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Facts
The assessee filed an appeal against an ex-parte order passed by the CIT(A) which confirmed additions made by the AO for unexplained unsecured loans and sundry creditors. The AO made additions for want of submission and details from the assessee.
Held
The Tribunal noted that both lower authorities passed ex-parte orders without adequate opportunity to the assessee. The Tribunal set aside the orders and restored the matter to the AO for readjudication, granting the assessee one last opportunity to present their case.
Key Issues
Whether the lower authorities erred in passing ex-parte orders without affording adequate opportunity to the assessee to present their case and whether the matter should be remanded for fresh adjudication.
Sections Cited
68, 144
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
Assessment Years: 2021-22 M/s.N R INFRA, Income Tax Officer, No.29/49-A, East Mada Street, Non-Corporate Ward-8(2), Koyambedu S.O, Chennai. Koyambedu, Chennai-600 107. [PAN: AAOFN9058K] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr.R.Viswanathan, F.C.A. प्रत्यर्थी की ओर से /Revenue by : Ms.Gouthami Manivasagam, JCIT सुनवाई की तारीख/Date of Hearing : 25.08.2025 घोषणा की तारीख /Date of Pronouncement : 10.09.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed by the assessee against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 2025-26 / 1075742591(1) dated 22.04.2025 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment year 2021-22. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.
2.0 At the outset, as regards the Ld. Counsel for the assessee submitted that both the lower authorities the Ld.AO as well as Ld.CIT(A) has passed ex-parte orders in case of the assessee. It was submitted that the only issue under consideration is an addition of Rs.90,24,015/- on account of unexplained unsecured loans u/s. 68, and of Rs.1,67,50,302/- on account of unexplained sundry creditors u/s 144. The impugned addition was made by the Ld.AO for want of any submission and details by the assessee. The Ld. Counsel for the assessee submitted that the Ld.First Appellate Authority has also confirmed the addition by passing an ex-parte order without giving sufficient opportunity of being heard. It was accordingly pleaded that in the interest of justice the matter may be restored back to the file of Ld.AO for readjudication. The Ld. Counsel assured that full compliance would now be made to the statutory notices. 3.0 The Ld. DR would like to make us believe on the correctness of the order of lower authorities. It was however simultaneously pleaded that in case the matter is remitted back, costs be imposed upon the appellant for wasting the time of the Bench. 4.0 We have heard rival submissions in the light of material available on records. As per facts recorded by the Ld. AO in his order, he had given opportunities to the assessee for filing the required details which were not satisfactorily filed by the assessee leading to his making the Page - 2 - of 4 impugned addition. We have however noted that the order passed by the Ld. AO is not a speaking order and clear facts have not been brought on records before making the impugned addition. There are also indications of no enquiries conducted by the Ld.AO. Before the Ld.First Appellate Authority also the conduct of the assessee was far from satisfactory as far as compliance to statutory notices are concerned leading to dismissal of the appeal for want of adequate persecution by the assessee. 5.0 We have thus noted that inadequate submission of details and evidences, before the lower authorities qua sources of deposits in assessee’s bank account lies at the core of the controversy. We are therefore of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and file all supporting evidences before the Ld.AO. The assessing officer is the primary authority under the income tax act to be examine facts of a case in the light of available evidences before determining correct taxable income of a tax payer. We therefore set aside the order of lower authorities on this issue and we direct the Ld. AO to readjudicate the matter de novo by examining the matter afresh in accordance with law and by passing a speaking order. Reliance in this regard is placed upon the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216. The Ld. AO shall give opportunities of being heard to the assesse and it shall be Page - 3 - of 4 Ld. AO. Any non-compliance on the part of the assesse can be adversely viewed. We however find force in the argument of the Ld. DR that assessee’s repeated non-compliance has indeed caused loss of precious time of the statutory authorities. Consequently, the decision to remit the matter to the Ld. AO is however subject to payment of cost of Rs.10,000/- (Rupees ten thousand only) by the assessee to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within 30 days of the receipt of this order. Accordingly, all the grounds of appeal raised by the assessee on this issue are allowed for statistical purposes. 6.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 10th , Sept-2025 at Chennai. Sd/- Sd/- (एबी टी. वर्की) (अधमताभ शुक्ला) (ABY T VARKEY) (AMITABH SHUKLA) न्याधयक सदस्य / Judicial Member लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 10th , Sept-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: /Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF
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