the Income Tax Act, 1961. 3. That on the facts and in the circumstances of the case, the learned CIT(A) has grossly erred in sustaining the addition of Rs. 3,54,12,000/- invoking the provisions of section 68 of the Income Tax Act, 1961 and in holding that non-furnishing of the ITR amounts to failure to prove the creditworthiness of the creditors, despite having accepted the identity and genuineness of the transactions through documentary evidence submitted. The ITRs of the creditors are available with the Department and can be retrieved from the income tax portal. 4. That on the facts and in the circumstances of the case, there is no statutory requirement under section 68 of the Income Tax Act, 1961 to furnish the ITRs of the creditors, as the same constitutes an internal record of the creditors. The appellant has already duly submitted PAN, Aadhaar, bank statements, and confirmations to establish identity, creditworthiness, and genuineness of the loans. 5. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in applying section 68 of the income tax Act, 1961, despite the fact that 2,48, 12,000/- of the loan has been repaid subsequent to the FY 2017-18 and the loan has a direct nexus to the business of the appellant. 6. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in applying the provision of section 115BBE of the income tax Act, 1961 as the loan which is already declared in the financial statement cannot be term as cash credit and the application of section 68 is bad in law.” 5. During the hearing before us, the Ld. AR submitted that the assessment was framed during the period of Covid and, therefore, there was difficulty in gathering the full details. It was requested that the matter be remanded back to the file of the AO for fresh adjudication. The Ld. AR also submitted that the assessee had filed details on 15.03.2021 before the AO (placed at 50-55 of the Paper Book), which were not considered by the AO during the assessment proceedings. The Ld. AR also filed necessary screen short to show that their details were filed before the AO. The Ld. AR also submitted that vide notification dated 27.02.2021, the limitation date of Printed from counselvise.com ITA No.-4802/Del/2025 Manjeet Singh 5 passing the assessment order has been extended up to 30.04.2021, and, therefore, the AO passed the assessment order on 31.03.2021 in a hurry without providing adequate opportunity of being heard. The Ld. AR also contended that the even the Ld. CIT(A) did not grant sufficient opportunity to the assessee to represent its case before him as the application under Rule 46A filed before the Ld. CIT(A) on 7.5.2025 (placed at page no. 58-71 of the paper book) was not considered by the Ld. CIT(A). 5.1. The Ld. Sr. DR relied upon the orders of the authorities below but did not seriously object to the matter being remanded to the file of the AO for fresh adjudication. 6. We have heard both the parties and perused the material available on record. 6.1 In this case, it is seen that the assessment order was passed during the Covid period. Moreover, it is submitted by the assessee that its submission filed before the AO on 15.03.2021 was not considered by the AO. Therefore, considering the entire facts in totality and to give one more opportunity to the assessee, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO for fresh adjudication in accordance with law, after providing due opportunity of being heard to the assessee. Further, the assessee will be also at liberty to submit any further details / evidence in support of his claim. Printed from counselvise.com ITA No.-4802/Del/2025 Manjeet Singh 6 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 18th February, 2026. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated- 18.02.2026. Pooja. Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, Printed from counselvise.com "