What did the Tribunal hold?

The Tribunal found that the CIT(A) rejected the appeal on a technical ground without examining the merits or granting adequate opportunity to the assessee. The assessee has a good arguable case on the merits regarding additions to paid-up capital, salary, and audit fee.

The assessee's appeal before the CIT(A) was rejected ex-parte due to a delay of two and a half months in filing. The assessee claimed the assessment order was not served at their correct address, and the CIT(A) did not consider the merits of the case.

What were the issues?

Whether the CIT(A) was justified in rejecting the appeal ex-parte without considering the merits and granting a proper opportunity to the assessee. Whether additions on account of share capital can be made when identity and genuineness are established.

M/S. Shri Sai Leela Finance &… vs ITO | ITAT Jodhpur 2026

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Amit Kothari, CA (Virtual), Shri Vaibhav Agarwal, Addl. CIT-DR (Virtual)

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 277/Jodh/2017 (Assessment Year – 2011-12) M/s Shri Sai Leela Finance & Income Tax Officer, Ward-3 Investments Ltd. Bhilwara CC-137, Gol Market, Near Sector No. 2, Jawahar Nagar, Jaipur-302004 PAN No. AAJCS 0506 R Assessee by Shri Amit Kothari, CA (Virtual) Shri Vaibhav Agarwal, Addl. CIT-DR (Virtual) Revenue by Date of Hearing 12 / 05 / 2026 Date of Pronouncement 21 / 05 / 2026 ORDER PER DR. MITHA LAL MEENA, A.M.: This appeal by assessee is filed against the order Commissioner of Income Tax Appeals, Ajmer [hereinafter referred to as CIT(A)] dated 10.04.2017 with respect to assessment year 2011-12 challenging therein the order passed by the Ld. CIT(A) ex-parte qua the assessee.

At the outset, the Ld. Counsel for the assessee submitted that the appeal of the assessee was rejected by Ld. CIT(A) ex-parte and that on account of denying condonation of delay of two and half months in filing appeal before him. The AR for the assessee has explained in reason for the delay in filing the appeal that the assessment order passed by the AO was not served upon the

2 ITA No. 277/Jodh/2017 Asst. Year: 2011-12 appellant as it was served by way of affixture on the old address. The AR contended that the Ld. CIT(A) did not examine the appeal on merits of the case. Thereby, the appellant assessee has suffered heavily on account of rejection of appeal on technical ground for holding procedural irregularities. The AR contended that the appellant being in financial crunch in the fight to overcome the losses, coupled with serious illness of the main Director, could hardly cope up with the routine business needs.

In support of the contentions raised by the Ld. AR, he placed reliance on the decision of Hon’ble Rajasthan High Court in the case of Tribhuwan Kumar and Others reported in (2007) 294 ITR 401 (Raj.) wherein it was suggested that the appeal should be decided on merits after due opportunity of hearing. He requested that appeal may be restored to the file of the Ld. AO for passing de novo assessment order after granting adequate opportunity of being heard.

The Ld. DR on the other hand placed reliance on the order of the lower authorities.

We have heard both the sides, perused the material on record and the impugned order. Admittedly, the appeal of the assessee has been rejected by Ld. CIT(A) on technical ground, whereby he rejcted condonation of short delay of two and half months in filing the appeal before him. It is also noted that Ld.

3 ITA No. 277/Jodh/2017 Asst. Year: 2011-12 CIT(A) has not examined and appreciated the facts of the case. Since there was no adequate opportunity of being heard has been granted to the assessee by the lower authorities, the appellant assessee has been denied to make relevant submissions and arguments in support of its claim made in the grounds of appeal on the issue of the addition of paid up capital, the salary and audit fee.

In the present case, the addition has been made on account of share capital received by the assessee during the assessment year under consideration. The Ld. Counsel has argued that addition on account of share capital cannot be made in the hands of the company once the identity and genuineness of the transaction is established. In support, he placed reliance on the various judgments delivered by Hon’ble Apex Court in the case of CIT Vs. Lovely Exports (P.) Ltd. (2008) 6 DTR (SC) 308 and CIT Vs. Steller Investment Ltd. (2000) 164 CTR (SC) 287.

Thus, the appellant has a good arguable case on the merits. In view of that matter, the assessee deserves to be granted one more opportunity of being heard. We, therefore, consider it deem appropriate to remand back the matter to the file of the AO to pass de novo assessment order after considering the submissions of the assessee by granting adequate opportunity of being

4 ITA No. 277/Jodh/2017 Asst. Year: 2011-12 heard. The assessee shall cooperate in the de novo assessment proceedings before the AO in furnishing the information required during the course of examination and verification in the fresh proceeding for completion of the assessment.

Accordingly, the matter is restored back to the file of the AO to pass de novo assessment order, in accordance with law.

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

Order pronounced in the open court on 21/05/2026.

Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 21/05/2026. Nimisha Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,

M/S. SHRI SAI LEELA FINANCE & INVESTMENTS LTD.,,JAIPUR vs. ITO, BHILWARA

What did the Tribunal hold?

What were the facts?

What were the issues?

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