NARESH BABULAL JAIN,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, CC-4(3), MUMBAI

ITA 8374/MUM/2025

AI Insights

The case involves Naresh Babulal Jain, the appellant, who appealed against the order of the Commissioner of Income-Tax (Appeals) which confirmed the addition of Rs. 15,80,000 as unexplained money under section 69A of the Income-tax Act, 1961. The cash was found in a locker during a search and seizure operation. The CIT(A) had dismissed the appeal due to non-compliance by the assessee in responding to multiple notices. The Tribunal, considering the submissions and the lack of response from the assessee as a procedural issue, decided to set aside the CIT(A)'s order and remand the case for fresh adjudication, subject to the payment of costs.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846956 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2020-2021
• Appeal Filed On: 04-12-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA RAI
• Assessee Lawyers: VARSHA BHATTER
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Search and seizure
• Section: 132

Judgement Text

"1 IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “J (SMC)” BENCH, MUMBAI BEFORE SMT BEENA PILLAI, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.8374/MUM/2025 (AY:2020-21) Naresh Babulal Jain, Room No. 51, Good Hope Chamber, Dattaram Lad Path, Kalachowki, Mumbai-400012. vs. Deputy Commissioner Of Income Tax, Cc-4(3), Kautilya Bhavan, Bkc, Mumbai -400059. PAN/GIR No: AACPJ7659J (Appellant) (Respondent) Assessee by Ms. Varsha Bhatter, CA Revenue by Shri Aditya Rai (SR DR) Date of Hearing 17.03.2026 Date of Pronouncement 25.03.2026 O R D E R PER BIJYANANDA PRUSETH, AM: This appeal filed by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the Commissioner of Income-Tax (Appeals), CIT(A) 54, Mumbai [in short, ‘CIT(A)’], dated 04.10.2025 for the assessment year (AY) 2020-21. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and circumstances of the appellant's case and in law, the Id. CIT(A) erred in passing the impugned order dated 04.10.2025 without affording the appellant an adequate opportunity of being heard. 2. On the facts and circumstances of the appellant's case and in law, the Id. CIT(A) erred in confirming the addition of Rs. 15,80,000/-made by ld. AO by treating the cash found from Locker No.202 of the appellant as unexplained moncy u's 69A of the Act. 3. On the facts and circumstances of the appellant's case and in law, the ld. CIT(A) failed to appreciate that cash found from Locker on 17.10.2019 was mainly on account of cash sales made by the proprietary concern of the appellant M/s Sahil Creation in the days prior to the search of Locker No. 202 and the same had been duly accounted for in the Books of Accounts and the nexus for which has been clearly established before the Id. AO by providing confirmations from the persons who had paid cash for purchase of jewellery from the appellant. Printed from counselvise.com ITA No.8374/MUM/2025 (AY 2020-21) Naresh Babulal Jain 2 4. On the facts and circumstances of the appellant's case and in law, the Id. CIT(A) erred in confirming the addition of Rs. 15,80,000/-despite having cogent documentary evidence on record including sales invoices, confirmation of cash sales obtained from the buyers with their PAN, GST Return etc. 5. On the facts and circumstances of the appellant's case and in law, Id. CIT(A) erred in holding that cash sales have been made to unverifiable parties, which is contrary to the material and other documentary evidence on record. 6. On the facts and circumstances of the appellant's case and in law, the Id. CIT(A) erred in treating cash of Rs.15,80,000/- found from Locker as unexplained money u/s 69A of the Act even though the source of the cash found in the Locker had been duly explained and recorded in the Books of Accounts of the proprietary concern of the appellant M/s Sahil Creation and therefore the provisions of section 69A are not applicable. 7. On the facts and circumstances of the appellant's case and in law, the Id. CIT(A) failed to appreciate that appellant has discharged the primary onus casted on him by the Act in providing all the details/ evidences in respect of cash found from the Locker No. 202 and cash sales made during the year. 8. The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing.” 3. Facts of the case in brief are that the assessee filed his return of income for the AY 2020-21 on 10.02.2021 declaring total income at Rs.18,65,800/-. A search and seizure operation u/s 132 of the Act was conducted at the Locker No.202 of the assessee maintained at the premises of M/s Shree Mumbadevi Safe Deposit Vault at Zaveri Bazaar, Mumbai. Cash of Rs.15,80,000/- was found from the said locker. The assessee stated that the cash belongs to his family members. However, he could not explain the source of cash found. The explanation given by the assessee in the assessment proceeding as not accepted by the AO and he added Rs.15,80,000/- u/s 69A r.w.s. 155BBE of the Act. 4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) issued 8 notices u/s 250 of the Act of seeking response from the appellant. However, the assessee failed to file any submission and did not respond Printed from counselvise.com ITA No.8374/MUM/2025 (AY 2020-21) Naresh Babulal Jain 3 to any of the notices. The CIT(A), therefore, observed that the assessee failed to demonstrate the claims made in the grounds of appeal by adducing necessary evidence in support of the grounds raised. The assessee also failed to discharge the onus before the AO as well as the CIT(A). The CIT(A) further observed that adequate opportunities were granted but the assessee did not effectively pursue the appeal. Therefore, he dismissed the appeal. 5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The Ld. AR of the assessee submitted that the source of the cash deposit was the cash sales which has been offered for taxation. He has basically reiterated the submissions made before the lower authorities. He submitted that the CIT(A) has passed an ex parte order in violation of the principles of natural justice. He submitted that the appellant has all the details with him and the appellant may be granted one more opportunity to plead his case on merit before the CIT(A). 6. On the other hand, the Ld. Sr. AR of the revenue relied on the orders of lower authorities. He would, however, have no objection if the matter is restored to the file of CIT(A). 7. We have heard both sides and perused the materials on record. It is clear from the facts on record that the CIT(A) passed an ex parte order due to non- compliance by the assessee to the 8 notices issued by him. The Ld. AR submitted that compliance to the notices u/s 250 of the Act could not be made due to genuine reasons and one more opportunity may be given to plead the case on merit. The explanation of the appellant for non-compliance is general in nature and the Ld. AR has not given any satisfactory explanation with corroborative Printed from counselvise.com ITA No.8374/MUM/2025 (AY 2020-21) Naresh Babulal Jain 4 evidence for non-compliance before the CIT(A). The Ld. SR. DR, however, has no objection if the matter is set aside to CIT(A) for fresh adjudication. Therefore, without delving further into the matter, in the interest of justice, we deem it proper to set aside the order of CIT(A) and restore the matter to his file for fresh adjudication subject to payment of cost of Rs.5,000/- (Rupees Five Thousand Only) to the Prime Minister’s National Relief Fund. Subject to such payment, the CIT(A) shall decide the matter on merit by a speaking and reasoned order. Needless to mention that he shall allow adequate and reasonable opportunity of being heard to the assessee. The assessee is also directed to file submission and necessary details by not seeking adjournment without valid reason. The ground is allowed for statistical purpose. 8. Since we have allowed the appeal on merit, there is no need to adjudicate the other grounds. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order is pronounced on 25.03.2026. Sd/- Sd/- (BEENA PILLAI) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 25.03.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order Assistant Registrar ITAT, MUMBAI Printed from counselvise.com "