RAJESH B. JAIN AS LEGAL HEIR OF BHANWARLAL M. JAIN,MUMBAI V. INCOME TAX OFFICER , WARD 19(1)(1), MUMBAI

ITA 2050/MUM/2024

AI Insights

The case involves Rajesh B. Jain, the legal heir of Bhanwarlal Jain, appealing against the order of the CIT(A) for the assessment year 2015-16. The primary contention was procedural impropriety, specifically the failure of the CIT(A) to acknowledge an adjournment application submitted by the appellant, which led to an ex-parte decision. Additionally, the appellant challenged the jurisdiction of the Assessing Officer in reopening the case under section 147, the confirmation of unexplained cash commission income, and issues related to evidence obtained during a search operation. The Tribunal noted the importance of the 'Right to be Heard' and emphasized that justice should not be sacrificed for procedural haste.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 840320 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 19-04-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARI
• Assessee Lawyers: TUSHARNAGORI
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Corroborative evidences; Retraction; Principle of natural justice; Accommodation entries
• Section: 147; 132

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA No. 2050/MUM/2024 Assessment Year: 2015-16 Rajesh B. Jain as Legal Heir of Bhanwarlal Jain, 171, 17th floor, Silver Arch, Petit Hall Compound, Nepeansea Road, Mumbai-400006. Vs. ITO Ward 19(1)(1), Piramal Chamber, Lalbaug, Mumbai-400012. PAN NO. AAFPJ 1924 R Appellant Respondent Assessee by : Mr. Tushar Nagori Revenue by : Mr. Swapnil Choudhari, Sr. DR Date of Hearing : 17/02/2026 Date of pronouncement : 23/02/2026 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 12.03.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – 47, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2015-16, raising following grounds: Printed from counselvise.com 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in passing the order u/s 250 of the Act, ex parte, without made an application seeking adjournment of hearing dated 09.02.2024, which was overlooked by the Ld. CIT(A) and the impugned order was passed without considering the adjournment request and the submission o principles of natural justice. 2. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding the jurisdiction by the Assessing Officer in reopening the case of the appellant u/s 147 of t valid without appreciating the fact that the conditions laid down under the Act for initiating reassessment proceedings were not fulfilled. 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the unexplained cash commission income of Rs. 8,26,30,691/ for allegedly providing accommodation entries through 70 alleged benami concerns without appreciating the fact that the appellant is managing only those concerns where the proprietor/partner/director and that there is no evidence to hold that the said 70 concerns were controlled by the appellant. 4. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition commission income solely on the basis of search action on appellant without appreciating the fact that the appellant has retracted the statement given before Investigation Wing, Mumbai as the same was taken under coercion and without the consent 5. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the data found in the '4 GB white colour Sony Pen Drive', allegedly seized by the Investigation Wing, belongs to the appellant without app same was not found at the premises of the appellant and neither the pen drive was mentioned in the panchnama nor the ownership of the pendrive was admitted by the appellant. 6. On the facts and circumstances of the case and in l learned CIT(A) erred in making the addition on the basis of the alleged pen drive during search u/s 132 of the Act without appreciating the fact that procedures provided u/s 65B of the Indian Evidence Act 1872 in respect of digital data were not complied by the Income Tax Department. Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in passing the order u/s 250 of the Act, ex parte, without appreciating the fact that the appellant had duly made an application seeking adjournment of hearing dated 09.02.2024, which was overlooked by the Ld. CIT(A) and the impugned order was passed without considering the adjournment request and the submission of the appellant, which is against the principles of natural justice. 2. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding the jurisdiction by the Assessing Officer in reopening the case of the appellant u/s 147 of t valid without appreciating the fact that the conditions laid down under the Act for initiating reassessment proceedings were not 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the addition of alleged unexplained cash commission income of Rs. 8,26,30,691/ for allegedly providing accommodation entries through 70 alleged benami concerns without appreciating the fact that the appellant is managing only those concerns where the appellant himself is proprietor/partner/director and that there is no evidence to hold that the said 70 concerns were controlled by the appellant. 4. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition commission income solely on the basis of search action on appellant without appreciating the fact that the appellant has retracted the statement given before Investigation Wing, Mumbai as the same was taken under coercion and without the consent of the appellant. 5. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the data found in the '4 GB white colour Sony Pen Drive', allegedly seized by the Investigation Wing, belongs to the appellant without appreciating the fact that the same was not found at the premises of the appellant and neither the pen drive was mentioned in the panchnama nor the ownership of the pendrive was admitted by the appellant. 6. On the facts and circumstances of the case and in l learned CIT(A) erred in making the addition on the basis of the alleged pen drive during search u/s 132 of the Act without appreciating the fact that procedures provided u/s 65B of the Indian Evidence Act 1872 in respect of digital data were not mplied by the Income Tax Department. Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 2 ITA No. 2050/MUM/2024 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) erred in passing the order u/s 250 of the Act, ex- appreciating the fact that the appellant had duly made an application seeking adjournment of hearing dated 09.02.2024, which was overlooked by the Ld. CIT(A) and the impugned order was passed without considering the adjournment f the appellant, which is against the 2. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding the jurisdiction by the Assessing Officer in reopening the case of the appellant u/s 147 of the Act as valid without appreciating the fact that the conditions laid down under the Act for initiating reassessment proceedings were not 3. On the facts and circumstances of the case and in law, the addition of alleged unexplained cash commission income of Rs. 8,26,30,691/- u/s 69A for allegedly providing accommodation entries through 70 alleged benami concerns without appreciating the fact that the appellant is appellant himself is proprietor/partner/director and that there is no evidence to hold that the said 70 concerns were controlled by the appellant. 4. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition of alleged commission income solely on the basis of search action on appellant without appreciating the fact that the appellant has retracted the statement given before Investigation Wing, Mumbai as the same of the appellant. 5. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the data found in the '4 GB white colour Sony Pen Drive', allegedly seized by the Investigation reciating the fact that the same was not found at the premises of the appellant and neither the pen drive was mentioned in the panchnama nor the ownership 6. On the facts and circumstances of the case and in law, the learned CIT(A) erred in making the addition on the basis of the alleged pen drive during search u/s 132 of the Act without appreciating the fact that procedures provided u/s 65B of the Indian Evidence Act 1872 in respect of digital data were not Printed from counselvise.com 7. On the facts and circumstances of the case and in law, the learned CIT(A) erred in relying on the confessional statements of various persons of the alleged concerns without granting any opportunity to the appellant t proprietor of the alleged 70 controlled entities. 8. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the assessing officer without appreciating the fa officer is extrapolating material pertaining to other years in the present assessment year, without providing any corroborative evidences and making the addition on estimation purely on the basis of surmises. 9. On the facts and circ learned CIT(A) erred in holding that the retractions made by the appellant against the statement recorded under section 132(4) of the Act, without appreciating the facts and circumstances of the case. 2. In Ground No. 1 of the present appeal, the assessee challenges the impugned order passed by the Ld. CIT(A) on the primary ground of procedural impropriety. It is contended that an adjournment application dated 09.02.2024, moved by the assessee, was overlooked by the fir order passed without a substantive hearing or consideration of the assessee’s explanation. 2.1 The Ld. Counsel for the assessee submits that the assessee was prevented by sufficient cause from representing the scheduled date. It is argued that the failure of the Ld. CIT(A) to take cognizance of the adjournment request effectively deprived the assessee of the right to be heard. The assessee seeks a remand of the matter to ensure a fair opportuni evidence on record. Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 7. On the facts and circumstances of the case and in law, the learned CIT(A) erred in relying on the confessional statements of various persons of the alleged concerns without granting any opportunity to the appellant to cross examine the partner/ director/ proprietor of the alleged 70 controlled entities. 8. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the assessing officer without appreciating the fact that the assessing officer is extrapolating material pertaining to other years in the present assessment year, without providing any corroborative evidences and making the addition on estimation purely on the basis of surmises. . On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the retractions made by the appellant against the statement recorded under section 132(4) of the Act, without appreciating the facts and circumstances of the 1 of the present appeal, the assessee challenges the impugned order passed by the Ld. CIT(A) on the primary ground of procedural impropriety. It is contended that an adjournment application dated 09.02.2024, moved by the assessee, was overlooked by the first appellate authority, resulting in an order passed without a substantive hearing or consideration of the assessee’s explanation. The Ld. Counsel for the assessee submits that the assessee was prevented by sufficient cause from representing the scheduled date. It is argued that the failure of the Ld. CIT(A) to take cognizance of the adjournment request effectively deprived the assessee of the right to be heard. The assessee seeks a remand of the matter to ensure a fair opportunity to place documentary Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 3 ITA No. 2050/MUM/2024 7. On the facts and circumstances of the case and in law, the learned CIT(A) erred in relying on the confessional statements of various persons of the alleged concerns without granting any o cross examine the partner/ director/ 8. On the facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the addition made by the ct that the assessing officer is extrapolating material pertaining to other years in the present assessment year, without providing any corroborative evidences and making the addition on estimation purely on the umstances of the case and in law, the learned CIT(A) erred in holding that the retractions made by the appellant against the statement recorded under section 132(4) of the Act, without appreciating the facts and circumstances of the 1 of the present appeal, the assessee challenges the impugned order passed by the Ld. CIT(A) on the primary ground of procedural impropriety. It is contended that an adjournment application dated 09.02.2024, moved by the assessee, was st appellate authority, resulting in an ex-parte order passed without a substantive hearing or consideration of the The Ld. Counsel for the assessee submits that the assessee was prevented by sufficient cause from representing the matter on the scheduled date. It is argued that the failure of the Ld. CIT(A) to take cognizance of the adjournment request effectively deprived the assessee of the right to be heard. The assessee seeks a remand of ty to place documentary Printed from counselvise.com 2.2 Per contra, the Revenue supports the impugned order, noting that the Ld. CIT(A) was compelled to sustain the additions made by the Assessing Officer (AO) as the assessee had failed to avail of multiple opportunities previously granted. 