Taxpayer ignored 4 income-tax notices and faced ₹1.55 crore additions: What Delhi ITAT ruled and why it matters
A taxpayer who failed to respond to multiple income-tax notices was facing additions of nearly ₹1.55 crore to her income. In Jusbinder Kour vs ITO, ITA No. 4452/Del/2026, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has now ruled that the appellate authority cannot simply dismiss her appeal without examining the issues on merits and giving reasons.
Kour had filed her income-tax return on 4 January 2021, declaring total income of ₹10.41 lakh, comprising salary income. The tax department subsequently received information about ₹21.90 lakh in cash deposits and the purchase of an immovable property for ₹74 lakh. The assessing officer (AO) sought an explanation, but Kour did not respond.
The AO then initiated reassessment proceedings and issued notices under sections 148, 142(1) and 144 of the Income-tax Act, along with show-cause notices. The taxpayer did not respond to these either. The AO subsequently sought information directly from Punjab and Sind Bank and Union Bank of India under section 133(6).
Tax department made ₹1.55 crore additions
Information received from the banks showed cash deposits and other credits totalling ₹80.94 lakh, excluding a ₹34 lakh loan received by Kour. Since she had not explained the nature and source of the deposits, the AO treated ₹80.94 lakh as unexplained money under section 69A and added it to her income.
The AO also made a separate ₹74 lakh addition under section 69 for the property purchase because Kour had not explained the source of the investment.
Together, the two additions amounted to ₹1.549 crore.
Kour challenged the assessment before the Commissioner of Income Tax (Appeals), or CIT(A). However, the CIT(A) issued four notices, and she did not respond to any of them. The CIT(A) therefore dismissed the appeal and confirmed the assessment order.
ITAT says appeal cannot be dismissed without examining the issues
Kour then approached the ITAT. Her counsel argued that the CIT(A) had passed an ex-parte order without deciding the disputed issues on merits.
Before the tribunal, Kour’s counsel produced bank statements and argued that the ₹34 lakh bank loan should be excluded. The counsel also submitted that Kour had taken a home loan for the property and had received amounts from relatives towards its purchase. These claims, the counsel said, could be verified by the tax authorities. The counsel also cited Kour’s health conditions as a reason for her earlier non-compliance.
The Delhi ITAT agreed that the CIT(A)’s order could not stand.
The tribunal noted that the CIT(A) had dismissed the appeal ex parte without deciding the issues on merits and described the order as a “non speaking cryptic order”. It said section 250(6) requires the CIT(A) to pass a reasoned order stating the points for determination, the decision on those points and the reasons for the decision.
The tribunal also noted that the CIT(A) had not made an inquiry or called for the assessment records, even though Kour claimed that a home loan and amounts from relatives were used to fund the property purchase.
Taxpayer gets another opportunity, but no clean chit
The ITAT set aside the CIT(A)’s order and sent the case back for fresh adjudication after giving both sides an opportunity to be heard.
However, the ruling does not mean that the ₹1.55 crore additions have been deleted. The tribunal specifically clarified that it had not commented on the merits of the disputed additions.
In fact, the ITAT also made it clear that Kour was herself responsible for not complying with the notices issued by the CIT(A). It directed her to comply with notices during the fresh proceedings. If she again fails to respond, the CIT(A) can decide the appeal ex parte on merits, while complying with the requirement to pass a reasoned order.
The ruling therefore provides another opportunity to the taxpayer to explain the disputed deposits and property investment, but it does not provide relief from the tax additions at this stage.
