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Facts
The assessee's appeal against an assessment order was dismissed by the CIT(A) for failing to file submissions and rectify defects. The assessee claimed the original reassessment was bad in law and illegal, and that the CIT(A) erred in dismissing their appeal without considering the merits.
Held
The Tribunal set aside the CIT(A)'s order, remanding the appeal for fresh adjudication. The assessee was granted an opportunity to present their case, file necessary documents, and rectify any defects. The CIT(A) was directed to decide the appeal afresh after providing a reasonable opportunity of being heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without adjudicating on merits, and if the reassessment proceedings were validly initiated under Section 147.
Sections Cited
147, 144, 144B, 69A, 68, 148
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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
order : 17.10.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 20/12/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had dismissed the appeal against the Assessment Order, dated 10/05/2023, passed under Section 147 read with Section 144 read with Section 144B of the Income Tax Act, 1961 for the Assessment Year 2013-2014.
2. The Assessee has raised following grounds of appeal : “1. THE ORDER IS BAD IN LAW, ILLEGAL AND WITHOUT JURISDICTION Assessment Year 2013-2014 1.1. In the facts and the circumstances of the case, and in law, the appellate order framed by the Commissioner of Income tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, ['Ld. CIT (A)'] is bad in law, illegal and without jurisdiction, as the same is framed in breach of the statutory provisions of the Income tax Act, 1961 ('the Act') and as otherwise also is not in accordance with the law. 1.2. Otherwise also, in the facts and the circumstances of the case, and in law, the appellate order so framed by the Ld. CIT (A) is bad in law, illegal and void as the same is arbitrary and perverse.
2. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE 2.1. The Ld. CIT (A) erred in not granting proper, sufficient and adequate opportunity of being heard to the Appellant while framing the appellate order. 2.2. It is submitted that, in the facts and the circumstances of the case, and in law, the appellate order so framed be held as bad and illegal, as: (i) The same is framed in breach of the principles of natural justice; and (ii) The same is passed without application of mind to the facts. WITHOUT PREJUDICE TO THE ABOVE
3. DISMISSAL AS DEFECTIVE NON-MAINTAINABLE APPEAL 3.1. The Ld. CIT (A) erred in treating the appeal as defective and, thereafter, dismissing it as non maintainable. 3.2. It is submitted that in the facts and the circumstances of the case and in law, no such action was called for. WITHOUT PREJUDICE TO THE ABOVE
4. REASSESSMENT 4.1. The Ld. CIT(A) erred in confirming action of the A.O. in initiating the reassessment proceeding and framing the assessment of the Appellant by invoking the provisions of section 147 r.w.s 144 r.w.s. 144B of the Act. 4.2. While doing so, the Ld. CIT(A) failed to appreciate that:
2 Assessment Year 2013-2014 (i) The case of the appellant did not fall within the parameters laid down by section 147 r.w.s. 148 of the Act; (ii) The necessary preconditions for initiating and completion thereof were not satisfied. 4.3. It is submitted that in the facts and the circumstances of the case, and in law, the reassessment framed is bad, illegal and void. WITHOUT PREJUDICE TO THE ABOVE 5. ADDITION OF THE AMOUNT OF RS. 85,75,000/- AS ALLEGED ACCOMODATION ENTRIES U/S. 69A OF THE ACT 5.1 The Ld. CIT(A) erred in confirming action of the A.O. in making the addition of the amount of Rs. 85,75,000/- u/s 69A of the Act, by treating the unsecured loan obtained by the Appellant from Marine Gems Pvt. Ltd. as an alleged unexplained non- genuine transaction 5.2. While doing so, the Id. CIT(A) erred in -- (i) Basing his action only on surmises, suspicion and conjecture; (ii) Taking into account irrelevant and extraneous considerations, and (iii) Ignoring relevant material and considerations as submitted by the Appellant. 5.3. It is submitted that in the facts and the circumstances of the case, and in law, no such addition u/s. 69A of the Act was called for. 5.4. Without prejudice to the above, assuming but not admitting that some addition was called for, the Ld. CIT (A) failed to appreciate that the computation of the addition made by the A.O, is not in accordance with the law, is arbitrary, and excessive. WITHOUT PREJUDICE TO THE ABOVE 6. ALLEGED UNEXPLAINED CASH DEPOSIT [Rs. 1,23,50,700/-] 6.1. The Ld. CIT(A) erred in confirming action of the A.O. in making addition of the amount of Rs. 1,23,50,700/-u/s. 68 of the Act, by treating the deposits in bank accounts of the Appellant as alleged unexplained cash credit. 6.2. While doing so, the Ld. CIT(A) erred in - 3 Assessment Year 2013-2014 (i) Basing his action only on surmises, suspicion and conjecture; (ii) Taking into account irrelevant and extraneous considerations; and (iii) Ignoring relevant material and considerations as submitted by the Appellant. 6.3. It is submitted that in the facts and the circumstances of the case, and in law, no such addition u/s 68 of the Act was called for. 6.4 Without prejudice to the above, assuming but not admitting that some addition was called for, the Ld. CIT (A) failed to appreciate that the computation of the addition made by the A.O, is not in accordance with the law, is arbitrary, and excessive.”
