Nitesh Rastogi HUF Vs ITO (ITAT Lucknow)
Omaxe On-Money Addition Based on Third-Party Excel Sheet Requires Examination: ITAT Orders Fresh Assessment
Summary: The Income Tax Appellate Tribunal, Lucknow Bench, has restored an assessment involving additions of ₹19,99,900 towards alleged on-money and ₹19,26,600 towards unexplained investment to the Assessing Officer for fresh adjudication. The Tribunal held that the assessee’s objections concerning third-party Excel entries, non-supply of statements and denial of cross-examination required proper examination.
Vice President Kul Bharat also condoned a delay of 46 days in filing the appeal after considering the explanation that appellate notices and the order had been communicated to the email address of the assessee’s previous counsel. The appeal was allowed for statistical purposes, with the substantive disputes left for fresh assessment.
Background of the case
The assessee, Nitesh Rastogi HUF, filed its return of income on 31 December 2020, declaring total income of ₹4,63,340 for assessment year 2020-21.
The assessment was subsequently reopened through a notice under Section 148 dated 26 March 2024, issued by the Income Tax Officer, Ward-2(1), Lucknow. The reassessment order was passed on 28 March 2025 by the Income Tax Officer, Ward-6(2), Lucknow.
The Assessing Officer added ₹19,99,900 under Section 69, treating it as unexplained investment representing on-money allegedly paid to Omaxe Group for purchasing property.
A further addition of ₹19,26,600 was made towards unexplained investment in Commercial Unit No. MCCL/Block-1/17 in the Metro City Commercial-2 project, purchased from Omaxe Gary Buildtech Pvt. Ltd.
The CIT(A), National Faceless Appeal Centre, sustained the assessment through an ex parte order dated 3 November 2025. The assessee challenged that decision before the Tribunal.
Delay attributed to communication to previous counsel
Seeking condonation of delay, the assessee submitted that notices and the appellate order were sent to the email address of its previous counsel, although a different email address had been furnished in Form No. 35.
The assessee explained that it remained unaware of the appellate proceedings and the order, resulting in delayed filing of the Tribunal appeal. A petition and supporting affidavit were submitted.
The Revenue opposed condonation, arguing that the appeal should have been filed within the prescribed period. However, following the Supreme Court’s judgment in Collector of Land Acquisition v. Mst. Katiji & Others, 167 ITR 471, the Tribunal condoned the delay and admitted the appeal.
Challenge to reassessment jurisdiction
The assessee questioned the jurisdiction of the officer who issued the reopening notice. It argued that the notice was issued by ITO, Ward-2(1), whereas the assessment was completed by ITO, Ward-6(2), without an order transferring jurisdiction under Section 127.
A separate challenge concerned the validity of the notice under Section 151A and the scheme notified by the CBDT.
The Tribunal recorded these legal objections as part of the matters requiring consideration. It did not finally hold the reassessment proceedings invalid on either ground.
Objections to third-party Excel entries
On merits, the assessee denied paying any on-money to Omaxe Group. It contended that the addition rested on entries in an Excel sheet recovered from a third party, without independent evidence establishing an actual cash payment.
In its grounds, the assessee specifically disputed the conversion of entries aggregating to ₹19,999 into ₹19,99,900 by applying a multiplier of 100. It maintained that this interpretation was unsupported by corroborative evidence.
The assessee also complained that the complete statements relied upon were not supplied and that no opportunity to cross-examine the alleged witnesses was provided. It argued that no receipt, acknowledgement or other documentary evidence established payment of the alleged on-money.
Regarding the separate commercial-unit addition, the assessee submitted that it had lacked an effective opportunity to explain the nature and source of the investment.
Revenue’s stand and Tribunal’s findings
The Revenue supported the additions, submitting that adequate opportunities had been provided during assessment and appeal proceedings. It maintained that the additions were based on Investigation Wing material and that the transactions had not been satisfactorily explained.
The Tribunal noted that the first appellate order had been passed without effective representation from the assessee. It found that the objections to the interpretation of Excel entries, non-supply of statements and denial of cross-examination required proper examination against the material on record.
