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Judgment
ORDER
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 03.11.2025 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 26.03.2025 was confir med.
The facts of the case are that the assessee filed his return of income for A.Y. 2020-21 declaring total income of Rs.8 ,32,220/-. Subsequently, the assessment was reopened u/s 147 of the Act pursuant to notice issued u/s 148 dated 27.03.2024 on the basis of informatio n receiv ed from the Investigation Wing regarding alleged unexplained cash transactions w ith M/s Omaxe Ltd. The reopening was based on a search conducted u/s 132 in the case of Omaxe Group on 14.03.2022, wherein a hard disk seized from the premises of Omaxe Group allegedly contained excel shee ts reflecting unaccounted cash transactions with customers. As per the information gathered, the assessee was alleged to have made unexplained cash payments aggregating to Rs. 1 ,0 0,00,000/- to M/s Omaxe Ltd . in relation to Chandigarh Plo tted Colony- II and Investment Project-Palwal during F.Y. 2019-20 relevant to A.Y. 2020-21. During the reassessment pro ceedings, notices u/s 142(1) and 143(2) were issued and the assessee furnished replies from time to time. The assessee submitted that the transactions re lating to Chand igarh Plotted Colony-II were thro ugh banking channels and denied having made any cash payments to M/s Omaxe Ltd. The assessee also furnished confirmatio n letters issued by Omaxe Ltd. regarding transfer/adjustment of earlier booked units. However, the Assessing Officer relied upon the data found in the seized hard disk, state ments recorded during search proceedings in the case of Omaxe Group, and the investigation report to conclude that the assesse e had made cash payments amo unting to Rs. 1,00,00 ,000/- for purchase of immovab le properties in the projects of Omaxe Ltd. at Chandigarh and Palwal. Accord ingly, the Assessing Officer treated the amount of Rs. 1,00,00,000/-as unexplained investment u/s 6 9 of the Income Tax Act and added the same to the inco me of the assessee.
Aggrieved by the assessment order, assessee filed appeal before the ld. CIT(A) which was dismissed ex-pate on the ground that the appellant has failed to respond to the various notices sent as find mentioned in paragraph 7.1 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 . For that in vi ew of the facts and i n t he circumstances, Ld. CIT(A ) er red i n passi ng the ex-parte order and in vi ew of the facts and in the circumstances the impugned appeal may ki ndly be set aside for re-adj udication and it may be held accordi ngly .
2.Witho ut pr ejudice to Ground No. 1 above, L d. CIT(A) has erred in af fi rming the validity of the impugned orde r pass ed by AO u/s 153C/ 143(3) and in view of the facts and in the circumstanc es it may be held accordi ngl y.
3.Witho ut prej udic e to Gr ounds No. 1 & 2 above , Ld. CIT(A) err ed i n not app reciati ng the fact that t he alle ged satisfacti on so recorded i n the case of Alankit Group and alli ed pers on wi thout satisfying the requir ement of s ec. 153C in that respect and such satisfactio n is mechanical and as s uch the impugned pr oceedi ngs and t he consequent order are bad i n law and it may be held accordi ngl y.
4.Witho ut prejudice to Grounds N o. 1 to 3 above, Ld. CIT(A) was wholly unjus ti fied i n affi rmi ng t he additi on of Rs. 1,49,000/- u/s 69A and in view of the facts a nd in the circums tances such additi on is l iable to b e deleted and it may be held accordi ngly.
5.Witho ut prejudice to Grounds N o. 1 to 4 above, Ld. CIT(A) was wholly unjus ti fied i n affi rmi ng t he additi on of Rs. 30,00,000/- u/s 68 and i n view of the facts a nd in the circums tances such additi on is l iable to b e deleted and it may be held accordi ngly.
6.Witho ut prejudice to Grounds N o. 1 to 5 above, Ld. CIT(A) was wholly unjus ti fied i n affi rmi ng t he additi on of Rs. 3 5,00,000/- u/s 69A and in vie w of the fac ts and in the circums tances such additi on is l iable to b e deleted and it may be held accordi ngly.
7.Witho ut prejudice to Grounds N o. 1 to 6 above, Ld. CIT(A) was wholly unjus ti fied i n affi rmi ng t he additi on of Rs. 30,11,670/- u/s 69A and i n view of t he facts and in the circums tances such additi on is l iable to b e deleted and it may be held accordi ngly.
8.Witho ut prejudice to Grounds N o. 1 to 7 above, Ld. CIT(A) was wholly unjus ti fied i n affi rmi ng t he additi on of Rs. 2,89,820/- u/s 69A and in view of the facts a nd in the circums tances such additi on is l iable to b e deleted and it may be held accordi ngly.
9.Witho ut prejudice to Gro unds No. 1 to 8 above, the impugned additions have been made merely based on the alleged s tateme nt of person of Alankit G roup and t he alleged i ncrimi nat ing doc uments wi t hout even providing the same to the appellant or wit hout even al lowi ng cr oss-exami nati on of such person / doc uments a nd as s uch t he consequent additions are in vi olati on of natur al justice and henc e the ad ditions so made i n such respect is bad in law and it may be held accordi ngl y.
10.Witho ut prej udice to the afor esaid, the impugned order u/s 153C and conseque nt or der, t he appr oval so obtai ned u/s 153D is mechanical and does not satisf y the requirement of sec. 153D and i n vi ew of t he fact s and in the circumstanc es the c ons equent o rder u/s 153C i s bad in law and it may be held accordi ngl y.
11.For that in vi ew of the facts and i n t he circumstances, Ld. CIT(A) was wholly unj ustifi ed in chargi ng interes t u/s 234A, 234B, 234C & 234D res pectivel y and such acti on of Ld. CIT(A) is bad and illegal and it may be held accor di ngl y.”
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 15.09.2025 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 restored to the file of the Ld. CIT(A) for deciding the issue afresh by affording an effective o pportunity 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 Ld. CIT(A) w ithin the period of 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purposes.