ITAT Sets Aside CIT(A) Order for Breach of Principles of Natural Justice; Remands Case for Fresh Adjudication

The ITAT Mumbai sets aside the CIT(A)’s order against the HUF assessee, citing a violation of natural justice due to a lack of proper hearing. The matter was remanded for fresh adjudication with directions to pass a justified and reasoned order.

The present writ petition has been filed by Vikas Vaishnav HUF against the Income Tax Officer (ITO) in the ITAT Mumbai, challenging an order dated September 12, 2025, passed by the CIT(A) under section 250 of the Income Tax Act, 1961. The case belongs to the Assessment Year 2023-24. The impugned order had sustained an addition made to the assessee on the grounds of unexplained expenditure

The case originated when the return filed by the assessee for the FY 2023-24 was selected for scrutiny by CASS to verify the genuineness of the creditor liabilities and purchase. During the assessment of the return, the Assessing Officer (AO) noticed a difference of Rs. 36.35 crore between purchases recorded in the books and those reflected in GSTR-2A. The AO made an addition of the same to the assessee’s income on the grounds of unexplained expenditure under Section 69C, read with Section 115BBE. Further, a sum amounting to Rs. 110.47 crore relating to sundry creditors, mainly linked to Feriha Exim Pvt. Ltd., was treated as unexplained cash credit under Section 68.

The aggrieved assessee filed an appeal before the ITAT Mumbai, arguing that they were not given a proper opportunity for a hearing during the appellate proceedings. The tribunal considered it a clear violation of the principles of natural justice and hence quashed the impugned CIT(A)’s order. The case has been sent back to the CIT(A) for fresh consideration with directions to pass a reasoned judgment. The appeal was allowed for statistical purposes.