The separate addition of ₹19,26,600 also required consideration after examining the assessee’s explanation and supporting evidence.
Fresh assessment directed
To advance natural justice and fairness to both parties, the Tribunal set aside the impugned appellate order and restored the assessment to the Assessing Officer.
The AO was directed to consider the assessee’s submissions and evidence, verify the claims and frame the assessment afresh. The assessee was directed not to seek adjournment without reasonable cause.
The ruling provides a fresh opportunity to contest the jurisdictional and factual issues. Neither addition was finally deleted on merits, and their sustainability remains open for examination in the fresh proceedings.
Cases Discussed
- Collector, Land Acquisition, Anantnag Vs Mst. Katiji & Ors. (Supreme Court); (1987) 167 ITR 471; 19/02/1987: Followed by the Tribunal while condoning the 46-day delay in filing the appeal. The Supreme Court decision supports a practical and justice-oriented approach to determining sufficient cause for condonation.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 03.11.2025 pertaining to the assessment year 2020-21. The assessee has raised the following grounds of appeal: –
“1. That the notice u/s 148 dated 26-03-2024 has been issued by ITO – 2(1), Lko who does not possess jurisdiction over the Assessee and assessment Order dated 28.03.2025 has been passed by ITO 6(2), Lko and thus the person issuing the notice u/s 148 and person passing the assessment order are different and no order u/s 127 has been passed transferring the jurisdiction from ITO 2(1) to ITO 6(2) and thus the notice u/s 148 and subsequent order are void ab-intio without jurisdiction and liable to be quashed.
(2) That the Ld. CIT(A), NFAC erred on facts and in law in passing ex-partee order without appreciating that there was a reasonable cause for non-compliance.
(3) That the Ld. CIT(A), NFAC erred on facts in not considering that the notice was issued on email id which belong to the previous counsel and the Assessee was not aware of the service of the notices.
(4) That Notice u/s 148 of IT Act dated 26.03.2024 has been issued by ITO-2(1), Lucknow, who have no Jurisdiction to issue the same in view of CBDT Circular Notification dated 29.03.2022 read with section 151A & 144B wherein it has been specifically enumerated that the NFAC has exclusive power to issue the Notice u/s 148 of I. T. Act, 1961, hence the present assessment is invalid as per law.
(5) That the Ld. CIT(A), NFAC Lucknow erred on facts and in law in confirming addition of Rs. 19,99,900/- u/s 69 and not considering that the Assessee has not paid any “On Money” of Rs. 19,99,900/- to Omaxe Group against the Purchase of Property from Omaxe.
(6) That the Ld. A. O. erred on facts and in law in treating the figures found in excel sheet – Main Report of Rs. 13,460/-, 2,775/- and Rs. 1,016/- and Rs. 2,748/-aggregating to Rs. 19,999/- as Rs. 19,99,900/- by multiplying with factor of 100 is solely based on assumptions of Investigation Wing without bringing any corroborative evidences.
(7) That the Authorities below erred on facts and in law in not confronting the complete Statement of any person admitting to have received On Money of Rs. 19,99,900/- from Assessee
(8) That the Authorities below erred on facts and in law in not allowing the cross examination of the alleged witnesses on the basis of which the Ld. A. O. is of the view that the Assessee paid On Money to Omaxe Group.
9) That the Authorities below erred on facts and in law in not considering that employees of Omaxe has nowhere stated in statement that cash/on money of Rs. 19,99,900/- was received from “Assessee”.
(10) That the Authorities below erred on facts and in law in not considering that the addition has been made on the basis of excel sheet extracted from Third Party Computer and not from the possession of the Assessee and thus no presumption u/s 132(4A) or Section 292C can be drawn against the Assessee.
(11) That the Authorities below erred on facts and in law in not considering that the Addition made is based on the data extracted by the Investigation Wing from 3rd. Party Computer and Hard disk which cannot be utilized against the Assessee and are not sufficient to charge any person with Liability unless they are corroborated with any other evidence on record.
