RAKESH MALHOTRA ,CHANDIGARH V. INCOME TAX OFFICER, WARD-2(1), CHANDIGARH , CHANDIGARH

ITA 392/CHANDI/2025

AI Insights

The case involves appeals by Rakesh Malhotra against the orders of the CIT(A), National Faceless Appeal Centre, Delhi, for the assessment years 2017-18 and 2018-19. The primary contention was the ex-parte nature of the orders dismissing the appeals without discussion on legal issues or merits, and without proper opportunity of hearing, which the appellant argued was against the principles of natural justice. The Tribunal found that both the assessment orders and the CIT(A)'s orders were passed ex-parte without considering the merits, leading to a decision to remand the cases for fresh adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711462 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: TEJMOHAN SINGH
• Keywords: Unexplained investment; Principle of natural justice; Competent authority
• Section: 147; 144

Judgement Text

"आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 391 & 392/CHD/2025 Ǔनधा[रण वष[ / Assessment Years : 2017-18 & 2018-19 Rakesh Malhotra, C/o Tej Mohan Singh, Advocate, 527, Sector 10, Chandigarh 160011 बनाम Vs. The ITO, Ward-2(1), Chandigarh èथायी लेखा सं./ PAN NO: AAVPM7247C अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( PHYSICAL HEARING ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh. Tej Mohan Singh, Advocate राजèव कȧ ओर से/ Revenue by : Dr.Ranjit Kaur, Addl. CIT, Sr.DR सुनवाई कȧ तारȣख/Date of Hearing : 21.07.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 22.07.2025 आदेश/Order Per Bench : Captioned appeals have been filed by the assessee against the separate orders each dated 06.03.2025 passed by the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi. 2. The Assessee has preferred common grounds of appeal for both the assessment years wherein, although numerous grounds have been raised by the Assessee but Printed from counselvise.com 391 & 392-Chd-2025 Rakesh Malhotra, Chandigarh 2 the sole issue raised in both the appeals is that the Ld. CIT(A) has erred in passing an ex-parte order dismissing the appeal of the Assessee in limine without discussion on legal issues raised as well as on merits and even without affording a proper opportunity of hearing which is against the principles of natural justice and as such the order passed by is arbitrary and unjustified, opposed to law and facts of the case and, thus, is untenable. 3. The brief facts, which too are somehow identical, culled out from the appeal for AY 2017-18 (ITA No.391/Chd/2025), as per the order of the CIT(A), are as under: - 3.1 The appellant is an individual. As per information available with department regarding appellant's purchase of property from Mis. Bajwa Developers Ltd. By making a payment of Rs.3,25,200/- during the A.Y.2017- 18, out of which Rs.1,25,200/- was paid in cash, the case was re-opened after taking necessary approval from competent authority. Notices were issued and served to the appellant accordingly, but the appellant had not submitted the required reply. Printed from counselvise.com 391 & 392-Chd-2025 Rakesh Malhotra, Chandigarh 3 3.2 As per the information available and collected from other sources, the appellant had made a payment of Rs.3,25,200/- during the F.Y 2016-17 relevant to 2017-18 to M/s. Bajwas Developers Ltd. Out of which Rs.1,25,200/- was paid in cash and Rs.2.00,000/- was paid through banking channel. The appellant had failed to explain cash transaction of Rs.1,25,200/-. Hence in the absence of proper explanation and supporting documents, the cash payment of Rs.1,25,200/- was added to the total income of the appellant as unexplained investment u/s.69 of the Income Tax Act, 1961 for the A.Υ.2017-18. Aggrieved, the appellant is in appeal against the said assessment order passed u/s 147 r.w.s 144 r.w.s 144B of the IT Act, 1961. 5. At the very outset, the Counsel of the assessee brought to the notice of the Bench that the ex-parte assessment order was passed u/s 144/147 r.w.s. 144B of the Act. Similarly, the Ld. CIT(A) also has passed an ex- parte order because of the non-compliance of the assessee. The Ld. counsel argued that as the assessee did not receive notice issued by the NFAC, Delhi, therefore, it could not be complied with. However, the submission of the ld. Counsel is that despite the fact that there was no Printed from counselvise.com 391 & 392-Chd-2025 Rakesh Malhotra, Chandigarh 4 compliance on the part of the assessee, the Ld. CIT(A) was required to pass a speaking order on merits on the basis of material available on record but that has not been done. 6. That the Ld. DR relied on the orders of the authorities below. 7. We have heard the parties and perused the material available on record. We have also gone through the assessment orders passed by the Assessing Officer and findings of the Ld. CIT(A) in the appellate orders. We find that the orders passed by the Assessing Officer are an ex- parte orders passed u/s 144 in both the cases without considering the issues on merits and the Ld. CIT(A) also sustained the same without going into the merits of the case by passing ex-parte orders. Therefore, keeping in view the element of natural justice, we are of the considered view that the matters in both the cases should be remanded back to CIT(A) for fresh adjudication. Accordingly, these cases are remanded back to the CIT(A) for adjudication afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to Printed from counselvise.com 391 & 392-Chd-2025 Rakesh Malhotra, Chandigarh 5 the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(A). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. The appeals of the Assessee are allowed for statistical purposes. 8. In the result, both the appeals are allowed for statistical purposes. Order pronounced on 22.07.2025. Sd/- Sd/- ( LALIET KUMAR ) ( KRINWANT SAHAY) Judicial Member Accountant Member “आर.क े.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "