Nimit Agrawal Vs DCIT (ITAT Raipur)
CIT(A) Must Decide Cross-Examination Ground Before Merits:
The Income Tax Appellate Tribunal (ITAT), Raipur Bench, set aside two orders of the Commissioner of Income Tax (Appeals) after finding that the assessee’s objection regarding denial of cross-examination had remained unadjudicated. The Tribunal held that this ground went to the root of the matter and required a decision by the first appellate authority before consideration of the merits.
The dispute concerned an addition of ₹1,00,000 in each assessment year. Without deciding whether the additions were sustainable, the Tribunal restored both matters to the CIT(A) for adjudication of the cross-examination ground through a speaking order complying with the principles of natural justice.
Background of the Appeals
The assessee, Nimit Agrawal, filed appeals against the respective orders passed by CIT(A), Raipur-3, dated 10.08.2026, for assessment years 2018-19 and 2020-21.
In both appeals, the assessee challenged the confirmation of an addition of ₹1,00,000. A principal objection was that the Assessing Officer had relied upon a third-party statement recorded under Section 131 of the Income Tax Act, 1961, while denying the assessee an opportunity to cross-examine the party concerned.
According to the assessee’s grounds, the statement constituted the sole foundation of the additions. The assessee therefore contended that the denial of cross-examination violated the principles of natural justice and rendered the assessment and appellate orders void ab initio.
These assertions formed part of the assessee’s challenge. The Tribunal did not finally accept the contention that the assessments were void.
Cross-Examination Objections Raised by the Assessee
For assessment year 2018-19, Ground No. 2 before the Tribunal alleged that the CIT(A) had upheld the addition without addressing the Assessing Officer’s repeated denial of cross-examination.
The Tribunal also examined the grounds submitted before the CIT(A) in Form 35. Ground No. 4 specifically complained that the Assessing Officer had failed to provide an opportunity to cross-examine the party whose mobile WhatsApp message contained the words “Bhaiya 1 aaya h”.
For assessment year 2020-21, Ground No. 3 before the Tribunal raised a similar objection regarding reliance on a statement recorded under Section 131 without permitting cross-examination.
The corresponding ground before the CIT(A) referred to a WhatsApp message containing the words “give this guy the 1kg”. Here too, the assessee alleged that the absence of cross-examination breached the principles of natural justice.
Thus, the objection had been expressly raised before the first appellate authority in both years.
Adjournment Request Rejected
When the appeals were called for hearing, nobody appeared for the assessee. A petition stated that counsel was occupied with complying with statutory requirements concerning the filing of tax audit reports.
The Tribunal noted that the matters had been taken up earlier and that counsel had appeared on that occasion. Referring to the Supreme Court’s decision in Ishwarlal Mali Rathod Vs. Gopal and Ors., in SLP (Civil) Nos. 14117-14118 of 2021, dated 20.09.2021, it declined to grant a further adjournment.
The Tribunal proceeded after perusing the documents and recording the submissions of the Revenue’s representative.
Tribunal’s Findings on the Unadjudicated Ground
On examining the CIT(A)’s orders, the Tribunal found that the ground concerning denial of an opportunity for cross-examination had not been adjudicated.
The Tribunal focused on this omission rather than deciding the evidentiary value of the statements or WhatsApp messages. It observed that the assessee had raised the objection before the CIT(A), but the appellate orders contained no adjudication of that ground.
Since the issue went to the root of the dispute, the Tribunal held that the CIT(A) must decide it first. It therefore refrained from entering into the merits of the additions.
Directions Issued to CIT(A)
The Tribunal set aside the CIT(A)’s orders for both assessment years and remanded the matters to the appellate authority.
The CIT(A) was directed to adjudicate the assessee’s ground regarding the opportunity for cross-examination and pass a speaking order in terms of Sections 250(4) and 250(6) of the Income Tax Act, 1961.
The Tribunal further directed compliance with the principles of natural justice. The remand therefore requires the CIT(A) to address the objection expressly and provide a reasoned decision on it.
Outcome and Scope of Relief
Both appeals were allowed for statistical purposes.
The decision grants the assessee a fresh adjudication of an objection that the CIT(A) had left undecided. It does not delete the ₹1,00,000 additions, declare the assessments void, or finally determine whether the material relied upon by the Assessing Officer justified the additions.
