RAJNISH KUMAR,UNNAO V. ASSESSMENT UNIT, INCOME TAX DEPARTMENT

ITA 321/LKW/2025

AI Insights

This case involves an appeal by the assessee, Rajnish Kumar, against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), which pertained to the assessment year 2015-16. The primary contention was the ex parte nature of the appellate order and the subsequent additions made to the assessee's income, which were based on estimations and without proper verification of documents such as VAT returns and bank statements. The tribunal noted the absence of representation for the assessee at the first appellate level and the reliance on estimations by the Assessing Officer, which were not substantiated by concrete evidence. The tribunal decided to remand the case back to the CIT(A) for a thorough examination of the evidences and a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714222 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT SINGH CHAUHAN
• Assessee Lawyers: GURNEET KAUR
• Keywords: Opportunity of being heard; Corroborative evidences; Principle of natural justice

Judgement Text

"आयकर अपीलीय अधिकरण ‘ए’ न्यायपीठ, लखनऊ। IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW श्री क ुल भारत, उपाध्यक्ष एवं श्री अनादि नाथ मिस्श्श्रा, लेखा सिस्श्य क े सिछ BEFORE SHRI KUL BHARAT, VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER आयकर अपील सं/ ITA No.321/LKW/2025 ननिाारण वर्ा/ Assessment Year: 2015-16 Rajnish Kumar Vill Nevalganj, Hasanganj, Unnao-209801. v. Assessment Unit Income Tax Department Delhi. PAN:CGJPK0108G अपीलाथी/(Appellant) प्रत्यथी/(Respondent) अपीलाथी कक और से/Appellant by: Ms Gurneet Kaur, Adv प्रत्यथी कक और से /Respondent by: Shri Amit Singh Chauhan, CIT(DR) सुनवाई कक तारीख / Date of hearing: 05 08 2025 घोर्णा कक तारीख/ Date of pronouncement: 07 08 2025 O R D E R PER KUL BHARAT, VICE PRESIDENT.: This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 28.02.2025 pertaining to the assessment year 2015-16. The assessee has raised the following grounds of appeal: - “1 Because on the facts and in the circumstances of the case the order of Ld. CIT(A), NFAC is bad in law and deserves to be quashed being illegal. 2. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has erred in law and in fact in passing the impugned ex parte appellate order without affording reasonable and sufficient opportunity of being heard to the appellant, thereby violating the principles of natural justice. 3. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has erred in confirming the action of the Assessing Officer in estimating the net profit at 25% as against 17.5% declared by the appellant, without properly considering the nature and volume of business, and without examining supporting documents such as sample bills, invoices, and VAT returns. Printed from counselvise.com ITA No.321/LKW/2025 Page 2 of 4 4. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has erred in confirming the addition of Rs. 28,09,713/made by the Assessing Officer arbitrarily and without assigning any cogent reason or conducting proper verification. 5. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has erred in confirming the rejection of the proprietor’s opening capital and accumulated brought-forward capital from earlier years, which had been duly reflected in the books of account and supported by tax audit reports, despite the fact that the assessee has been carrying on the business since 2011. 6. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has erred in not appreciating that the assessee is the owner of 20.2 bighas of agricultural land and that the capital reflected in the accounts is genuine and disclosed, and no inquiry has been conducted to disprove the same. 7. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has failed to appreciate the explanation and supporting evidence provided regarding the amount of Rs. 1,59,14,428.16/- being sourced from the father of the assessee from his savings account, and the same was wrongly treated as unexplained without proper inquiry, 8. Because on the facts and circumstances of the case, the learned CIT(A), NFAC has erred in confirming the addition of Rs.47,800/- pertaining to the outstanding payment to creditors, without verifying the appellant’s submissions and without affording an opportunity to explain the same. 9. The appellant craves for leave to add, modify, amend or delete any other and further ground of appeal with permission.” 2. The facts in brief are that the Assessing Officer was having information suggesting that the income to the tune of Rs.1,21,73,178/- has escaped assessment in A.Y. 2015-16. Therefore, the case was re-opened and statutory notices were issued to the assessee. During the course of assessment proceedings, it was stated by the assessee that the cash deposited in the bank accounts were out of sale made during the year. Thereafter, the Assessing Officer proceeded to estimate the profit on this amount @ 25% and further made an addition of Rs.5,00,000/- and thereby the Assessing Officer assessed the income at Rs.67,74,319/-. Aggrieved by this, the assessee preferred appeal before the Ld. CIT(A), who decide the appeal exparte against the assessee. Now the assessee is in appeal before this Tribunal. Printed from counselvise.com ITA No.321/LKW/2025 Page 3 of 4 3. Apropos to the grounds of appeal, the Ld. Counsel for the assessee contended that in the interest of principles of natural justice, the assessee may be granted one more opportunity to represent his case. It is contended that the assessee is ready to submit all relevant evidences before the Ld. CIT(A) in support of his claim. Therefore, she prayed that the matter may be remanded back and the authorities below may be directed to provide adequate reasonable opportunity. 4. On the other hand, the Ld. Departmental Representative (DR) opposed the submission and supported the orders of the lower authorities. 5. Heard, the Ld. Representatives of the parties and perused the material available on record. Undisputedly, there was no representation on behalf of the assessee before the First Appellate Authority. Therefore, the First Appellate Authority proceeded to sustain the impugned addition. Before us, the Ld. Counsel for the assessee contended that the appeal has been dismissed on account of non-submissions of the documentary evidences. It is also contended that the assessee would submit the requisite details, if one more opportunity is granted before the lower authority. Further, the addition is made purely on estimation basis without giving any basis for such estimation. It is not in dispute that the substantial addition of Rs.31,03,634/- is based upon the estimation made by the Assessing Authority. It is seen that in support of his claim of deposit day to day sales, the assessee had furnished copy of VAT return which has been duly recorded by the Assessing Officer. Further, it was stated before the Assessing Officer that the unsecured loan received from his father amounting to Rs.15,95,000/- and secured loan from bank of Rs. 13,33,594/-. The Assessing Officer without verifying these facts made impugned addition. Therefore, Printed from counselvise.com ITA No.321/LKW/2025 Page 4 of 4 considering the totality of facts and interest of justice, we deem it appropriate and expedient to restore these grounds before the Ld. CIT(A) who would decide afresh after making or causing verification of correctness of the claim of the assessee. 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 07/08/2025. Sd/- [अनादि नाथ मिस्श्श्रा] Sd/- [क ुल भारत] [ANADEE NATH MISSHRA] [KUL BHARAT] लेखा सिस्श्य/ACCOUNTANT MEMBER उपाध्यक्ष/VICE PRESIDENT DATED: 07/08/2025 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File //True Copy// Printed from counselvise.com "