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Facts
The assessee, a petrol pump business owner, filed her return showing total income of ₹9,78,950. The AO added ₹36,46,727 as undisclosed income for excess purchases and ₹1,25,43,804 as undisclosed money, totaling ₹1,71,69,481. The assessee did not comply with notices from the CIT(A), who dismissed the appeal for non-prosecution.
Held
The Tribunal held that the CIT(A) cannot dismiss an appeal for non-prosecution and that the assessee should be given an opportunity to represent her case properly. The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for de novo reassessment.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without considering the merits, and if the assessee should be granted another opportunity to present her case.
Sections Cited
250, 69A, 133(6), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 29.08.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “• That the purchases in question were made through M/s Annapurna Filling Station, a registered distributor of BPCL, with payments made directly to BPCL by Demand Drafts as per industry norms. These transactions are genuine, business-related, and duly recorded in the books of accounts with full banking trail. V • That section 69A treats unexplained cash or money as deemed income only if the explanation I.T.A. No.: 2267/KOL/2025 Assessment Year: 2017-18 Gita Sharma. by the assessee is unsatisfactory. Here, the payments are fully traceable through banking channels, and adequate documentary evidence is available, thereby satisfying the requirement and negating addition under Section 69A. • That the amount of ₹1,25,43,804/- represents trade receivables arising from genuine credit sales made in the ordinary course of business. These are duly recorded in the books of accounts, reflected in audited financial statements, and linked directly to sales already offered to tax. Hence, these are not unexplained or unaccounted cash credits but part of routine business operations. • That the trade receivables are supported by ledger records and confirmations from debtors establishing their genuineness and existence. The absence of some correspondences does not impair the legal validity of these receivables, especially when the overall financial trail is consistent and duly audited. • That section 69A addition can only be made if the credit is unexplained. In the present case, the explanation for the trade receivables and link to sales is satisfactorily provided. Various rulings hold that if identity, genuineness, and creditworthiness of the parties are established, no addition can be made under Section 69A. • For that, the appellant craves leave to adduce additional grounds and/or change or withdraw any of the grounds or the whole of the appeal at the lime of hearing.”
Brief facts of the case are that the assesses is a business woman and runs her Petrol Pump business in the name and style of M/s. Kamala Filling Station and had filed her income tax return showing total income of ₹9,78,950/-. The Assessing Officer (hereinafter referred to as Ld. 'AO') noted that the assessee had shown excess purchases in the trading account during the relevant period and thus, it was nothing but excess/inflated purchases shown and accordingly, a sum of ₹36,46,727/- was added as undisclosed income u/s 69A of the Act to the total income of the assessee and also an amount of ₹1,25,43,804/- was treated as undisclosed money and added to the total income of the assessee. The Ld. AO assessed the total income of the assessee at I.T.A. No.: 2267/KOL/2025 Assessment Year: 2017-18 Gita Sharma. ₹1,71,69,481/- u/s 143(3) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued four notices of hearing to the assessee but the assessee remained non- compliant. Since the assessee did not respond to the notices issued for hearing, the Ld. CIT(A) cited the decision of the Hon’ble Supreme Court in the case of CIT Vs B.N. Bhattacharjee & Others [1979] 10 CTR 354 (SC) and the decision of Hon’ble M.P. High Court in the case of Estate of Late Tukojirao Holkar Vs CWT [1979] 223 ITR 480 (MP) and also the finding of the ITAT Delhi Bench in the case of CIT Vs Multiplan India Pvt. Ltd. [1991] 38 ITD 320 (Del) and dismissed the appeal of the assessee on account of non-prosecution.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
None appeared on behalf of the assessee and the case was heard with the assistance of the Ld. DR. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld.
We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). We note that section 250(6) of the Act casts a duty upon the Ld. CIT(A) to pass an order in appeal which should state the points for determination and a decision as well as the reason for arriving at such decision. We find that at both the stages of assessment order before the Ld. AO as well as before the Ld. CIT(A) in the appeal, proper representation was not made on behalf of the assessee and even the notices issued u/s 133(6) of the Act were not responded by the parties. I.T.A. No.: 2267/KOL/2025 Assessment Year: 2017-18 Gita Sharma. and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee's appeal; he cannot dispose the assessee's appeal merely by holding that the Assessing Officer's order is a self- speaking order which requires no interference. It has also been held in the case of Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) that the law does not empower the CIT(A) to dismiss the appeal for non-prosecution. Therefore, we deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent her case properly as the assessee contends that the deposits were out of the sale proceeds and the addition was made on account of lack of proper representation. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remit the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission she wants to make and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in the appeal are allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 30th December, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 30.12.2025 Bidhan (Sr. P.S.) I.T.A. No.: 2267/KOL/2025 Assessment Year: 2017-18 Gita Sharma. Copy of the order forwarded to:
Gita Sharma, Birudhia, Sharma Nivash, Panagarh, Durgapur, West Bengal, 713148. 2. I.T.O., Ward-2(4), Durgapur.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order