MOHIT RAMCHANDANI,JABALPUR V. INCOME TAX OFFICER WARD 2(1) , JABALPUR

ITA 8/JAB/2025

AI Insights

The case involves Mohit Ramchandani, the appellant, who contested the order of the Learned Addl. Commissioner of Income-tax (Appeals), Kanpur, which confirmed an addition of Rs. 10,14,245 to his income for the assessment year 2011-12. The addition was initially made by the Assessing Officer due to unexplained cash deposits in the appellant's bank account, as he had not filed any return of income. The appellant argued that he was not given a proper opportunity to present his case, and the appeal was dismissed ex-parte by the CIT(A) without considering the merits. The Tribunal found that the principles of natural justice were not followed and remanded the case back to the CIT(A) for a detailed examination and a speaking order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705665 (ITAT-JABALPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2011-2012
• Other Referred Cases: CIT v. Balchand Ajit Kumar 263 ITR 610 (MP)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK BHURA
• Assessee Lawyers: SAPAN USRETHE; WAY OF
• Keywords: Set aside; Business income; Reasonable cause; Corroborative evidences; Principle of natural justice
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH “DB”, JABALPUR BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI, NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No. 08/JAB/2025 Assessment Year: 2011-12 Mohit Ramchandani LIG13, Shiv Nagar Damoh Naka, Jabalpur-482002. v. ITO Ward-2(1) Annexue Building, Aayakar Bhawan, Napier Town, Jabalpur-482001. PAN:AUIPR4713M (Appellant) (Respondent) Appellant by: Shri Sapan Usrethe, Adv Respondent by: Shri Alok Bhura, Sr. CIT(DR) Date of hearing: 22 05 2025 Date of pronouncement: 30 06 2025 O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Addl. Commissioner of Income-tax (Appeals), Kanpur dated 22.11.2024 pertaining to the assessment year 2011-12. The assessee has raised the following grounds of appeal: - “1. The learned Commissioner of Income tax (Appeal) of NFAC New Delhi was not justified in dismissing the appeal on the ground of non submission of reply without appreciating that appellant was prevented with reasonable cause in not filing the reply and even otherwise appellant have sought time for filing the reply and order was passed without giving proper opportunity of hearing. 2. The learned Commissioner of Income tax (Appeal) of NFAC New Delhi was not justified in confirming the addition of Rs. 10,14,245 made by the AO without appreciating the fact that cash was deposited out of business receipt . 3. The learned Commissioner of Income tax (Appeal) of NFAC New Delhi was not justified in confirming the addition of Rs. 10,14,245 made by the AO without appreciating that order was passed mechanically as only ITA No.8/JAB/2025 Page 2 of 4 credit entry was taken into consideration whereas debit entries were ignored which is bad in law . 4. The learned Commissioner of Income tax (Appeal) of NFAC New Delhi was not justified in confirming the addition of Rs. 10,14,245 as AO erred in making addition on account of entire cash deposit whereas the net profit rate may be applied to unrecorded sales or receipts for the purpose of making any additions as held by Hon'ble Madhya Pradesh High Court in CIT v. Balchand Ajit Kumar 263 ITR 610 (MP), wherein it was held that the total sale could not be regarded as profit of the assessee and only net profit should be taxed. 5. The learned Commissioner of Income Tax (Appeal) of NFAC New Delhi was not justified in confirming the action of AO whereas assessment is liable to be quashed as assessment order was passed under wrong section and it is not curable defect and thus it is prayed that it may kindly be quashed. 6. The appellant craves for leave to amend, add to or omit any ground up to the time of hearing of the appeal.” 2. The facts giving rise in the present appeal are that in this case, the assessee has not filed any return of income. The Assessing Officer was having information regarding cash deposit in the bank account of the assessee. Therefore, the case was taken up for scrutiny assessment u/s 147 of the Income Tax Act, 1961 (“Act”, for short). Thereafter, the Assessing Officer had issued requisite notice u/s 148 of the Act. In response thereto, the assessee filed his return of income declaring total income at Rs.1,47,390/-. During the course of assessment proceedings, the assessee was called upon to explain the source of cash deposits. The Assessing Officer has noted that there was no compliance of the query. Therefore, he proceeded to make addition of Rs.10,14,245/- and assessed income at Rs.11,61,640/- as against the returned income of Rs.1,47,390/-. Aggrieved by this order, the assessee preferred appeal before the Ld. CIT(A) who dismissed the appeal ex-parte without adverting to the merits of the case. Thus, the assessee is in appeal before this Tribunal. ITA No.8/JAB/2025 Page 3 of 4 3. Apropos to the grounds of appeal, the Ld. Counsel for the assessee strongly argued that the assessee did not receive any notices of hearing as issued by the Ld. CIT(A). The Ld. CIT(A) without adverting to the grounds raised by the assessee passed ex-parte order and confirmed the addition. Thereby, the Ld. CIT(A) has grossly violated the principles of natural justice. He prayed that the impugned addition may be deleted. 4. On the other hand, the Ld. Departmental Representative (DR) strongly opposed the submission and supported the orders of the lower authorities. He drew our attention to the observation made by the Ld. CIT(A). He also contended that the various notices has been issued to the assessee by the First Appellate Authority and in the absence of any supporting evidences the Ld. CIT(A) was justified in dismissing the appeal of the assessee. He contended that the onus lies on the assessee for explaining the source of investment. 5. We have heard the rival submissions and perused the material available on record. It is stated by the assessee that the Ld. CIT(A) failed to advert to the grounds taken by the assessee. It is well settled that the First Appellate Authority is required to adjudicate on the matter related to the impugned addition made by the Assessing Officer. Under these facts, we deem it fit and proper and to sub-serve the interest of substantive justice to set aside the impugned order and restore the grounds of the appeal to the Ld. CIT(A) for deciding the grounds afresh and by giving clear finding on the grounds raised by the assessee by way of speaking order. Needless to say that the assessee would provide all the information which is relevant and necessary for ITA No.8/JAB/2025 Page 4 of 4 adjudication of grounds of appeal. Grounds raised in this appeal are allowed for statistical purpose. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 30/06/2025. Sd/- Sd/- [NIKHIL CHOUDHARY] [KUL BHARAT] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 30/06/2025 Vijay Pal Singh, (Sr. PS) Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT (Judicial) 4. The PCIT 5. DR, ITAT, Jabalpur 6. Guard File By order // True Copy// Assistant Registrar ITAT, Jabalpur "