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Facts
The assessee, engaged in Engineering Work & Contract of Machinery, filed an appeal against the CIT(A)'s order which confirmed the AO's additions. The AO had made additions on account of unexplained sundry creditors, difference in opening capital, non-deduction of TDS, and ad-hoc disallowance. The assessee's case was reopened due to claimed sundry creditors for which returns were not filed.
Held
The Tribunal observed that the assessee was non-compliant throughout the appellate proceedings, but considering the principles of natural justice, it granted the assessee one more opportunity. The issues were remanded to the CIT(A) for de novo adjudication.
Key Issues
Whether the assessee should be given another opportunity to present its case before the CIT(A) when the case is being remanded for de novo adjudication, and whether the principles of natural justice were violated by the ex-parte order.
Sections Cited
250, 143(3), 147, 148, 143(2), 142(1), 144, 133(6), 234B, 234C, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “H(SMC
(Assessment Year: 2012-13) RP Panchal (HUF) Income Tax Officer-31(3)(2), Gala No. M, Sainath Industrial Estate, Mumbai Kotkar Road, Goregaon East, Mumbai Vs. – 400063. PAN/GIR No. AAGHR2224F (Appellant) : (Respondent) Assessee by : Ms. Tisha Bagh a/w. Mr. Dhaval Shah, Adv’s Respondent by : Shri Pravin Salunkhe, SR DR Date of Hearing : 05.08.2025 Date of Pronouncement : 29.08.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) ADDL/JCIT (A)-2 Gurugram (‘ld. CIT(A)’ for short), passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2012-13.
It is observed that the assessee has filed the present appeal with a delay of 164 days beyond the period of limitation for which the assessee has filed an application along with affidavit for condoning the said delay. On perusal of the same, we deem it fit to condone the delay for the reason that the assessee had ‘sufficient cause’ for the said delay. Delay condoned.
(A.Y. 2012-13) RP Panchal (HUF) 3. The assessee has raised the following grounds of appeal:
1. The Ld. CIT(A) has erred in law and in facts in passing the order u/s. 250 of the Act dated 03.09.2024 dismissing the appeal of the appellant and confirming the order passed by the AO u/s 143(3) r.w.s. 147 of the Act which is bad and invalid in the eyes of law.
2. The Ld. CIT(A) has erred in law and in facts in not appreciating that the reopening of assessment and the consequent reassessment order is invalid and bad in the eyes of law.
3. The Ld. CIT(A) has erred in law and in facts in passing the order in violation of principles of natural justice.
4. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in making an addition of Rs. 7,28,599/- on account of unexplained sundry creditors.
5. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in making an addition of Rs. 67,252/- on account of difference in opening capital for the year with closing capital of preceding year.
6. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in making an addition of Rs. 42,305/-on account of not deducting TDS.
7. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in making adhoc disallowance at 25% of the total expenses claimed of Rs. 16,84,885/- resulting in addition of Rs. 4,21,221/- in the hands of the appellant.
8. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in charging interest u/s 234B and 234C of the Act.
9. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. AO in initiating penalty proceedings u/s. 271(1)(c) of the Act.”
4. Brief facts of the case are that the assessee is engaged in Engineering Work & Contract of Machinery. The assessee had filed its return of income dated 30.09.2013, declaring total income at Rs. 5,49,460/- and was assessed u/s. 143(3) of the Act, where the ld. AO made an addition of Rs. 1,23,22,004/- as unexplained Sundry creditor. The assessee’s case was then reopened vide notice u/s. 148 dated 29.03.2017 for the reason (A.Y. 2012-13) RP Panchal (HUF) that the assessee has claimed sundry creditors to the tune of Rs. 2,27,30,663/- while the return of the income for A.Y. 2010-11 & 2011-12 has not been filed by the appellant. Hence the claim of sundry creditors in the return of income does not arise. Further, notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee but the assessee had not complied with the same. The ld. AO then issued show cause notice dated 23.10.2017 to complete assessment as per provisions of Section 144 of the Act. The ld. AO also issued notice u/s. 133(6) of the Act to the sundry creditors but returned unserved. As the assessee failed to furnish the complete details/information as required vide statutory notices issued by the ld. AO, inspite of several opportunities, the ld. AO passed the assessment order dated 26.12.2017 u/s. 143(3) r.w.s. 147 of the Act, determining total income at Rs. 18,31,160/- after making the impugned addition.
Aggrieved the assessee was in appeal before the first appellate authority, who vide an ex parte order dated 03.09.2024, dismissed the appeal filed by the assessee.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. AO before the first appellate authority but has been non-compliant throughout the appellate proceeding.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present its case before the ld. CIT(A).
(A.Y. 2012-13) RP Panchal (HUF) 9. The learned Departmental Representative ('ld. DR' for short) vehemently opposed to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunities by the ld. AO as well as the ld. CIT(A) which was not availed by the assessee.
On the above facts of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation. We, therefore, remand all these issues back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to strictly comply with the proceedings without any undue delay on its side and the ld. CIT(A) is also directed to decide the issue on the merits of the case based upon the submission of the assessee and in accordance with law.