Loading judgment…
Facts
During a search on the Yashovardhan Birla Group, documents seized from Shri P.V.R. Murthy's residence led to a notice under section 153C of the Income Tax Act to the assessee. Statutory notices under section 142(1) were sent to the assessee's traced addresses but were returned as "unclaimed". Subsequently, a show cause notice was issued for assessment year 2014-15, to which the assessee did not respond.
Held
The Tribunal found that the assessee had not appeared before the Assessing Officer (AO) nor the Commissioner of Income Tax (Appeals) (CIT(A)) nor provided necessary documentary evidence for their claims. The CIT(A) dismissed the appeal, upholding the additions made by the AO. The Tribunal decided to grant one more opportunity to the assessee for a de novo adjudication on merits.
Key Issues
Whether the assessee should be granted another opportunity to present its case on merits, considering it neither appeared before the AO nor the CIT(A) and did not provide documentary evidence.
Sections Cited
250, 37(1), 69C, 68, 153C, 142(1), 148, 144, 251(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYASHRI SANDEEP SINGH KARHAIL
Date of Hearing – 07/07/2025 Date of Order - 09/07/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M.
The assessee has filed the present appeals against the separate impugned orders of even date 02/01/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals)-52, Mumbai [“learned CIT(A)”], for the assessment years 2011-12 and 2012-13.
Since both appeals pertain to the same assessee involving similar issues arising out of a similar factual matrix, accordingly, both appeals were heard together as a matter of convenience and are being decided by way of this ITAs No.1079 & 1080/Mum/2025 (A.Ys. 2011-12 & 2012-13) 2 consolidated order. With the consent of the parties, the appeal for the assessment year 2011-12 is considered as a lead case. In both appeals, the assessee has raised similar grounds, with a variance in the amount involved. Therefore, the grounds raised
by the assessee in its appeal for the assessment year 2011-12 are reproduced hereunder for ready reference: - “1. The learned CIT(A) erred in confirming an addition of Rs. 1,76,465/- to appellant's income by disallowance of expenditure u/s 37(1) of the Income Tax Act. (Disallowed by learned assessing Officer u/s 69C)
2. The learned CIT(A) erred in confirming additions aggregating Rs.4,45,07,600/- to appellant's income as unexplained cash credits u/s 68.
3. The learned AO has erred in making the assessment without serving the notice u/s 153C.
4. The learned CIT(A) has erred in not disposing of the appeal on merits.”
We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that during the search action under section 132 of the Act on Yashovardhan Birla Group on 07.01.2014, some of the directors and other persons associated with the group were also covered. During the aforesaid search action, one of the directors of Yashovardhan Birla Group, Shri P.V.R. Murthy’s residential premises were also covered under the search action. On the basis of the documents seized from the residential premises of Shri Murthy, notice under section 153C of the Act was issued to the assessee after recording necessary satisfaction. Subsequently, a statutory notices under section 142(1) were issued to the assessee at the addresses traced from the details of the return of income or seized material available with the Assessing Officer (“AO”). However, these notices were returned with the remark “unclaimed”. Thereafter, a show cause notice was issued at the address on which notice
ITAs No.1079 & 1080/Mum/2025 (A.Ys. 2011-12 & 2012-13) 3 under section 148 of the Act was issued for the assessment year 2014-15, however, the assessee did not respond to any of the notices/show cause notice issued during the assessment proceedings under section 153C of the Act. Accordingly, vide order passed under section 144 read with section 153C of the Act, the AO made the addition of ₹ 3,75,07,600/- under section 68 of the Act as the assessee failed to discharge the onus of explaining the source of cash deposits in its bank account. Further, the AO made the addition under section 69C in respect of expenditure claimed by the assessee in its return of income. Since the assessee did not prove the genuineness of the liability shown on account of creditors, the AO also made the addition amounting to ₹ 70 lakh under section 68 of the Act. Accordingly, the AO computed the total income of the assessee at ₹ 4,47,24,801/- for the assessment year 2011-12.
The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee and upheld the addition made by the AO. Being
From the perusal of the impugned order, we find that the learned CIT(A) issued in total of 10 notices of hearing to the assessee. However, the assessee only responded to the notices issued on 12.04.2019 and 20.05.2019. Thus, 7 notices issued after 10.10.2019 till the passing of the impugned order were not responded to by the assessee. We further find that vide the impugned order, the learned CIT(A) considered the submission filed by the assessee on 28.05.2019, while deciding the assessee’s appeal. From the perusal of the said submission, which is reproduced by the learned CIT(A) from Pages 18- 24 of the impugned order, we find that the same is on the jurisdictional issue raised by the assessee in its appeal and there are no submissions on merit of ITAs No.1079 & 1080/Mum/2025 (A.Ys. 2011-12 & 2012-13) 4 the additions made by the AO or reference to any documentary evidence. Therefore, it is evident that the assessee did not avail of any opportunity to furnish any documentary evidence in respect of its claim before the learned CIT(A).
At the outset, it is pertinent to note that by the Finance (No.2) Act, 2024 w.e.f. 1st October, 2024, the learned CIT(A) has been empowered under section 251(1)(a) of the Act to set aside the assessment and remand the case back to the AO for making a fresh assessment, in case the assessee files an appeal against an order of assessment made under section 144 of the Act. However, in the present case, as noted above in the appeal by the assessee against the order passed by the AO under section 144 r.w.s. 153C of the Act, the learned CIT(A) did not exercise the power granted to it to restore the case to the file of the AO.
In the facts and circumstances as noted above, we are of the considered view that in the interest of justice and fair play, the assessee should be granted one more opportunity to represent its case on merits and produce all the documents in support of its claim. Since in the present case, the assessee neither appeared before the AO nor before the learned CIT(A), we deem it fit and proper to restore the matter to the file of the jurisdictional AO for de novo adjudication on merits after considering all the details/submissions as may be filed by the assessee and after providing due opportunity of hearing to the assessee. The assessee is directed to cooperate in the assessment proceedings and furnish all the details as may be sought by the AO for complete adjudication. As the matter is being restored to the jurisdictional AO
ITAs No.1079 & 1080/Mum/2025 (A.Ys. 2011-12 & 2012-13) 5 for adjudication on merits, the other grievance raised by the assessee in the present appeals does not call for adjudication at this stage. Accordingly, the impugned order in both the appeals is set aside, and the grounds raised by the assessee are allowed for statistical purposes.
In the result, the appeal by the assessee for the assessment years 2011-12 and 2012-13 are allowed for statistical purposes. Order pronounced in the open Court on 09/07/2025