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Facts
The assessee, a firm, filed its return for AY 2018-19. The Assessing Officer (AO) made an addition of Rs. 1,22,44,805/- on account of unsecured loans. The assessee's appeal before the CIT(A) was dismissed for non-participation.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's submission about business disruptions due to COVID-19. The Tribunal set aside the CIT(A)'s order and remitted the matter back for denovo adjudication.
Key Issues
Whether the CIT(A) order dismissing the appeal for non-participation was justified, and whether the assessee should be granted another opportunity to present its case.
Sections Cited
68, 143(3)
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI S.S. VISWANETHRA RAVI & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
This appeal by the assessee is filed against the order of the learned Commissioner of Income Tax (Appeal), NFAC, Delhi, (in short Ld. CIT(A)) for the assessment year 2018-19, vide order dated 25.07.2024.
At the outset, we find that there is a delay of 252 days in appeal filed by the assessee, for which petition for condonation of delay along with reasons. The assessee submitted an affidavit for the delay stating that due to the halt in operation of business during COVID-19, the Company underwent a huge loss and debts of the company was piled up and the Directors of the Company was facing various litigations and further the Company is in :-2-: ITA. No:1672/Chny/2025 existence with skeleton staff, who mainly take care of existing compliance works. There are no staff who deals with Tax related work and hence there was a delay in filing the present appeal and prayed that the delay be condoned. After considering the petition filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit appeal filed by the assessee for adjudication.
Brief facts of the case are that the assessee is a firm and filed its return of income for the A.Y.2018-19 by declaring a total income of Rs.30,35,810/- on 28.11.2018. The case was selected for complete scrutiny and statutory notices were issued to the assessee and assessee filed the details called for. The AO found that the unsecured loan of Rs.1,72,89,805/- has been taken by the assessee during the impugned assessment year from four parties. The assessee during the proceedings submitted the ITR, Financials, Bank statements and confirmation of only one party Mr.P.S. Raghupathy to the tune of Rs.50,45,000/-. Hence, the AO made a addition u/s.68 of the Act to the tune of Rs.1,22,44,805/- received from other three parties and concluded the assessment u/s.143(3) of the Act dated 09.06.2021.
Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC on 02.08.2021.
At the outset, we observed that ld.CIT(A) has provided three opportunities for the assessee from 19.04.2022 to 12.02.2024 to appear for hearings as detailed in Para 1 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A), NFAC dismissed the assessee’s appeal as deficient by confirming the order of the AO by passing an order dated 25.07.2024. The ld.AR submitted that the assessee had not regularly checked the income tax portal and his email and hence he was not :-3-: ITA. No:1672/Chny/2025 aware of the notices issued by the ld.CIT(A) and hence he could not appear before the ld.CIT(A). In view of the above, the ld.AR prayed for one more opportunity before the ld.CIT(A), since the exparte order has been passed by the ld.CIT(A). Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the ld.CIT(A) to complete the assessment proceedings effectively.
Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).
We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by making an addition of Rs.1.22 Crores u/s.68 of the Act and the same has been dismissed by the ld.CIT(A)-NFAC due to non- participation of the assessee before the first appellate authority. Since, the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, we levy the cost of Rs.10,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of ld.CIT(A) and direct the ld.CIT(A) to denovo adjudicate the appeal on merits in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.
:-4-: ITA. No:1672/Chny/2025 9. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 02nd September, 2025 at Chennai.