KOKAN RURAL DEVELOPMENT CHARITABLE ASSOCIATION,NAVI MUMBAI vs. EXEM. WARD 1(4), MUMBAI, MUMBAI

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ITA 2517/MUM/2026Status: DisposedITAT Mumbai15 June 2026AY 2022-236 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the right of appeal is a valuable statutory right and should be decided on merits. It found merit in the assessee's contention that the appeal was not adjudicated on merits due to procedural defaults.

What were the facts?

The assessee's appeal before the CIT(A) was dismissed due to non-compliance and lack of submissions, leading to confirmation of additions made by the Assessing Officer. The assessee claimed illness of their accountant prevented effective participation.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal on procedural grounds without adjudicating the substantive issues, and whether the assessee was denied a reasonable opportunity of hearing.

Which sections of the Income-tax Act were involved?

Section 69A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “J (SMC

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Appellant: Shri Pradeep Hathi, CA
For Respondent: Shri Aditya Rai, (SR. DR.)
Hearing: 10/06/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J (SMC)” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

ITA No. 2517/MUM/2026 Assessment Year: 2022-23

Kokan Rural Development Commissioner of Income Tax Charitable Association, D 378 (Exem), Ward 1(4), Mumbai, Vs. TTC Industrial Area, Turbhe, Income Tax Appellate Tribunal, MIDC, Navi Mumbai - 400705 Mumbai – 400020, Maharashtra Maharashtra. PAN NO. AAECK 0003 C Appellant Respondent

Assessee by : Shri Pradeep Hathi, CA. Revenue by : Shri Aditya Rai, (SR. DR.)

Date of Hearing : 10/06/2026 : 15/06/2026 Date of pronouncement ORDER PER OM PRAKASH KANT, AM

The present appeal has been preferred by the assessee against the order dated 12.02.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the learned CIT(A)"], for Assessment Year 2022–23, raising various grounds challenging, inter alia, the confirmation of additions made under sections 69A and 69C of the

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Income-tax Act, 1961, as well as alleging denial of adequate tax Act, 1961, as well as alleging denial of adequate tax Act, 1961, as well as alleging denial of adequate opportunity of hearing. opportunity of hearing.

2.

At the threshold, it is noticed that t At the threshold, it is noticed that the learned CIT(A) has he learned CIT(A) has dismissed the appeal substantially on account of non-compliance dismissed the appeal substantially on account of non dismissed the appeal substantially on account of non on the part of the assessee and has proceeded to affirm the on the part of the assessee and has proceeded to affirm the on the part of the assessee and has proceeded to affirm the additions made by the Assessing Officer. The appellate authority additions made by the Assessing Officer. The appellate authority additions made by the Assessing Officer. The appellate authority recorded a finding that despite opportunities recorded a finding that despite opportunities afforded during the afforded during the appellate proceedings, neither any effective compliance was made appellate proceedings, neither any effective compliance was made appellate proceedings, neither any effective compliance was made nor were any submissions filed on behalf of the assessee, and nor were any submissions filed on behalf of the assessee, and nor were any submissions filed on behalf of the assessee, and accordingly upheld the additions made under sections 69A and 69C accordingly upheld the additions made under sections 69A and 69C accordingly upheld the additions made under sections 69A and 69C of the Act. The relevant finding of the Ld. The relevant finding of the Ld. CIT(A) is reproduced as CIT(A) is reproduced as under :

