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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 25.09.2025 of Learned Co mmissioner of Income Tax (Appeals)/National Facele ss Appeal Centre (hereinafter referred to as the “CIT(A)/NFAC”), passed u/s 250 of the Income T ax Act, 1961 (hereinafter referred to as “the Act”) wherein the addition made u/s 69 of the Act, vide assessment order dated 24.12.2019 was confir med.
The facts o f the case are that the assessee filed her return of income for A.Y . 2017-18 on 02.08.2017 d eclaring total income of Rs. 3,83,800/-, which was processed u/s 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny thro ugh CASS on the issue of cash deposits and transactions in property. Notices u/s 143(2) and 142(1) were issued from time to time and the asse ssee furnished cer tain details and docume nts online through the IT BA portal. During the assessment proceedings, the Assessing Officer o bserved from the bank statements and 360 degree profiling that the assessee had deposited substantial cash in bank accounts during F.Y. 2016-17 and had also purchase d immovable properties. The assessee explained that the cash deposits were out o f savings and cash- in- hand accumulated fro m tuition income and commission/renting activities over earlier years. Consequently, cash deposits amounting to Rs. 13,40,000/- were treated as unexplained income u/s 69A r.w.s. 115BBE of the Act. Further, the Assessing Officer noticed that the assessee had purchased two properties situated at Prashant Vihar, New Delhi, for a total consideration of Rs. 65,02,423/-. T he asse ssee was asked to explain the source of investment and furnish supporting evidence such as bank statements, ITRs, confirmations of parties, and sale/purchase deeds. As the assessee failed to satisfactorily establish the genuineness and creditworthiness of the persons from who m lo ans/repayments w ere allegedly received, the Assessing Officer treated the investment of Rs. 65,02,423/- as unexplained investment u/s 6 9 read with section 115BBE of the Act. Accordingly, the Assessing Officer made additions of Rs. 13,40,000/- on account of unexplained cash deposits and Rs. 65,02,423/- on account o f unexplained investment in properties.
Aggrieved by the assessment order, assessee filed appeal before the ld. CIT(A) w hich was dismissed the same ex-parte on the ground that the appellant has failed to respond to the various notices sent as find mentioned in paragraph 6.2 of the impugned order.
Aggrieved by the impugned appellate ex-parte order, the assesse is in ap peal before us and has raised the fo llowing grounds of appeal:
“1 . On the fac ts and circumstances of t he case, the order passed by the learned Commissi oner of Income Tax (Appeals ) [CIT(A)] i s bad bot h i n t he eye of law and on facts.
2.On the fac ts and circumstanc es of the case, t he Ld. CIT(A) has err ed both on fac ts and in la w i n passi ng t he order wit hout gi ving assess ee an opportuni ty of being heard i n vi olation of the pri ncipl e of nat ural justic e.
3.(i) On t he facts and ci rc ums tances of the cas e, t he lear ned CIT (A) has erred bot h o n facts and i n law in confirmi ng a n addition of Rs. 13,40,000/- under s ecti on 69A r.w.s 115BBE of the Act on account of cash deposited i n the bank account duri ng t he year under consideratio n.
(ii)That the additi on has been co nfirmed des pite the assessee explaini ng the source of cash deposits by submitti ng d etailed c as h fl ow s tat ement before the Assessi ng O ffic er during t he c ours e of assessme nt proc eedi ngs.
4.(i) On t he facts and ci rc ums tances of the cas e, t he lear ned CIT (A) has erred bot h o n facts and i n law in confirmi ng a n addition of Rs. 65,02,423/- under s ecti on 69 r.w.s. 115BBE of the Act on account of unexplained investment i n pr operties.
(ii)That the additi on has been co nfirmed des pite the fact that the assessee has duly submitted sour ce of investment i n such prope rties before the Assess ing Officer duri ng the course of assess ment proc eedings.
5.On the fac ts and circumstances of t he case, the lear ned CIT (A) has erred bot h o n facts and i n law in confirmi ng t he act ion of the AO in l evyi ng tax by invo king the pro visio ns of sec tion 115BBE of the Act despite the fact that the provisions of the s aid section havi ng ca me into fo rce w.e.f. 01.04.2017 same cannot be applie d in the rel evant assessment year c onsideri ng the same as having re trospecti ve effect.
6.That t he appellant craves leave to add, alter or amend any of the grounds of appeal.”
We have heard the lear ned AR and the learned DR. The Ld. AR would submit that the impugned order has resulted into miscarriage of justice as principle of natural justice has no t been fo llowed because no effective opportunity of hearing was given as the assessee had never received the notice after 14.08.2023 when ad journment was sought and therefore the matter may be restored to the file of the Ld. CIT(A) for deciding afresh. Learned DR on the other hand while supporting the judgment of the learned CIT(A) has left to the discretion of the court to consider the submissions of the assessee as per law.
We have co nsidered the rival submission and examined the record, Section 250(2)(a) lays down as under:
“250(2 ) The fol lo wing shall have the right to be heard at the heari ng o f the appeal-
(a)the appellant, either i n person or by an authori zed repres entative;”
Thus, the hear ing mandated by Section 250(2)(a) of the Act is no t a mere formality but a mandatory statutory requirement for following the principle of natur al justice by the quasi-judicial authority.
In view of the ab ove facts and circumstances, it is evident that the impugned order has been passed w ithout effective hearing and principle of natural justice has no t b een followed For these reaso ns, the impug ned order is not maintainable and according ly set aside. T he end of justice shall be met in case the matter is re stored to the file of the Assessing Officer for deciding the issue afresh by affording an effective opportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Assessing Officer within the period of 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purposes.