(12) That the Authorities below erred on facts and in law in not considering that the entries in Loose papers / sheets are irrelevant and not admissible under section 34 of the Evidence Act.
(13) That the Authorities below erred on facts and in law in not considering that the excel sheet alleged to have been containing the information of cash receipts dose not bear any signature of Assessee.
(14) That no receipts/acknowledgements were found from ‘Omaxe’ for receipt of alleged “on money” of Rs. 19,99,900/- from Assessee.
(15) That the Ld. CIT(A), NFAC Lucknow erred on facts and in law in confirming addition of Rs. 1926600/- as unexplained investment being the amount paid by the Assessee to Omaxe Gary Buildtech Pvt Ltd. against purchase of Commercial Unit No. MCCL/Block-1/17 in project Metro City Commercial-2.
(16) That the addition made is highly excessive contrary to facts, law and principles of natural justice and without having its say on the reasons relied.”
2. The present appeal is barred by limitation for 46 days. The assessee has filed petition seeking condonation of delay in filing the present appeal. The Ld. Counsel for the assessee reiterated the submissions as made in the petition seeking condonation of delay and also the contents of the supporting affidavit. It was submitted that the impugned order of the Ld. CIT(A) dated 03.11.2025 was communicated to an email ID belonging to the previous counsel of the assessee, whereas the assessee had furnished his email ID, i.e., [email protected], in Form No. 35. It was further submitted that since the notices as well as the impugned order were sent to an email ID which did not belong to the assessee, he remained unaware of the passing of the impugned order and, consequently, could not file the appeal within the prescribed period of limitation. It was, therefore, prayed that the delay in filing the appeal may kindly be condoned and the appeal be admitted for adjudication on merits.
3. On the other hand, the Ld. Departmental Representative for the Revenue opposed the submissions and contended that the assessee ought to have filed the appeal within the prescribed time. It was further submitted that the facts of the case do not warrant for taking a liberal view in the matter.
4. Heard the Ld. Representatives of the parties and perused the materials available on records. It was submitted that the impugned order of the Ld. CIT(A) dated 03.11.2025 was communicated to an email ID belonging to the previous counsel of the assessee, whereas the assessee had furnished his email ID, i.e., [email protected], in Form No. 35. It was further submitted that since the notices as well as the impugned order were sent to an email ID which did not belong to the assessee, he remained unaware of the passing of the impugned order. We, therefore, respectfully following the judgment of the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. MST. Katiji & Ors 167 ITR 471 (SC) hereby condone the delay and admit the appeal for hearing on merits.
5. The facts in brief are that in this case, the assessee filed his return of income on 31.12.2020 for the A.Y. 2020-21, declaring total income of Rs.4,63,340/-. Thereafter, the case of the assessee was reopened by issuance of notice u/s 148 of the Income-tax Act, 1961 (“Act”, in short) dated 26.03.2024 by the Income Tax Officer, Ward-2(1), Lucknow. Subsequently, the assessment was framed by the Income Tax Officer, Ward-6(2), Lucknow vide order dated 28.03.2025, wherein the Assessing Officer (“AO”, for short) made an addition of Rs.19,99,900/- u/s 69 of the Act on account of alleged unexplained investment in the form of on-money paid to Omaxe Group towards purchase of property. The AO also made a further addition of Rs.19,26,600/- on account of unexplained investment relating to the purchase of Commercial Unit No. MCCL/Block-1/17 in the project Metro City Commercial-2 from Omaxe Gary Buildtech Pvt. Ltd. Aggrieved against this, the assessee preferred an appeal before the Ld. CIT(A) who sustained the order of the AO. Now, the assessee is in appeal before this Tribunal.