“I have carefully considered the submission/grounds of appeal made by the I have carefully considered the submission/grounds of appeal made by the I have carefully considered the submission/grounds of appeal made by the appellant in appeal memo form (no. 35), as well as gone through the observation appellant in appeal memo form (no. 35), as well as gone through the appellant in appeal memo form (no. 35), as well as gone through the and findings of the AO 's assessment order. and findings of the AO 's assessment order. It is observed from the It is observed from the assessment order that the appellant, was order that the appellant, was provided ample opportunity provided ample opportunity to substantiate his explanation regarding the findings of the AO and after duly considered the non explanation regarding the findings of the AO and after duly considered explanation regarding the findings of the AO and after duly considered submission of the appellant scrutiny assessment has been completed by the A of the appellant scrutiny assessment has been completed by the A of the appellant scrutiny assessment has been completed by the AO computing total income after total income after making addition Rs. 2,36,771/ making addition Rs. 2,36,771/- for unexplained money invoking section 69A of the Act since the invoking section 69A of the Act since the credit entries in the bank credit entries in the bank account maintained with HDFC Bank Ltd. not being satisfactorily explained by the maintained with HDFC Bank Ltd. not being satisfactorily explained by maintained with HDFC Bank Ltd. not being satisfactorily explained by appellant. The appellant, as it is appellant. The appellant, as it is observed, being unable to prove/ establish observed, being unable to prove/ establish genuineness of sale of scrap of Rs. 4,38,252/ genuineness of sale of scrap of Rs. 4,38,252/- as well as genuineness of as well as genuineness of donation of Rs. 1,62,000/ donation of Rs. 1,62,000/- despite availing ample hearing opportunity, in course availing ample hearing opportunity, in course of scrutiny assessment before the AO. of scrutiny assessment before the AO. In the appeal procee In the appeal proceedings the appellant has miserably failed to file any miserably failed to file any compliance; neither the appellant nor her authorised representative has made neither the appellant nor her authorised representative has made neither the appellant nor her authorised representative has made either any written submission either any written submission or filed any adjournment letter/ petition. Therefore or filed any adjournment letter/ petition. Therefore the appellant miserably failed to substanti the appellant miserably failed to substantiate the grounds taken by him with the ate the grounds taken by him with the supporting documents supporting documents. This indicates the appellant is not willing to pursue his This indicates the appellant is not willing to pursue his appeal. In view of above, I do not find any infirmity in the order of the AO and In view of above, I do not find any infirmity in the order of the AO and In view of above, I do not find any infirmity in the order of the AO and resultantly, I have no hesitation in holding that the resultantly, I have no hesitation in holding that the impugned order of the AO ugned order of the AO

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dated 07-03-2024 is 2024 is based on apropos consideration of facts and law and hence based on apropos consideration of facts and law and hence the same does not warrant interference in as much as the appellant being unable same does not warrant interference in as much as the appellant being unable same does not warrant interference in as much as the appellant being unable to discharge onus of to discharge onus of proving the source of credit entries in bank account an proving the source of credit entries in bank account and proving the sale of scrap and donation under consideration being genuine. proving the sale of scrap and donation under consideration proving the sale of scrap and donation under consideration Therefore I am of opinion that AO's decision of Therefore I am of opinion that AO's decision of determining total income aft determining total income after making addition Rs. 2,36,771 making addition Rs. 2,36,771/- for unexplained money invoking section 69A and invoking section 69A and addition of Rs. 6,00,25 Rs. 6,00,252/-[4,38,252/- +1,62,000/-] of the Act ] of the Act are justified and in accordance with law. Accordingly impugned additions stand confirmed. The accordance with law. Accordingly impugned additions stand confirmed. The accordance with law. Accordingly impugned additions stand confirmed. The grounds in this regard are grounds in this regard are dismissed. In the result, the appeal of the appellant is dismissed In the result, the appeal of the appellant is dismissed.”

3.

Before us, the learned Authorised Representative submitted Before us, the learned Authorised Representative submitted Before us, the learned Authorised Representative submitted that the assessee was prevented by sufficient cause from effectively that the assessee was prevented by sufficient cause from effectively that the assessee was prevented by sufficient cause from effectively participating in the appellate proceedings. It was pointed out that participating in the appellate proceedings. It was pointed out that participating in the appellate proceedings. It was pointed out that only two notices had been issued by the learned CIT(A) within a only two notices had been issued by the learned CIT(A) withi only two notices had been issued by the learned CIT(A) withi span of approximately twenty span of approximately twenty-five days, namely on 14.09.2025 and five days, namely on 14.09.2025 and 10.10.2025. It was further submitted that during the relevant 10.10.2025. It was further submitted that during the relevant 10.10.2025. It was further submitted that during the relevant period the accountant entrusted with the responsibility of compiling period the accountant entrusted with the responsibility of compiling period the accountant entrusted with the responsibility of compiling and furnishing the requisite details had fallen seriously ill, resulting and furnishing the requisite details had fallen seriousl and furnishing the requisite details had fallen seriousl in an unavoidable delay in responding to the notices. According to in an unavoidable delay in responding to the notices. According to in an unavoidable delay in responding to the notices. According to the learned Authorised Representative, the appeal came to be the learned Authorised Representative, the appeal came to be the learned Authorised Representative, the appeal came to be dismissed dismissed dismissed without without without granting granting granting the the the assessee assessee assessee an an an effective and effective effective and and meaningful opportunity to place the relevant material on record and meaningful opportunity to place the relevant material meaningful opportunity to place the relevant material substantiate its case on merits. substantiate its case on merits.

4.

