Case Law Details
Rahul Madhav Goswami Vs DCIT (ITAT Mumbai)
Case Summary:
The case stems from an assessment order passed by the Assessing Officer for the AY 2022-23, wherein the assessee’s return of income was selected for scrutiny resulting in various additions made by the AO. While passing the assessment order, the Assessing Officer also recorded findings treating purchases amounting to Rs. 89.44 crore as unexplained expenditure under Section 69C and cash credits of Rs. 15.01 lakh as unexplained under Section 68 of the Income Tax Act, 1961. However, the same was not added to the computation of taxable income, resulting in apparent inconsistencies in the assessment order. Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). However, the CIT(A), without properly appreciating the submissions and documentary evidences of the assessee, dismissed the appeal without pointing the defects in the said submission.
The assessee, being aggrieved, preferred an appeal before the Income Tax Appellate Tribunal, Mumbai Bench. Advocate Sachin P. Kumar, appearing on behalf of the assessee, effectively argued that the Order of CIT(A) u/s 250 was a non-speaking and unreasonable order since it failed to provide justification for dismissing the appeal. It was further argued that such an order violated the principles of natural justice and thereby, prayed that the impugned order be set aside and the matter be remanded to the CIT(A) for fresh adjudication on merits.
After carefully perusal of the facts and legal position, the Tribunal observed that the CIT(A) failed to comply with statutory duties and principles of fair procedure. The tribunal observed that the CIT(A) obligated to pass an order following the principles of natural justice i.e. a well-reasoned decision must be delivered.
Outcome/Final Judgement:
The Hon’ble ITAT, Mumbai observed that the assessment order itself contained material discrepancies, including findings under Sections 68 and 69C that were not reflected in the computation of assessed income. Further, the Tribunal held that the order passed by the CIT(A) was a non-speaking order and thereby, the affected parties are prejudiced because they cannot identify specific grounds for an appeal. Accordingly, in the interest of justice, the Hon’ble ITAT set aside the order of the CIT(A) and restored the matter to his file for fresh adjudication on merits after granting adequate and reasonable opportunity of being heard to the assessee. This order reinforces the natural principle that judicial and appellate authorities must issue speaking and reasoned orders in line with natural justice for ensuring transparency and enabling effective appellate review.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal filed by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the Commissioner of Income Tax, Appeal-54, Mumbai [in short, ‘CIT(A)’], dated 15.12.2025 for the assessment year (AY) 2019-20.
2. The grounds of appeal raised by the assessee are as under:
1. That, on the facts and in the circumstances of the case, the order passed by the Ld CIT (A), dismissing the appeal filed by the appellant is arbitrary, erroneous, contrary to law and is opposed to the principles of natural justice.
2. That, on facts and in the circumstances of the case, the Ld. CIT (A), has passed the order u/s 250 of the IT Act without giving sufficient opportunity of being heard and thus violating the principles of “audi alteram partem.”
3. That, on the facts and in the circumstances of the case, the Ld. CIT (A), has passed the order u/s 250 in a mechanical way, without application of mind and without appreciating the overall facts of the case
4. That, having regards to the facts and circumstances of the case and in law, the Ld. CIT, Mumbai, has erred in confirming the addition of Rs. 22,00,000/- u/s 68 of the IT Act on account of unexplained cash credits without appreciating the submissions made by the appellant and without appreciating the correct facts of the case.
5. That, on the facts and in the circumstances of the case and in law, the Ld. CIT (A), has erred in confirming the addition of Rs. 1,05,263/-u/s 69 of the IT Act, on account of unexplained investment without appreciating the submissions made and documentary evidences provided by the appellant during the course of the impugned appellate proceedings
6. That, having regards to the facts and circumstances of the case and in law, the Ld. CIT (A), has erred in confirming the addition of Rs. 14,00,785/-u/s 69A on account of unexplained money without appreciating the submissions made and documentary evidences provided by the appellant against the said impugned addition
7. That, having regards to the facts and circumstances of the case and in law, the Ld. CIT (A), has erred in confirming the addition of Rs. 4,33,529/-u/s 69C r.w.s. 115BBE of the IT Act on account of unexplained expenditure without appreciating the submissions made and documentary evidences provided by the appellant.
8. That, on the facts and circumstances of the case and in law, the Ld. CIT (A), has erred in confirming the addition of Rs. 12,83,000/- u/s 69C r.w.s. 115BBE on account of unexplained expenditure without appreciating the submissions made by the appellant in this regard and has simply confirmed the said addition by merely concluding that the notices issued u/s 133(6) of the IT Act remained unserved or un responded.
9. That, on the facts and circumstances of the case and in law, the Ld. CIT (A), has failed to appreciate the fact that drawing adverse inferences solely on the basis of non responses from the third party to whom the notice u/s 133(6) of the IT Act has been issued, is bad in law
10. That, on the facts and circumstances of the case and in law, the Ld. CIT (A), has erred in confirming the addition of Rs. 4,03,431/-u/s 69C r.w.s. 115BBE on account of unexplained expenditure without appreciating the submissions made by the appellant and has dismissed the appeal of the appellant without highlighting any defect in the submissions so made by the appellant during the course of the impugned appellate proceedings
11. That, having regards to the facts and circumstances of the case and in law, the Ld. CIT (A), has erred in passing the impugned appellate order without verifying the overall facts and circumstances of the case and the same may kindly be treated as void ab initio.