The relevant facts in brief are that the assessment for the Assessment Year 2013-2014 was framed on the Assessee, a resident-individual. Vide order dated 10/05/2023 passed under Section 147 read with Section 144 read with Section 144B, the Assessing Officer made an addition of INR.85,75,000/- and INR.1,23,50,700/- in the hands of the Assessee under Section 69A and 68 of the Act, respectively.
Being aggrieved, the Assessee preferred appeal before the Ld. CIT(A) which was dismissed vide order, dated 20/12/2024. Since the Assessee had failed to file submissions/documents/evidence or any other supporting material in response to the notice issued by the Ld. CIT(A). The Ld. CIT(A) concluded that the Assessee was neither interested in prosecuting the appeal nor did the Assessee took steps to remove the defects in the appeal preferred before the Ld. CIT(A) by filing statement of facts.
Being aggrieved by the above dismissal order passed by the Ld. CIT(A), the Assessee has preferred the present appeal before the Tribunal on the grounds reproduced at Paragraph 2 above.
We have heard both the sides and have perused the material on 4 Assessment Year 2013-2014 record.
It is admitted position that the Ld. CIT(A) had dismissed the appeal preferred by the Assessee on the ground that the Assessee had failed to produce all record, statement of facts and supporting documents/submissions. The Learned Authorized Representative for the Assessee appearing before us submitted that the grounds raised by the Assessee before the Ld. CIT(A) were not decided on merits. It was submitted that Assessee had now able to gather all the relevant documents and details to support the grounds raised by the Assessee on merits before the Ld. CIT(A). It was submitted that the Assessee undertakes to prosecute the appeal diligently and remove the defects in appeal before Ld. CIT(A) in case an opportunity is granted to the Assessee.
Given the facts and circumstances of the present case, we deem it appropriate and in the interest of justice to set aside the Order, dated 20/12/2024, passed by the Ld. CIT(A) with the directions to adjudicate the appeal afresh after granting the Assessee a reasonable opportunity of being heard. The Assessee is also directed to file statement of facts and remove any further defects in appeal filed before the Ld. CIT(A) forthwith. Further, the Assessee is also directed co-operate in the appellate proceedings and file details, documents & submission in support of its claims/contentions before the CIT(A). It is clarified that the Assessee shall be granted reasonable opportunity of being heard. The Assessee is directed to be vigilant and track the appellate proceedings through Income Tax Business Application Portal. In case the Assessee fails to enter appearance and/or fails to file details/documents/submission in response to notice of hearing issued by the CIT(A), the CIT(A) shall be at liberty to decide the issues on merits on the basis of material on record.
Before parting we would like to observe that during the course of 5 Assessment Year 2013-2014 hearing it was submitted on behalf of the Assessee that the reassessment proceedings were barred by limitation and bad in law in view of the judgment of the Hon’ble Supreme Court in the judgment of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC)[03/10/2024]. Since we have remanded the issue back to the file of Ld. CIT(A), the Assessee granted an opportunity to raise the said contention before the Ld. CIT(A).
In terms of the 8 & 9 above, Ground No. 3 raised by the Assessee is allowed for statistical purposes while all the other grounds raised by the Assessee are dismissed being rendered infructuous.
In terms of above, the present appeal is partly allowed.