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Facts
The assessee, engaged in the jewellery business, filed its return for AY 2017-18. During assessment, the AO made additions on account of unexplained credit and loans. The CIT(A) dismissed the appeal as the assessee did not respond to notices.
Held
The Tribunal condoned the delay in filing the appeal. The Tribunal noted that the AO made additions without issuing a show cause notice and the CIT(A) passed an ex-parte order. The Tribunal granted one more opportunity to the assessee.
Key Issues
Whether additions made by the AO without issuing a show cause notice are valid, and whether the assessee should be granted another opportunity to present its case.
Sections Cited
142(1), 143(3)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 18.02.2025 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 27.12.2019.
There is a delay of 127 days in filing the appeal by the assessee.
The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
The assessee is an individual, engaged in jewellery business and filed its return of income on 12.10.2017 declaring total income of Rs. 7,15,780/-. The A.O during assessment proceeding issued notice u/s.142(1) of the Act requesting to furnish the details of purchase/sale/stock, cash book, source for introduction of capital, confirmation for unsecured loan shown from brother, details of staff deposit and salary payable reflected in the liability side of the balance sheet, source for cash deposits made in bank account and other details. However, the A.O in the order passed u/s. 143(3) of the Act made addition of Rs. 16,70,000/- as unexplained credit in the form of introduction to capital, Rs.17,00,000/- as unexplained credit in the form of cash loan from brother, Rs.30,14,474/- as unexplained credits in the form of current liabilities. Aggrieved by the same, the assessee preferred an appeal before Ld. CIT(A). The Ld. CIT(A) dismissed the appeal relying on the order of ITAT, Delhi in the case of CIT v.
1. Multiplan India Pvt. Ltd. 38 ITD 320 (Del-Trib.) dismissed the appeal as the assessee did not respond to the notices issued.
The Ld. Authorized Representative (A.R.) for the assessee has submitted that the A.O after calling for information has not issued any show cause notice before making the addition and therefore, proper opportunity was not provided. The Ld. AR, therefore prayed that one more opportunity may be provided to substantiate its case before the A.O.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard both the parties and gone through the order of the Ld. CIT(A). The A.O has made addition without giving any show cause notice and the and Ld. CIT(A) has also passed order ex-parte as the assessee failed to respond the notices issued. We are of considered opinion that one more opportunity should be granted to the assessee to substantiate his case before the A.O keeping in view the principles of natural justice. Accordingly, we set aside the impugned order and remit the matter back to the file of the A.O for denovo assessment in accordance with law, after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to comply with all the notices issued by the A.O and furnish all relevant details for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 27th day of November, 2025 at Chennai.