MR. RAKESH,HARYANA V. ITO, WARD-18(3), DELHI

ITA 5499/DEL/2025

AI Insights

The case involves Mr. Rakesh, the appellant, who appealed against the order of the Learned Commissioner of Income Tax, New Delhi, for the Assessment Year 2017-18. The appeal was initially delayed by 36 days, which the ITAT condoned. The primary issue in the original assessment was the substantial cash deposits made by the assessee during the demonetization period, which were scrutinized by the ITO. The ITO added Rs.47,15,000 under section 68 of the Income Tax Act, suspecting these were undisclosed incomes regularized through bank deposits. The CIT(A) dismissed the appeal ex-parte due to non-compliance from the assessee. The ITAT, finding the dismissal ex-parte and the initial assessment contentious, remanded the case back to the CIT(A) for a detailed examination.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836663 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Appeal Filed On: 04-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: SHILPI JAIN
• Keywords: Reasonable cause
• Section: 68; 44AD

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, DELHI BEFORE SHRI.RIFAUR RAHMAN, ACCOUNTANT MEMBER And SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.5499/DEL/2025 (Assessment Year: 2017-18) Mr. Rakesh, 59/20, Rameshwar Puram, Gali No.1, Kabirpur, Sonipat, Haryana 131001 PAN: BRWPR6769P ...... Appellant Vs. ITO, Ward-18(3), CR Building, I.P Estate, New Delhi 110002 ..... Respondent Appellant by : Ms. Shilpi Jain, CA Respondent by : Ms. Harpreet Kaur Hansra, Sr. DR Date of hearing : 28.01.2026 Date of pronouncement : 12.02.2026 ORDER PER S.RIFAUR RAHMAN,AM: The assessee has filed appeal against the order of the Learned Commissioner of Income Tax, New Delhi [“Ld. CIT(A)”, for short]/National Faceless Appeal Centre (NFAC) dated 01.06.2024 for the Assessment Year 2017-18. 2. At the time of hearing, the ld. AR of the assessee brought to our notice that the present appeal before the ITAT was filed with a delay of 36 days and prayed that the delay be condoned. It was submitted that the assessee was prevented from filing the appeal on time and that the delay was not deliberate. After considering the submissions, we found that the delay deserves to be condoned, as Printed from counselvise.com 2 ITA No.5499/DEL/2025 the assessee was prevented from filing the appeal on time for reasonable cause. Accordingly, the delay is condoned and the appeal is admitted. 3. It was further brought to our notice that the case of the assessee was selected for complete scrutiny and notices were issued. The scrutiny was initiated because the assessee had deposited cash of Rs.39,00,000/- in its bank account and cash deposits of Rs.8,15,000/- during the demonetization period. During the assessment proceedings, the Assessing Officer (AO) observed that in the computation of income, the assessee had shown income from business and profession under section 44AD of the Act amounting to Rs.4,35,250/-. Accordingly, notices were issued to the assessee. In response, the assessee submitted that he is engaged in the business of garments and that the source of cash deposits was out of cash sales. 4. The AO, however, observed from the e-portal that this was the first year of filing return of income by the assessee, which indicated that the assessee attempted to regularize undisclosed income by depositing cash in the bank account in the guise of cash sales and filing a return of income for the impugned assessment year 2017-18. Accordingly, the AO proceeded to make an addition of Rs.47,15,000/- under section 68 of the Act. Printed from counselvise.com 3 ITA No.5499/DEL/2025 5. Aggrieved, the assessee preferred an appeal before the NFAC, Delhi. Several notices were issued, but there was no response from the assessee, nor were any written submissions filed. Considering the information available on record and the grounds of appeal raised, the learned CIT(A) observed that there was no compliance from the assessee’s side and concluded that the assessee was not interested in prosecuting the case. Accordingly, the appeal filed by the assessee was dismissed ex-parte. 6. At the time of hearing before us, both counsels agreed that the order passed by the CIT(A) was ex-parte. The learned AR prayed that the matter be remitted back to the CIT(A) for fresh adjudication, and the learned DR raised no objection to such remand. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on this 12th day of February, 2026. Sd/- Sd/- (VIMAL KUMAR) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi, Dated 12/02/2026 NV/- Printed from counselvise.com 4 ITA No.5499/DEL/2025 Copy of the Order forwarded to : 1. The Appellant , 2. The Respondent. 3. The PCIT 4. The DR, ITAT 5. Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, DELHI Printed from counselvise.com "