We have carefully considered the rival submissions and We have carefully considered the rival submissions and We have carefully considered the rival submissions and perused the material available on record. It is a settled principle perused the material available on record. It is a settled principle perused the material available on record. It is a settled principle that the right of appeal is a valuable statutory right and that an that the right of appeal is a valuable statutory right and that an that the right of appeal is a valuable statutory right and that an

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appellate proceeding should ordinarily be decided on merits rather eding should ordinarily be decided on merits rather eding should ordinarily be decided on merits rather than on account of technical or procedural defaults. Equally well than on account of technical or procedural defaults. Equally well than on account of technical or procedural defaults. Equally well settled is the principle that no person should suffer adverse civil settled is the principle that no person should suffer adverse civil settled is the principle that no person should suffer adverse civil consequences without being afforded a reasonable and effective consequences without being afforded a reasonable and effective consequences without being afforded a reasonable and effective opportunity of hearing. nity of hearing.

4.1 In the facts of the present case, we find merit in the contention In the facts of the present case, we find merit in the contention In the facts of the present case, we find merit in the contention advanced on behalf of the assessee that the appeal has not been advanced on behalf of the assessee that the appeal has not been advanced on behalf of the assessee that the appeal has not been adjudicated on merits. The explanation furnished regarding the adjudicated on merits. The explanation furnished regarding the adjudicated on merits. The explanation furnished regarding the inability to comply with the notices, owi inability to comply with the notices, owing to the illness of the ng to the illness of the accountant responsible for handling the relevant records and accountant responsible for handling the relevant records and accountant responsible for handling the relevant records and compliances, cannot be brushed aside without due consideration. compliances, cannot be brushed aside without due consideration. compliances, cannot be brushed aside without due consideration. The impugned order reveals that the learned CIT(A) has primarily The impugned order reveals that the learned CIT(A) has primarily The impugned order reveals that the learned CIT(A) has primarily proceeded on the footing of non proceeded on the footing of non-representation and has not ation and has not examined the substantive contentions and documentary evidence examined the substantive contentions and documentary evidence examined the substantive contentions and documentary evidence which the assessee claims to possess in support of its case. which the assessee claims to possess in support of its case. which the assessee claims to possess in support of its case.

4.2 Having regard to the totality of the facts and circumstances, Having regard to the totality of the facts and circumstances, Having regard to the totality of the facts and circumstances, and in order to advance the cause of substantial and in order to advance the cause of substantial justice, we are of justice, we are of the considered view that the matter deserves to be restored to the the considered view that the matter deserves to be restored to the the considered view that the matter deserves to be restored to the file of the learned CIT(A) for fresh adjudication. Accordingly, the file of the learned CIT(A) for fresh adjudication. Accordingly, the file of the learned CIT(A) for fresh adjudication. Accordingly, the impugned order is set aside and the matter is remanded to the impugned order is set aside and the matter is remanded to the impugned order is set aside and the matter is remanded to the learned CIT(A), who shall decide the ap learned CIT(A), who shall decide the appeal afresh in accordance peal afresh in accordance with law after affording the assessee an adequate and effective with law after affording the assessee an adequate and effective with law after affording the assessee an adequate and effective

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opportunity of being heard and after duly considering such material opportunity of being heard and after duly considering such material opportunity of being heard and after duly considering such material and submissions as may be placed on record. and submissions as may be placed on record.

4.3 Since the matter is being restored to the file of Since the matter is being restored to the file of Since the matter is being restored to the file of the learned CIT(A) for de novo adjudication, we refrain from expressing any CIT(A) for de novo adjudication, we refrain from expressing any CIT(A) for de novo adjudication, we refrain from expressing any opinion on the merits of the additions challenged before us. All opinion on the merits of the additions challenged before us. All opinion on the merits of the additions challenged before us. All issues are left open to be urged by the parties before the learned issues are left open to be urged by the parties before the learned issues are left open to be urged by the parties before the learned CIT(A). Consequently, the grounds raised on mer CIT(A). Consequently, the grounds raised on merits do not call for its do not call for adjudication at this stage and are kept open. adjudication at this stage and are kept open.

5.

In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is In the result, the appeal of the assessee is statistical purposes. .

Order pronounced in the open Court on ounced in the open Court on 15/06/2026. /2026.

Sd/- Sd/ Sd/- (ANIKESH BANERJEE ANIKESH BANERJEE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 15/06/2026 Kunal Kr, P.S.

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Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, BY ORDER,

//True Copy// (Assistant Registrar) Registrar) ITAT, Mumbai ITAT, Mumbai

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