3. We have heard the rival submissions and perused the relevant material available on record. The record indicates that the Ld. CIT(A) proceeded to confirm the additions primarily due to the non appearance of the assessee. Howe an adjournment request was pending and ignored remains uncontroverted. 3.1 It is a settled principle of law that the \"Right to be Heard\" is not a mere ritualistic formality but a substantive right. Judicial and quasi-judicial authorities must ensure that orders are not only fair but appear to be fair. While the Ld. CIT(A) is within his rights to curb dilatory tactics, the inadvertent overlooking of a formal adjournment application results in a technical breach of the principles of natural justice. 3.2 We are of the considered view that justice should not be sacrificed at the altar of technicalities or procedural haste. opinion, to subserve the ends of justice, the assessee deserves a final opportunity to substantiate submissions and documentary evidence. Rajesh B. Jain as Legal Heir of Bhanwarlal Jain Per contra, the Revenue supports the impugned order, noting that the Ld. CIT(A) was compelled to sustain the additions made by the Assessing Officer (AO) as the assessee had failed to avail of tunities previously granted. We have heard the rival submissions and perused the relevant material available on record. The record indicates that the Ld. CIT(A) proceeded to confirm the additions primarily due to the non appearance of the assessee. However, the specific contention that an adjournment request was pending and ignored remains It is a settled principle of law that the \"Right to be Heard\" is not a mere ritualistic formality but a substantive right. Judicial and ial authorities must ensure that orders are not only fair but appear to be fair. While the Ld. CIT(A) is within his rights to curb dilatory tactics, the inadvertent overlooking of a formal adjournment application results in a technical breach of the ples of natural justice. We are of the considered view that justice should not be sacrificed at the altar of technicalities or procedural haste. subserve the ends of justice, the assessee deserves a final opportunity to substantiate its claims through relevant submissions and documentary evidence. Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 4 ITA No. 2050/MUM/2024 Per contra, the Revenue supports the impugned order, noting that the Ld. CIT(A) was compelled to sustain the additions made by the Assessing Officer (AO) as the assessee had failed to avail of We have heard the rival submissions and perused the relevant material available on record. The record indicates that the Ld. CIT(A) proceeded to confirm the additions primarily due to the non- ver, the specific contention that an adjournment request was pending and ignored remains It is a settled principle of law that the \"Right to be Heard\" is not a mere ritualistic formality but a substantive right. Judicial and ial authorities must ensure that orders are not only fair but appear to be fair. While the Ld. CIT(A) is within his rights to curb dilatory tactics, the inadvertent overlooking of a formal adjournment application results in a technical breach of the We are of the considered view that justice should not be sacrificed at the altar of technicalities or procedural haste. In our subserve the ends of justice, the assessee deserves a its claims through relevant Printed from counselvise.com 3.3 In light of the facts and circumstances discussed above, we find it appropriate to set aside the impugned order of the Ld. CIT(A). The matter is hereby novo adjudication. The Ld. CIT(A) is directed to decide the issue afresh after providing a reasonable and effective opportunity of being heard to the assessee. 4. Consequently, Ground No. 1 is allowed. Since the primary grievance regarding th by restoring the matter, the remaining grounds of appeal are rendered academic at this stage and do not require separate adjudication. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (KAVITHA RAJAGOPAL JUDICIAL MEMBER Mumbai; Dated: 23/02/2026 Rahul Sharma, Sr. P.S. Rajesh B. Jain as Legal Heir of Bhanwarlal Jain In light of the facts and circumstances discussed above, we find it appropriate to set aside the impugned order of the Ld. CIT(A). The matter is hereby restored to the file of the Ld. CI adjudication. The Ld. CIT(A) is directed to decide the issue afresh after providing a reasonable and effective opportunity of being heard to the assessee. Consequently, Ground No. 1 is allowed. Since the primary grievance regarding the denial of natural justice has been addressed by restoring the matter, the remaining grounds of appeal are rendered academic at this stage and do not require separate In the result, the appeal of the assessee is allowed for ounced in the open Court on 23/02/2026. Sd/ (KAVITHA RAJAGOPAL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 5 ITA No. 2050/MUM/2024 In light of the facts and circumstances discussed above, we find it appropriate to set aside the impugned order of the Ld. CIT(A). to the file of the Ld. CIT(A) for a de adjudication. The Ld. CIT(A) is directed to decide the issue afresh after providing a reasonable and effective opportunity of Consequently, Ground No. 1 is allowed. Since the primary e denial of natural justice has been addressed by restoring the matter, the remaining grounds of appeal are rendered academic at this stage and do not require separate In the result, the appeal of the assessee is allowed for /02/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Rajesh B. Jain as Legal Heir of Bhanwarlal Jain Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Rajesh B. Jain as Legal Heir of Bhanwarlal Jain 6 ITA No. 2050/MUM/2024 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "