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Facts
For the assessment years 2018-19 and 2019-20, the assessee did not file returns and later faced reassessment under section 147. The CIT(A) dismissed the appeals ex-parte due to non-compliance with hearing notices, despite the assessee claiming to have filed submissions. The assessee appealed this dismissal.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeals ex-parte without considering the submissions and evidence filed by the assessee, violating principles of natural justice. The issues required factual verification and examination of evidence. Therefore, the appeals were set aside to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeals ex-parte without considering the assessee's submissions and evidence, and whether the matter should be remanded for fresh adjudication.
Sections Cited
148, 147, 69A, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The present appeals have been instituted by the assessee against the order of the NFAC, Delhi passed u/s 250 of the Act for the assessment years 2018-19 and 2019-20.
First, we take up assessee’s appeal in for A.Y. 2018-19.
The facts in brief are that the assessee for the year under consideration did not file any return of income. The case was reopened by issuing notice under section 148 of the Act and assessment was completed under section 147 of the Act by making an addition of cash deposits under section 69A of the Act, disallowances of depreciation, disallowances of salary paid to employees, disallowances of vehicle maintenance, interest paid on bank loan etc.
The aggrieved assessee preferred appeal before the learned CIT(A).
The learned CIT(A) dismissed the assessee’s appeal in an ex- parte order on account of noncompliance by the assessee in response to hearing notices issued.
Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.
The learned AR before us filed a paper book running from pages 1 to 94 and submitted that the assessee during the appellate proceeding before the learned CIT(A) filed detailed submissions as on 10th July 2025 along with supporting documents and annexures. However, the learned CIT(A) without considering the assessee’s submission dismissed the appeal vide order dated 16th July 2025 in an ex parte order. Accordingly, the ld. AR before us submitted to restore the issue to the file of the ld. CIT-A for fresh adjudication as per the provisions of law.
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On the contrary, the learned DR vehemently supported the finding of the lower authorities. However, the ld. DR did not raise any serious objection if the matter is set aside to the file of the ld. CIT-A for fresh adjudication as per the provisions of law.
We have heard the rival contentions of both the parties and perused the materials placed on record. We note that the Ld. CIT(A) has dismissed the appeal of the assessee ex parte on account of alleged non-compliance. However, from the record, it is evident that the assessee had filed detailed submissions along with supporting documents before the Ld. CIT(A) during the appellate proceedings. In our considered view, once the assessee has placed submissions on record, it is the duty of the Ld. CIT(A) to examine the same and adjudicate the issues on merits. The dismissal of appeal without considering the materials filed by the assessee is not in accordance with law and is against the principles of natural justice. The Ld. CIT(A), being a quasi-judicial authority, is required to pass a speaking order after due consideration of the submissions and evidence placed before him.
8.1 We further observe that the additions made by the AO involve factual verification and examination of evidence such as cash deposits, expenses claimed, and other disallowances. These issues cannot be decided without proper appreciation of the materials placed by the assessee. Therefore, in the interest of justice and fair play, the assessee deserves one more opportunity to present his case before the ld. CIT-A. Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the entire issue to the file of the Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) is directed to consider the submissions and . evidence already filed by the assessee and any further materials that may be filed and decide the appeal afresh in accordance with law. The assessee is also directed to cooperate and not seek unnecessary adjournments.
8.2 We further note that the assessee before us has filed application for admission of additional grounds of appeal. However, the learned AR before us submitted that the assessee is not willing to press the issue raised in additional grounds of appeal. Hence, we hereby dismiss the additional ground of appeal raised by the assessee as not pressed.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Coming to assessee’s appeal in for A.Y. 2019-20
For the year under consideration, the assessee filed return under section 148 of the Act declaring loss of Rs. 11,48,488/- only. The assessment was completed under section 147 of the Act vide order dated 04-03-2024 by disallowing the loss and making addition of Rs. 2,52,49,540/- by treating the credit of unsecured loan as unexplained credit.
The aggrieved assessee preferred appeal before the learned CIT(A).
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The learned CIT(A) during the proceeding issued various notices to the assessee to file necessary submission and evidence in support of grounds of appeal raised. However, the assessee failed to avail the opportunity. Hence, the learned CIT(A) dismissed the assessee’s appeal in an ex parte order.
Being aggrieved by order of the learned CIT(A), the assessee is in appeal before us raising several grounds of appeal.
The learned AR before us submitted that the Ld. CIT(A) has passed the order ex parte without appreciating the facts and circumstances of the case. It was contended that the assessee could not appear due to reasonable reasons and therefore could not furnish the required details. The Ld. AR submitted that the assessee is now in possession of necessary evidence to substantiate the claim regarding unsecured loans and loss and is ready to place the same before the appellate authority. It was therefore prayed that one more opportunity may be granted and the matter may be restored to the file of the Ld. CIT(A) for fresh adjudication in the interest of justice as per the provisions of law.
On the contrary, the learned DR supported the order of the Ld. CIT(A) and submitted that sufficient opportunities were already provided to the assessee during the appellate proceedings. Despite this, the assessee failed to comply and furnish necessary details. Therefore, the Ld. CIT(A) was justified in passing the ex parte order. However, the Ld. DR fairly submitted that if the Tribunal is inclined to restore the matter, .
appropriate directions may be given to the assessee to fully cooperate in the proceedings.
We have considered the rival submissions and perused the material available on record. We note that the Ld. CIT(A) has dismissed the appeal of the assessee ex parte on account of non-compliance by the assessee in response to notices issued during the appellate proceedings.
16.1 At the same time, we find that the issues involved in the present case are substantial in nature, wherein the AO has made addition by treating unsecured loans as unexplained credits and disallowed the loss claimed by the assessee. These issues require proper examination of facts and evidence. In our considered view, such additions cannot be sustained merely on account of non-appearance of the assessee without examining the merits of the case.
16.2 It is a settled position that the Ld. CIT(A), being a quasi-judicial authority, is required to adjudicate the issues on merits and pass a reasoned order. Even in cases of non-compliance, the appeal should not be dismissed in limine without dealing with the grounds raised by the assessee. Considering the facts of the present case and in the interest of justice and fair play, we are of the view that the assessee should be given one more opportunity to present his case before the Ld. CIT(A). Accordingly, we set aside the impugned order of the Ld. CIT(A) and restore the entire issue to the file of the Ld. CIT(A) with a direction to adjudicate the appeal afresh on merits after considering the submissions and evidence to be filed by the assessee. The assessee is also directed . to cooperate in the appellate proceedings and not to seek unnecessary adjournment.
We further note that the assessee before us has filed application for admission of additional ground of appeal. However, the learned AR before us submitted that the assessee is not willing to press the issue raised in additional grounds of appeal. Hence, we hereby dismissed the additional ground of appeal raised by the assessee as not pressed.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
In the combined results, both the appeals of the assessee are partly allowed for statistical purposes. Order pronounced in court on 9th day of April, 2026