12. That, having regards to the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in passing a non-speaking order in a mechanical manner, without giving any detailed reasoning for the dismissal of each ground of appeal taken before the CIT(A).
13. That, the appellant may kindly be allowed to add, alter or modify any other points to the grounds of appeal at any time before or at the time of hearing
14. That, the aforesaid grounds of appeal are without prejudice to each other.
15. Any other order in the interest of justice may kindly be passed.”
3. Facts of the case, in brief, are that the assessee filed return of income for the AY 2022-23 on 24.09.2022 declaring total income of Rs.24,35,990/-. The case was selected for complete scrutiny. The AO has given the details of the opportunities granted to the assessee at para 2 and 4.1 of the assessment order. The content of the notice u/s 142(1) has been reproduced in the assessment order. While analyzing the synopsis of submission made by the assessee, the AO found that the assessee had shown net purchases of Rs.89,44,85,674/-. Since the assessee failed to establish genuineness of such purchases and the source of funds utilized to procure such purchases, he involved provision of section 69C of the Act and treated Rs.89,44,85,674/- as unexplained expenditure u/s 69C of the Act at page 25 of assessment order. However, the same was not added in the computation of taxable income in the assessment order. Similarly, the AO has not added Rs.15,01,024/-, which was considered as unexplained cash credit u/s 68 of the Act at page 27 of the assessment order. The AO has, however, made various additions and determined total income at Rs.82.61,988/- as against returned income of Rs.24,35,980/-.
4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The CIT(A) issued 8 notices of hearing u/s 250 of the Act as per the details at para 7.1 of the appellate order. In response to the last notice u/s 250 dated 17.12.2025 the assessee submitted as follows “Appeal filed, waiting for any additional documents requirement or conclusion of Appeal.” After considering the submission of the appellant, the CIT(A) dismissed the grounds pertaining to various additions because the assessee failed to discharge the onus u/ss 68, 69, 69A and 69C of the Act. In the result, the CIT(A) dismissed the appeal filed by the appellant.
5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The Ld. AR of the appellant has filed a paper book containing 208 pages and submitted that the assessee has made various submission and filed relevant documentary evidences, which were not appreciated by the AO. Before the CIT(A), the assessee made various compliances, but without appreciating the submission and documentary evidences of the assessee, the CIT(A) dismissed the appeal without pointing out any defects in the submission. The Ld. AR has enclosed copy of various details and the submission of the assessee before the lower authorities. He has also relied on various decisions in support of the grounds raised by the assessee. The Ld. AR submitted that the appellate order u/s 250 of the Act is a non-speaking order without any reasons or justification for dismissing the appeal. He therefore, requested that the order of CIT(A) may be set aside and remanded for fresh adjudication.
6. On the other hand, the Ld. Sr. DR supported the order of CIT(A). He further submitted that the AO has not added Rs.89,44,85,674/- u/s 69C and Rs.15,01,024/- u/s 68 of the Act, though he had arrived at the logical conclusion in the assessment order. He submitted that if the request of assessee for set aside is considered, the order may be set aside with cost.
7. We have heard both sides and perused the materials on record. We have also gone through the orders of lower authorities and find that there are various discrepancies in the orders passed by them. As argued by the Ld. Sr. DR, the AO has discussed about the unexplained purchase of Rs.89,44,85,674/- in the assessment order at page 25 but the same was not added to the total income. Similarly, there is no addition of Rs.15,01,024/- considered as unexplained cash credit u/s 68 of the Act, to the total income. We also find that the CIT(A) has not passed a reasoned and speaking order u/s 250 of the Act. Without a speaking order, the affected parties are prejudiced because they cannot identify specific grounds for an appeal. It is well settled that the order should speak for itself, by transforming subjective rulings into objective, transparent determination of the issues involved in the appeal. From perusal of the appellate order u/s 250 of the Act, we find that the same suffer from the vices of a non-speaking and unreasoned order. Therefore, without delving further into the matter, we deem it proper to set aside the order of CIT(A) and restore it to his file for fresh adjudication subject to payment of cost of Rs.10,000/- (Rupees Ten Thousand Only) to the credit of the Prime Minister’s National Relief Fund within 30 days from receipt of this order. Subject to such payment, the CIT(A) shall decide the matter on merits in accordance with law after granting adequate and reasonable opportunity of being heard of the assessee. The ground is allowed for statistical purpose.
8. Since we have set aside the order of CIT(A) and remanded it to his file for fresh adjudication, the other grounds become academic in nature and do not require adjudication.
9. In the result, the appeal of the assessee is allowed for statistical purpose.
Order is pronounced on 08.06.2026.
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