The ruling highlights the importance of deciding a specifically raised cross-examination ground where it bears upon the foundation of the assessment. In this case, the omission required the appellate orders to be set aside and the issue restored for a reasoned determination.
Cases Discussed
- Ishwarlal Mali Rathod Vs. Gopal and Ors. — SLP (Civil) Nos. 14117–14118/2021, Supreme Court, 20.09.2021; cited on adjournments.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals), Raipur-3, dated 10.08.2026 for the assessment years 2018-19 & 2020-21 as per the grounds of appeal on record.
2. These matters had already been taken up for hearing earlier also and during that time, the Ld. Counsel for the assessee appeared. However, today when the matter was called for hearing none appeared and petition has been filed stating that the said Counsel is busy with complying statutory requirements for filing tax audit reports. However, in terms with the decision of the Hon’ble Supreme Court in the case of Ishwarlal Mali Rathod Vs. Gopal and Ors., passed in Special Leave Petition (Civil) Nos. 14117-14118 of 2021, order dated 20.09.2021, there is no case made out for granting any further adjournment in the case of the assessee. Materials/documents are carefully perused, submissions of the Ld. Sr. DR are recorded and the matter is heard on merits.
3. At the very outset, it is noted in the grounds of appeal that the Ld. CIT(Appeals) had overlooked the A.O had violated principles of natural justice. The said ground emanates in Ground of appeal No.2 in ITA No.621/RPR/2026, A.Y 2018-19, which reads as follows:
“2. That the Ld. CIT(Appeals) severely erred in law and on facts in upholding the impugned addition of Rs.1,00,000/- while completely ignoring the violation of principles of natural justice by the Ld. Assessing Officer, who repeatedly denied the Appellant the statutory right to cross-examine the party whose statement recorded u/s.131 of the Income Tax Act, 1961 was used as the sole foundation against the Appellant. Therefore, the assessment order of Ld. Assessing Officer and the appellate order of Ld. CIT(Appeals), both are void ab initio.”
Similarly in Form 35, the assessee has assailed in Ground No.4 that the A.O had failed to provide any chance of cross examination to the assessee. The said ground is extracted as follows:
“4. That the Ld. AO utterly failed to provide the chance of cross examination of party whose mobile Whatsapp Message contains-“Bhaiya 1 aaya h”, which is against the principles of natural justice.”
4. Similarly, I find that as per Ground of appeal No.3 in ITA No.622/RPR/2026, A.Y.2020-21, the assessee contends that the First Appellate Authority had overlooked violation of the principles of natural justice by the A.O and the said ground is extracted as follows:
“3. That the Ld. CIT(Appeals) severely erred in law and on facts in upholding the impugned addition of Rs.1,00,000/- while completely ignoring the violation of principles of natural justice by the Ld. Assessing Officer, who repeatedly denied the Appellant the statutory right to cross-examine the party whose statement recorded u/s.131 of the Income Tax Act, 1961 was used as the sole foundation against the Appellant. Therefore, the assessment order of Ld. Assessing Officer and the appellate order of Ld. CIT(Appeals), both are void-ab-initio.”
That also in Form 35, as per Grounds of appeal before Ld. CIT(Appeals), the assessee had assailed in Ground No.4 as follows:
“4. That, the Ld. AO also utterly failed to provide a chance of cross examination of party whose mobile Whatsapp Message contains-“give this guy the 1kg”, which is against the principles of natural justice.”
5. Now before this Bench, it has been assailed that principles of natural justice has not been followed by the A.O and at the same time, I find that there is no adjudication regarding this ground that cross examination should have been provided by the A.O and that the said ground assailed before the First Appellate Authority has not been adjudicated at all in the entire order of the Ld. CIT(Appeals). Therefore, without going into the merits of the matter, on this very aspect that ground assailed by the assessee that opportunity of cross examination was not provided to the assessee by the A.O and the said ground was left un-adjudicated by the First Appellate Authority, hence, for both these years, the orders of the Ld. CIT(Appeals) are set aside and the matters are remanded back to his file for adjudication of the said ground assailed by the assessee regarding opportunity of cross examination. Since this ground goes to the root of the matter, it has to be decided by the First Appellate Authority, first. The Ld. CIT(Appeals) shall pass a speaking order in terms with Section 250 (4) & (6) of the Act complying with the principles of natural justice.
6. In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in open court on 21st day of October, 2026.
