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2026 Supreme(Online)(ITAT) 4136
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
C.N. Prasad, Judicial Member
Anuradha Singh – Appellant
Versus
Circle 5 (1)(1) Gautam – Respondent
ITA No.8303/Del/2025
For the Appellants/Petitioners: Sh. Shafiq Khan
For the Respondents: Ms. Anjani Suri, Sh. Manoj Kumar, Sr. DR
Addition based on seized materials and third-party statements requires providing copies to assessee and cross-examination opportunity, failing which violates natural justice mandating remand for fresh assessment.
Headnote:(A) Income-tax Act, 1961 - Sections 69 r.w.s. 115BBE, 147 - Unexplained cash payments - Addition based on seized Excel sheet from search on real estate group alleging cash payment for commercial unit purchase - Assessee claimed all payments through banking channels supported by certificates and bank statements - Assessing Officer relied on investigation report without providing seized materials or cross-examination opportunity - CIT(A) upheld addition holding right to cross-examination not absolute and documentary evidence sufficient - Tribunal held that assessee not provided materials basis for addition nor opportunity to cross-examine persons whose statements corroborated seized data - Detailed objections not addressed - Matter remitted to AO to provide all relied materials including cross-examination if statements used, dispose objections afresh, and reassess. (Paras 5, 6, 7)
(B) Principles of natural justice - Cross-examination - Where addition based on third-party seized documents and statements, assessee entitled to inspection of materials and cross-examination if statements relied upon - Failure to provide renders addition unsustainable pending compliance. (Paras 6, 7)
Facts of the case:
Assessee appealed addition of cash payments for commercial unit, denying cash transactions and furnishing banking payment proofs. Authorities below sustained addition on Excel sheet from search without affording material access or cross-examination.
Findings of Court:
Issue restored to AO for providing relied materials, cross-examination if applicable, addressing objections, and fresh assessment.
Issues: Validity of addition under section 69 without material disclosure and cross-examination; compliance with natural justice in reassessment proceedings.
Ratio Decidendi: Assessee must be supplied all basis materials for addition including seized documents and statements for cross-examination where relied upon; non-provision and non-addressal of objections violates natural justice requiring remand.
Result: Appeal allowed for statistical purposes; matter remitted to AO.
| Table of Content |
|---|
| 1. appeal against addition under section 69 upheld by cit(a). (Para 1) |
| 2. assessee contests addition on unexplained cash payments. (Para 2 , 3 , 4) |
| 3. tribunal examines natural justice violation claims. (Para 5 , 6) |
| 4. remitted to ao for providing materials and cross-examination. (Para 7) |
| 5. appeal allowed for statistical purposes. (Para 8) |
ORDER
PER C.N. PRASAD, JM,
This appeal is filed by the assessee against the order of the CIT(A)/NFAC dated 10.11.2025 for the A.Y. 2020-21 in sustaining the addition of Rs.32,13,800/- made u/s.69 of the Act. The assessee in its appeal has raised following grounds of appeal :-
1. BECAUSE the Assessment in bad in law because whimsical and arbitrary additions has been by the Ld. Assessing Officer Circle-5(1)(1) Gutam Budh Nagar, NOIDA while framing impugned Assessment Order dated 20.03.2025 U/s. 147 of the Income-tax Act and which were erringly upheld by Ld. CIT(Appeal) while passing impugned Order dated 10.11.2025.
2. BECAUSE Ld. Assessing Officer while passing impugned Assessment Order dated 20.03.2025 erred/misconstrued and made huge addition of Rs. 32.13,800/- (Thirty Two Lakhs Thirteen Thousand Eight Hundred Only) U/s 69 r.w.s. 115BBE of IT Act, 1961 by considering information retrieved/extracted from Investigation DDIT (Inv.)-2, Chandigarh that the Appellant has made unexplained Cash Payments of Rs. 32,13,800/- (Thirty Two Lakhs Thirteen Thousand Eight Hundred Only) during Financial Year 2019-20 to M/s. Omaxe Limited against purchase of one Commercial Unit at Omaxe Connaught Place-IV. Greater Noida, UP and which was erringly upheld by Ld. CITIAppeal) vide impugned Order dated 10.11.2025.
3. BECAUSE Ld. Assessing Officer while passing impugned Assessment Order dated 20.03.2025 did not adher to Principal of Natural Justice as the Appellant was not permitted to cross-examine witnesses by Adjudicating Authority though statements of those witnesses were made as basis of impugned order and which amounted to serious flaw and which made impugned order nullity as it amounted to violation of principles of natural justice. Reliance is placed on case of Andaman Timber Industries vs. CICE (2015) 281 CTR 0241(SC).
4. BECAUSE the Ld. Assessing Officer while passing impugned Assessment Order dated 20.03.2025 erred in Charging interest U/s 234A, 234B & 234C and in fact in initiating penalty proceedings U/s 271AAC of the Income Tax Act, 1961.
That the appellant reserves the right to raise any other ground of Appeal in addition to the grounds of appeal as mentioned above.
2. The Ld. Counsel for the assessee at the outset submitted that the addition in the case of the assessee was made on the ground that the assessee made cash payment of Rs.32,13,800/- while purchasing the commercial unit at OMAXE, Connaught Place-4, Greater Noida U.P. The Ld. Counsel for the assessee submitted that based on the statement recorded in the course of search action on M/s. Omaxe Group and consequential seizure of voluminous evidences and one of such evidences is Excel file named main report in which it was recorded that the assessee paid the amount to M/s. Omaxe Group for purchase of commercial unit. The Ld. Counsel for the assessee submitted that the witnesses were never put to the assessee nor given any opportunity to cross examine and therefore, there is violation of principle of natural justice.
3. The assessee also made further written submissions which are as under :-
DETAILED SUBMISSION/REPLY TO THE GROUND OF APPEAL ALONGWITH SUPPORTING ANNEXURES:
1. BECAUSE the Assessment is bad in law because whimsical and arbitrary additions has been by the Ld. Assessing Officer Circle-5(1)(1) Gutam Budh Nagar, NOIDA while framing impugned Assessment Order dated 20.03.2025 U/s. 147 of the Income-tax Act and which were erringly upheld by Ld. CIT(Appeal) while passing impugned Order dated 10.11.2025,
OUR DETAILED SUBMISSION/REPLY TO THE ABOVE GROUND OF APPEAL:-
Impugned Assessment Order dated 20.03.2025 passed by Ld. Assessing Officer and
