CHETAN PATNI,JAIPUR vs. INCOME TAX OFFICER, INCOME TAX DEPARTMENT JAIPUR

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ITA 1793/JPR/2025Status: DisposedITAT Jaipur07 August 2026AY 2015-164 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and restored the matter for a fresh decision on merits. The assessee was directed to cooperate and avoid unnecessary adjournments in the fresh proceedings before the CIT(A).

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-prosecution. The AO made an addition under Section 68 for loans, which was challenged. The ITAT had previously set aside the assessment order for a de novo assessment.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal for non-prosecution, and whether the assessee had discharged the onus under Section 68 with the evidence now available.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 250,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Shri T.R. Senthil Kumar & Shri Prakash

IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, JAIPUR (PHYSICAL HEARING) Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Prakash, Accountant Member ITA No: 1793/JPR/2025 Assessment Year: 2015-16

Chetan Patni Income Tax Officer, C-36, Patni House Ram Ward 6(1), Jaipur Gali No. 6 Raja Park, Vs (Respondent) Arjun Lal Sethi Nagar, S.O. Jaipur PAN: ADJPP5110C (Appellant) Assessee Represented: Sh. S. K. Gogra, CA Revenue Represented: Ms. Aarti Rawat, Addl. CIT Date of hearing : 03-08-2026 Date of pronouncement : 07-08-2026 आदेश/ORDER PER : PRAKASH, ACCOUNTANT MEMBER:-

1.

This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals) (hereinafter referred to as “the CIT(A)”) dated 01.09.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for the Assessment Year 2015-16. The CIT(A) has dismissed the assessee’s appeal for non- prosecution. The appeal before the CIT(A) arose out of the assessment order dated 27.02.2025 passed by the Assessing Officer (hereinafter referred to as "the AO") under section 143(3) read with section 254 of the Act.

I.T.A No. 1793/JPR/2025 Page No 2 Chetan Patni

2.

There is a delay of 4 days in filing this appeal before us. In this regard, the assessee has submitted a condonation application and an affidavit explaining the reasons for the delay. Delay is condoned as we are of the view that there was a sufficient cause. 3. Facts of the case in brief are that the assessee is an individual and was in the business of trading building materials and also civil construction. The assessee had taken loans from various parties through cheques or banking channels in the assessment year. The AO had made an addition of Rs. 2,09,37,612 under section 68 of the Act which was challenged before learned CIT(A) and thereafter, before the Hon’ble Jaipur benches of the Income Tax Appellate Tribunal (hereinafter referred to as the ‘ITAT’) vide its ITA No. 298/JPR/2023. The Hon’ble ITAT passed its order dated 09.08.2023 setting aside the assessment order and directing the AO to frame a fresh assessment de novo after considering all the evidence placed on record by the assessee, and if deemed fit, to take recourse to the provisions of section 133(6) of the Act so as to render justice to the assessee. 4. In the fresh assessment order, the AO sustained an addition of Rs. 64,00,000 under section 68 of the Act on the ground that the assessee failed to discharge the onus cast upon him under that provision. The AO further recorded that he issued notices under section 133(6) of the Act to those lenders who had advanced loans exceeding Rs. 5,00,000, of whom only a few responded, and only some furnished the complete trail of the transactions. The AO held that the assessee has not proven the genuineness and creditworthiness in respect of the 11 lenders listed in the assessment order dated 27.02.2026, the borrowings from whom aggregate to Rs. 64,00,000. 5. From a Paper Book with 92 pages filed before us, we find that the assessee has placed on record documents obtained from the lenders including confirmation of accounts, income-tax returns, affidavits of the

I.T.A No. 1793/JPR/2025 Page No 3 Chetan Patni

lenders and their bank statements. We also note that the Assessee has filed the confirmation letter from Aditya Financial Services, at pages 88 and 89 of the Paper Book, confirming that it had arranged the loans to the Assessee from the parties listed therein. Further, the assessee has filed an affidavit affirming that all the loans were taken through account payee cheques or banking channels and were borrowed for the purpose of his business. 6. The learned Authorised Representative (hereinafter referred to as the ‘AR’) of the assessee took us through the documents and the principles laid down by the higher courts on the discharge of onus under section 68. He also submitted that a majority of the loans had been repaid in the same financial year or immediately following years. He further submitted that the assessee, being a borrower in default, was not in a position to compel the lenders to respond to the notices issued by the Assessing Officer or to furnish their income-tax returns. 7. The learned Departmental Representative (hereinafter referred to as the ‘DR’) supported the order of the AO and relied upon the reasons recorded therein. 8. We have heard the rival submissions and perused the material available on record. It is not in dispute that the learned CIT(A) disposed of the appeal ex parte, for non-prosecution. We further find that the additions sustained by the AO turn on the sufficiency of the confirmations, affidavits, income-tax returns and bank statements now placed before us, which the learned CIT(A) has had no occasion to examine. 9. Keeping in view the totality of the facts and circumstances, and in the interest of substantial justice, we deem it appropriate to set aside the impugned order and restore the matter to the file of the CIT(A) with a direction to decide the appeal afresh on merits, in accordance with law, after affording a reasonable opportunity of being heard to the assessee. At the same time, we make it clear that:

I.T.A No. 1793/JPR/2025 Page No 4 Chetan Patni

a) the assessee shall remain vigilant regarding the proceedings, shall cooperate and make timely representations before the CIT(A) without seeking unnecessary adjournments; b) in the event of any further default by the assessee, the CIT(A) shall be at liberty to decide the appeal in accordance with law on the basis of the material available on record; and c) we have not expressed any opinion on the merits of the addition, and all contentions of both the sides on merits are left open. 10. In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 07-08-2026

Sd/- Sd/- (T.R. SENTHIL KUMAR) (PRAKASH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 07/08/2026 *Ganesh Kr., Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण

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