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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the asse ssee is d irected against the order dated 12.08.2025 of ld. CIT(A)- 3, Gurgaon passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein the application for additional evidence u/s 46 A was dismissed and addition made vide assessment order dated 28.09.2021 u/ s 69A r.w.s. 115BBE of the Act o f Rs.12,39,620/-was confirmed and appeal was dismissed.
Facts in brief as culled out from the orders of the authorities belo w are that the static surveillance team intercepted an XUV-500 car bearing number HR-60E-35214 occupied by four persons including assessee, Shri Om Prakash on 30.09 .2019 in Panipat wherein cash amount of Rs.77,39,620/- was found in the car. Information regarding interception of cash w as received by investigation wing, Panipat who re corded stateme nt of all the four perso ns u/s 132A o f the Act wherein it became k nown that a sum o f Rs.12,39,620/- out of total of Rs.77,39,620/- belongs to Shri Om Prakash, assessee. All the four persons including assessee failed to explain the source of the seized cash. The assessee claimed before the inco me tax authorities that t he said cash was pertaining to previous savings and further he had sold some jewe llery of his wife . It was observed by the ld. AO that the assessee failed to submit any documentary evidence in confirmatio n of his statement. It was further observed that assessee has not filed any IT R for A.Y. 2020-21 and failed to file any ITR despite issuance of notice u/s 142(1) of the Act dated 30.06.2021. In these facts and circumstance s, an additio n of Rs.12,39,620/- was made and the Assessing Officer assumed the re turned income at Rs.5,00,000/- and according ly assessed the total income at Rs.1 7,39,620/-.
Aggrieved by the said assessment order, the assessee filed appeal before the ld . CIT(A). An application u/s 46A of the Act along with the additional evidence was also filed. The ld. CIT(A) has dismissed the said applicatio n and also confirmed the addition made by the ld. AO in the assessment order.
Aggrieved by the impug ned order, the assesse e is in appeal before us and has raised the following grounds of appeal:
“1 . On facts and i n law, the Ld. CIT(A) has er red in upholdi ng the ass essme nt framed u/s 144, ignori ng that the appellant had duly res ponded to notice s and fi led explanati ons wi th sup porting evid ences, whic h were not considered by the Asses sing Officer. The order is bad i n law and liable to be quashed.
2.That the L d. C IT(A) has gros sly er red i n passi ng the order wit hout provi ding the opportunity of bei ng heard.
3.The L d. CIT(A) has grossly err ed in sust ai ning the additi on of Rs . 12,39,620/- as unexplained money u/s 69A, ignoring t hat the appellant had duly explai ned t he source of cash being (i ) busi ness savings from his s mall juice stall, and (ii) a s um of Rs . 5,00,000/- received by way of gift from his wife, supported by a gift deed and bank stat ements. The additi on is ar bitrary, wi thout evi denc e, and unsust ai nable in la w.
4.The authorities below hav e err ed i n law a nd on facts in presumi ng a r eturned income of Rs. 5,00,000/- despite no return being filed , and i n t reati ng the same as “r et ur ned i ncome” for t he purpose of ass essme nt. Suc h presumption is beyond t he provisions o f t he Income Tax Act, arbitrary and untenabl e.
5.The Ld. C IT(A ) has erre d in confirming t he additions without granti ng adequate opportunit y to the appellant, and wi tho ut properly c onsideri ng the additional evidenc es filed under R ul e 46A. The impugned order des erves to be set aside o n this ground alone.
6.The authoriti es below hav e err ed i n law in initiati ng/s ust aini ng penalty procee dings u/s 271AAB(1A), despite t he fact that the addition i tself is unj ustified and there was no “undi sclos ed i ncome” a s defined therein.
7.The impugned order is arbitrary, contr ary to fac ts and law, a nd des erves t o be quashed. T he appellant prays for del eti on of enti re additions of Rs. 17,39,620/- and consequential relief.
8.That t he cas h amounti ng to Rs . 12,3 9,620/- has bee n seized and lyi ng wit h the i ncome tax departme nt. Ther efore, the res ul tant tax liability on additi on of Rs.12,39,620/- is fully paid. Please consider it as a pre-deposit of tax as per the mandatory conditi on f or filing appeal.
9.That the appellant crave s t o l eave t o add, alt er, amend, modify, substitute, del et e any of the ground(s) of appeal at or be fore the time of t he fi nal heari ng of the appeal, if nec essary.
10.It is a humbl e reques t to please provide the personal heari ng the explain the matter i n detail befor e passing the order.”
We have heard the ld. AR and the ld. DR. The ld. AR at the very outset submitted that the impug ned order has been passed without giving effective opportunity of hearing and further that the application u/s 46A of the Act has been decided without any reasons and the procedure laid down u/s 250(6) has not been followed by the ld. C IT(A). It is therefore prayed that the matter may be remitted back to the ld. CIT(A) for deciding afresh after giv ing effective opportunity of hearing and also to co nsider the additional ev idence so filed before the ld. CIT(A).
The ld. DR on the other hand while supporting the decision of the ld. lower authorities stated that the assessee has failed to submit the necessary evidence /material before the Assessing Officer, accordingly, the ld. C IT(A) has rightly dismissed the additio nal evidence application and as such prayed for dismissal of the appeal.
We have conside red the rival submissions 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;”
On perusal of the impug ned order, we have noticed that the ld . CIT(A) o bserved that the appellant did not file his ITR for A.Y. 2020-21 and failed to respond to statutory notice u/s 142(1) of the Act. Even after show-cause, no reply was filed. It is to be noticed that there is no material to show that the show-cause notice and the statutory no tice u/s 142(1) were ever served upon the assessee or received by the assessee. In the absence of said evidence , we are convinced that effe ctive opportunity of hearing as mandated by sectio n 250(2)(a) of the Act has not been given by the ld. CIT(A).
Further, we have noticed that while rejecting the application u/s 46A of the Act, the ld. CIT(A) has not elaborated reasons for rejecting the same and has thus not followed the provision of section 250(6) of the Act. While dismissing the application, it has been observed by the ld. CIT(A) that the appellant has submitted additional evidence u/s 46A of the Act but the appellant w as no t prevented by any justifiable reason to not furnish the do cuments and did not fulfill any of the criter ia under the provisio n of Rule 46A. Hence, this plea is rejected. These observations of the ld. CIT(A) shows that nothing has been mentioned while rejecting the application u/s 46A of the Act as to what was claimed by the assessee in support of his applicatio n and w hat justification was give n and the observation in that regard w hile rejecting the applicatio n are cryptic which shows that the ld. CIT(A) has not followed the princip les laid down u/s 250(6) of the Act.
For the above reasons, we are of the considered view that the impugned or der is not sustainable and accordingly set aside by remitting the file to the ld. CIT(A) for deciding afresh after giving e ffective opportunity of hear ing fo r producing material/evidence by the assessee. The assessee shall present its case/mater ial/submissions to the ld. CIT(A) within a period of 60 days who shall decide the matter as per law in view of the observation made by us.
In the result, the appeal of the assessee is allowed for statistical purposes.