SHRI MOHAMMAD IMRAN KHAJAWAL,SRINAGAR V. INCOME TAX OFFICER WARD-1, SRINAGAR

ITA 306/ASR/2025

AI Insights

The case involves an appeal by Mohd. Imran Khajawal against an ex-parte order from the ld. CIT(A) for the Assessment Year 2014-15, which was passed without a fair hearing. The appellant argued that he was not given a reasonable opportunity to be heard, as notices were sent to an inoperative email and managed by a severely ill Chartered Accountant. The Income Tax Officer had made significant additions to the appellant's income under Section 69A, classifying business receipts as 'income from other sources' without proper justification. The Tribunal found that the issues were not discussed on merit and remanded the case for a thorough reassessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838677 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 17-04-2025
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Business income; Opportunity of being heard; Principle of natural justice
• Section: 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (PHYSICAL COURT) BEFORE SH. UDAYAN DASGUPTA, JUDICIAL MEMBER AND SH. KRINWANT SAHAY, ACCOUNTANT MEMBER I.T.A. No. 306/Asr/2025 Assessment Year: 2014-15 Mohd. Imran Khajawal, Killi Masjid Saraf Kadal, S.R. Gunj, Srinagar, UT-J & K 190002 [PAN: AXSPK 9491N] (Appellant) Vs. Income Tax Officer, Ward-1, Srinagar UT- Jammu & Kashmir (Respondent) Appellant by Respondent by : : None (Adjournment application) Sh. Charan Dass, Sr. D. R. Date of Hearing Date of Pronouncement : : 17.02.2026 19.02.2026 ORDER Per Krinwant Sahay, A.M.: Appeal in this case has been filed against the order dated 11.02.2025 passed by the ld. CIT(A) NFAC, Delhi for Assessment Year: 2014-15. 2. Grounds of appeal taken by the assessee are as under: Printed from counselvise.com 2 I.T.A. No. 306/Asr/2025 Assessment Year: 2014-15 “1. Violation of Principles of Natural Justice The impugned order has been passed ex-parte, in blatant violation of the principles of natural justice, as the appellant was not afforded a fair and reasonable opportunity of being heard. The notices under Section 250 were allegedly dispatched to the registered email addresses associated with the appellant's return of income for the relevant assessment year-namely, [e-mail], belonging to the Chartered Accountant (CA) handling the appeal, and [e-mail], an inoperative email ID created by a former employee, to which the appellant has no access. Unfortunately, the appellant remained unaware of these notices due to the CA's severe liver ailment, which incapacitated him and prevented him from managing the case or communicating the developments to the appellant. Consequently, the appellant was deprived of a meaningful opportunity to respond to the proceedings, leading to an adverse order passed in his absence. These extraordinary and unforeseen circumstances, beyond the appellant's control, warrant interference by this Hon'ble Authority to uphold the fundamental tenets of justice. Therefore, in the interest of fairness and equity, the appellant humbly prays for the impugned order to be set aside and for an opportunity to present his case on merits. Wrongful Addition U/S 69A The AO invoked Section 69A despite the appellant declaring the source as business income. Cash deposits in bank accounts represent legitimate business receipts and cannot be taxed as \"unexplained money\" The Assessing Officer (AO) mechanically reclassified business receipts (declared under Section 148) as \"income from other sources\" without any evidentiary basis or justification. The appellants business in gold jewellery retail fully explains the cash deposits. Printed from counselvise.com 3 I.T.A. No. 306/Asr/2025 Assessment Year: 2014-15 2. Non-Consideration of Submissions The appellant duly filed a return under Section 148 declaring an income of Rs.10,95,961/- and submitted replies to the AO. However, the AO disregarded these submissions in violation of Section 144B. 3. Portal Misinformation Leading to Non-Compliance The Income Tax Portal displayed a deadline of 31/03/2024, creating a bona fide belief that proceedings were ongoing. The AO, however, passed the assessment order prematurely dated 09/05/2023, bearing DIN No. ITBA/AST/S/147/2023-24/1052690205(1) causing undue hardship to the appellant. 4. The Ld. AO erred in both facts & laws by making an addition of Rs. 6,21,29,500 u/s 69A of the Act, when the entire cash deposits represent sales made in ordinary course of business & declared in ITR filed under section 148 of the income tax act 1961 & the ITR stands accepted by AO. 5. That the assessment is based on presumptions, conjectures and surmises and AO has not acted fairly. 6. The appellant respectfully reserves the right to add, amend, alter, modify, substitute, delete and/or rescind all or any of the grounds of appeal at any stage of the proceedings, including during the course of the hearing, if necessary, in the interest of justice.” 3. At the very outset, the counsel of the assessee brought before the bench during proceedings before us it was argued that the order passed by the ld. CIT(A) is an ex-parte order, the counsel, therefore, argued Printed from counselvise.com 4 I.T.A. No. 306/Asr/2025 Assessment Year: 2014-15 that the case has not been discussed or assessed on merit before the lower authorities. 4. The ld. DR relied on the order of the ld. CIT(A). 5. We have considered the submissions of the ld. counsel regarding this order being an ex-parte order before the ld. CIT(A) in the appellate proceedings. 6. Thus, we find that the issues in this case have not been discussed on merit after due consideration of assessee’s submission. 7. Therefore, keeping in view, the element of natural justice with the assessee, we are inclined to remand this appeal back to the file of the ld. CIT(A) for passing an order de-novo after giving adequate opportunities to the assessee of being heard as well as to allow him to file written submissions if any. The assessee will have all the legal issues before him. The assessee is also directed to co-operate with the department for completion of proceedings before authorities below. Printed from counselvise.com 5 I.T.A. No. 306/Asr/2025 Assessment Year: 2014-15 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court as on 19.02.2026 Sd/- Sd/- (Udayan Dasgupta) (Krinwant Sahay) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order Printed from counselvise.com "