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Facts
The assessee company did not file its return of income. The case was reopened due to alleged receipt of 'interest other than interest on securities' of Rs. 6,18,800/-, which escaped assessment. Despite notices, the assessee failed to file its return and furnish details, leading to a best judgment assessment and addition u/s 69A. The CIT(A) upheld this ex-parte order.
Held
The Tribunal held that the assessee should be given one more opportunity to present its case before the AO, adhering to principles of natural justice. The issues were remanded to the AO for de novo adjudication.
Key Issues
Whether the assessee should be given another opportunity to present its case before the AO, given the ex-parte nature of the assessment and appellate orders, and whether the addition made u/s 69A is justified.
Sections Cited
250, 147, 144, 144B, 148, 142(1), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
(Assessment Year: 2019-20) Mairu Impex Pvt. Ltd. ITO Ward-5(2)(1), Mumbai. 1/10, Gandhi Niwas CHS Ltd., Khandilkar Road, Girgaon, Mumbai – Vs. 400 004. PAN/GIR No. AAGCM2229Q (Appellant) : (Respondent) Assessee by : Ms. Sruti Kalyanikar (Virtually Present) Respondent by : Shri Sanjeev M. Bhagat, SR. DR Date of Hearing : 04.08.2025 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) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2019-20.
The assessee has raised the following grounds of appeal:
1. On the facts and in the circumstances of the case and in law the Honble CIT(A) erred in upholding an ex-parte order passed u/s. 147 r.w.s 144 r.w.s 144B of the IT Act 1961 without considering the submission filed which is against the principles of natural justice and law and the reason assigned for doing so are wrong and contrary to the provision of Income Tax Act and rules made there under.
(A.Y. 2019-20) Mairu Impex Pvt. Ltd.
2. On the facts and in the circumstances of the case and in law the Honble CIT(A) erred in upholding addition of Rs.6,18,800/-to the returned income by treating notional interest income reflected in 26AS as unexplained cash/Investment u/s 69A of the IT Act 1961 without appreciating the fact that the said amount is never received by assessee and the reason assigned for doing so are wrong and contrary to the Provisions of Income Tax Act and rules made there under.
Brief facts of the case are that the assessee company had not filed its return of income for the year under consideration. The assessee’s case was reopened for the reason that the assessee has received ‘interest other than interest on securities’ amounting to Rs.6,18,800/- from M/s Opulent Trading and Investment Pvt Ltd during the year under consideration which has escaped assessment and notice u/s. 148 dated 28.03.2023 was duly issued by the ld. JAO and served upon the assessee. In response to the notice u/s. 148 of the Act, the assessee failed to file its return of income for the year under consideration. Notice u/s. 142(1) of the was issued and served upon the assessee. 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 u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 29.02.2024, being the best judgment assessment, determining total income at Rs. 6,18,800/- after making an addition of Rs. 6,18,800/- u/s. 69A of the Act as unexplained income.
Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 12.03.2025 upheld the addition made by the ld. AO vide an ex parte order, where the assessee is said to have not complied with the appellate proceeding.
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. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that (A.Y. 2019-20) Mairu Impex Pvt. Ltd. the assessee had ‘sufficient cause’ for its non-appearance before the lower authorities and prayed that the assessee may be given one more opportunity to present its case before the ld. AO.
The learned Departmental Representative ('ld. DR' for short) for the revenue vehemently opposed to setting aside the issue back to the lower authorities for the reason that the assessee has been non-compliant before the lower authorities inspite of various opportunities provided.
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 ld. AO 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. AO for de novo adjudication. The assessee is directed to strictly comply with the proceedings without any undue delay on its side and the ld. AO 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.