6. Apropos to the grounds of appeal, the Ld. Counsel for the assessee vehemently submitted that the authorities below failed to appreciate the facts of the case in right perspective. He further submitted that the assessee has challenged the validity of the reassessment proceedings on the ground that notice u/s 148 of the Act was issued by the ITO, Ward-2(1), Lucknow, whereas the assessment order was passed by the ITO, Ward-6(2), Lucknow, without there being any order transferring jurisdiction u/s 127 of the Act. Further, he contended that the notice issued u/s 148 of the Act was not in accordance with the provisions of section 151A of the Act and the scheme notified by the CBDT. The Ld. Counsel for the assessee submitted that the addition of Rs.19,99,900/- made u/s 69 of the Act is wholly unjustified, as the assessee had not paid any on-money to Omaxe Group towards the purchase of property. It was submitted that the addition was made merely on the basis of certain entries found in an Excel sheet recovered from a third party, without there being any independent corroborative evidence establishing that the assessee had actually paid the alleged amount. The Ld. Counsel further submitted that neither the complete statements of the persons relied upon by the AO were furnished to the assessee nor was any opportunity of cross-examination afforded. It was also submitted that no receipt, acknowledgement or other documentary evidence was brought on record to establish that the assessee had paid the alleged on-money. It was contended that the addition made on the basis of third-party material, without confronting the same to the assessee and without providing an effective opportunity of rebuttal, is contrary to the principles of natural justice. Regarding the addition of Rs.19,26,600/-, the Ld. Counsel submitted that the authorities below failed to appreciate the facts and material relating to the purchase of the commercial unit from Omaxe Gary Buildtech Pvt. Ltd. It was submitted that the assessee was deprived of an effective opportunity to explain the nature and source of the investment.
7. On the other hand, the Ld. Departmental Representative (“DR”, for short) opposed the submissions made by the Ld. Counsel for the assessee and supported the orders of the authorities below. He further submitted that sufficient opportunities were provided to the assessee during the assessment as well as appellate proceedings. However, the assessee failed to avail of such opportunities. It was further submitted that the AO had made the additions on the basis of material received from the Investigation Wing and the assessee failed to satisfactorily explain the transactions in question. The Ld. DR, therefore, submitted that no interference with the orders of the authorities below is called for. However, the Ld. DR submitted that in case the matter is restored to the file of the AO, the assessee may be directed to cooperate in the assessment proceedings and furnish all necessary details and supporting evidence.
8. I have heard the rival submissions and perused the material available on records. I find that the Ld. CIT(A) has passed the impugned order ex parte, in the absence of any effective representation on behalf of the assessee. The contention of the assessee is that the notices issued by the Ld. CIT(A) were sent to the email ID belonging to the previous counsel of the assessee and, therefore, the assessee remained unaware of the appellate proceedings. It is further contended that the assessee could not place the relevant facts and supporting evidence before the Ld. CIT(A) to substantiate his claim. I find that the assessee has raised various legal as well as factual grounds challenging the validity of the reassessment proceedings and the additions made by the AO. The assessee has specifically challenged the jurisdiction of the officer issuing notice u/s 148 of the Act and has also questioned the validity of the reassessment proceedings in the light of the provisions of section 151A of the Act. Further, on merits, the assessee has disputed the addition of Rs.19,99,900/- made on account of alleged on-money paid to Omaxe Group and the addition of Rs.19,26,600/- made on account of unexplained investment in the purchase of a commercial unit. I find that the addition of Rs.19,99,900/- is stated to have been made on the basis of certain entries found in an Excel sheet recovered from a third party. The assessee has disputed the correctness of the interpretation of such entries and has also raised objections regarding non-supply of the statements relied upon by the AO and denial of opportunity of cross-examination. These objections require proper examination in the light of the material available on record. Similarly, the addition of Rs.19,26,600/- also requires examination after considering the explanation and supporting evidence, if any, furnished by the assessee. Therefore, considering the totality of the facts and the material placed before me, to sub-serve the principle of natural justice and to be fair with both the parties, deem it necessary and expedient under the facts of the present case to set aside the impugned order and restore the assessment to the file of the Assessing Officer. The AO is hereby directed to consider submissions and evidences; as furnished by the assessee in support of its claim and verify the veracity of such claim. The AO would frame the assessment afresh. The assessee is directed not to seek adjournment without any reasonable cause. The grounds raised in the appeal are allowed for statistical purposes.
9. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 28/10/2026.
