RAGHBIR CHAND SHAMA,DELHI V. INCOME TAX OFFICER, DELHI

ITA 8458/DEL/2025

AI Insights

The case involves Raghbir Chand Shama, the appellant, who contested the orders of the National Faceless Appeal Centre (NFAC) and the Assessing Officer (AO) regarding the assessment year 2012-13. The appellant raised multiple grounds of appeal, primarily challenging the ex-parte nature of the orders and the treatment of cash deposits as unexplained money under section 69A of the Income Tax Act, 1961. The appellant argued that the cash deposits were from legitimate business activities and were already included in the income tax return filed. The Tribunal found procedural lapses in the handling of the appeal and the assessment, leading to the decision to remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841003 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 16-12-2025
• Other Referred Cases: GKN Driveshafts
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 147; 144

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘SMC’: NEW DELHI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER ITA No.8458/Del/2025 Assessment Year 2012-13 Raghbir Chand Shama, 353, SFS Flats, Near Water Tank, PH-4, Ashok Vihar, New Delhi PAN No.AASPS9248N Vs. ITO, Delhi Appellant Respondent Appellant None Respondent Sh. Manoj Kumar, Sr. DR Date of Hearing 15.01.2026 Date of Pronouncement 27.02.2026 ORDER PER C.N. PRASAD, JM, This appeal is filed by the assessee against the order of the NFAC, Delhi dated 22.10.2025 for the A.Y.2012-13. 2. The assessee has raised following grounds of appeal :- 1. That impugned appellate order dated 22.10.2025, passed by the Ld. NFAC under section 250 of the Income Tax Act, 1961, is legally flawed, violates principles of natural justice, and is liable to be quashed, as the appeal was dismissed without providing any effective opportunity of hearing to the Appellant. Printed from counselvise.com Page | 2 2. That the Ld. NFAC erred in dismissing the appeal solely on alleged non-compliance, without adjudicating the issues on the merits, in violation of the mandate of section 250(6), which requires a reasoned order on each ground of appeal. 3. That the Ld. NFAC failed to appreciate that the Appellant did not receive effective notices. Therefore, the ex parte disposal of the appeal is arbitrary and contrary to the principles of equity, fairness and Articles 14 and 21 of the Constitution. That the Ld. AO significantly erred in treating cash deposits of equity, fairness and Articles 14 and 21 of the Constitution. 4. That the Ld. AO significantly erred in treating cash deposits of 214,95,600/- as unexplained money under section 69A, neglecting that the Appellant was engaged in the business of trading handkerchiefs and that the said deposits represented cash sales correctly arising from regular business activities, as the declared turnover of the Appellant during the year was of 218,14,250. 5. That the Ld. AO failed to examine basic business records such as books of account, purchase statements, sales summaries or stock movements, and proceeded mechanically to make an addition without appreciating the nature of retail cash business. 6. The cash deposits in question are fully accounted for as business turnover, already included in the Income Tax Return filed declaring income of ₹2,10,260/-, and therefore, the addition u/s 69A leads to double taxation of the same income, which is unlawful. 7. hat the Ld. AO failed to establish any nexus between the cash deposits and any undisclosed income, and the Printed from counselvise.com Page | 3 addition has been made merely on suspicion, surmise and conjecture. 8. That the Ld. AO failed to recognise that cash deposits cannot be regarded as income unless supported by concrete evidence, which is entirely absent in the present case. 9. That the assessment order passed u/s 147 r.w.s. 144 is invalid in law because (a) there was no independent application of mind while recording reasons for reopening; (b) the reasons recorded were not furnished to the Appellant; and (c) the mandatory procedure prescribed by law, including the dictum in GKN Driveshafts, was not followed. 10. That the addition and the resulting demand raised are arbitrary, excessive, illegal, and liable to be wholly removed. 11. That the Appellant craves leave to add, amend, modify or withdraw any ground of appeal at the time of hearing. 3. Perusal of the record before us shows that both the assessment order as well as the Ld. CIT(A) order are ex-parte orders. The Ld. CIT(A) dismissed the appeal of the assessee without going into the merits of the addition made by the AO. The order passed by the AO was also ex-parte order u/s.144 r.w 147 of the Act. Therefore, considering the facts on record this appeal is restored back to the file of the AO with a direction to complete the assessment afresh and in accordance with law after providing adequate opportunity of hearing to the assessee. Printed from counselvise.com Page | 4 4. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 27.02.2026. Sd/- [C.N. PRASAD] JUDICIAL MEMBER Dated: 27.02.2026 NEHA , Sr.P.S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "