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Facts
The assessee's case for AY 2015-16 was selected for scrutiny, resulting in an addition of ₹1,95,41,991/- to income by the AO under Section 143(3). The assessee's appeal before the CIT(A) was dismissed ex parte due to non-compliance with notices, upholding the AO's order.
Held
The Tribunal found the CIT(A)'s ex parte decision was due to non-prosecution by the assessee. In the interest of justice, and considering the request for an opportunity to present evidence regarding sundry creditors, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the AO for a de novo reassessment, providing the assessee a proper opportunity to be heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex parte due to non-compliance, and if the matter should be remanded to the AO for a fresh assessment with a proper opportunity for the assessee to present evidence, particularly concerning sundry creditors.
Sections Cited
250, 143(3), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ 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 2015-16 dated 04.04.2025, which has been passed against the assessment order u/s 143(3) of the Act, dated 23.12.2017. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the Orders passed by the lower authorities are arbitrary, erroneous, without proper reasons, invalid and bad-in-law, to the extent to which they are prejudicial to the interests of the appellant.
For that the date of hearing fixed by the Ld. CIT(A) on 12.03.2025 was on the request of the appellant vide request dated 07.03.2025 and default on I.T.A. No.: 1218/KOL/2025 Assessment Year: 2015-16 Sandeep Poddar. the part of the appellant in submission of written arguments ought not to have resulted in passing an ex-parte order by the Ld. CIT(A) on 04.04.2025. 3. For that the Ld. CIT(A) ought to have properly considered various grounds of appeal and statement of facts forming part of the appeal Form No.35 and ought not to have dismissed the appeal for non-appearance of the appellant on 12.03.2025 on alleged grounds.
For that the appellant had explained the issues involved in appeal in respect of which there was Notice u/s 142(1) of the Income Tax Act, 1961 which was duly complied with by the appellant who had submitted relevant details.
For that the A.O. having noted in the order of assessment about the compliance to the notice u/s 142(1) and appearance of Advocate S.K. Das from time to time ought not to have proceeded to frame an ex-parte order on 04.04.2025 without referring to the assessment records.
For that the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds.”
Brief facts of the case are that the assessee is an individual and during the year under consideration derived income from business or profession, house property, capital gains and other sources. The assessee had filed his return of income showing total income of ₹21,51,320/- and claimed a refund of ₹81,466/-. The case was selected for scrutiny through Computer Assisted Scrutiny Selection (in short 'CASS') to examine/verify the large increase in unsecured loans during the year, large increase in sundry creditors and mismatch of property etc. and statutory notices u/s 143(2) and 142(1) of the Act were issued to the assessee in response to which the assessee submitted details. The Assessing Officer (hereinafter referred to as Ld. 'AO') perused the details/documents submitted by the assessee and added a sum of ₹1,95,41,991/- to the returned income of the assessee and assessed the total income at ₹2,16,93,311/- u/s 143(3) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued several notices of hearing to the assessee but the assessee did I.T.A. No.: 1218/KOL/2025 Assessment Year: 2015-16 Sandeep Poddar. not comply with the notices. The Ld. CIT(A) perused the finding of the Ld. AO and the documents available on record and found that the impugned order of the Ld. AO did not call for any interference and the corresponding grounds were dismissed and accordingly, he dismissed the appeal of the assessee.
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival contentions were heard and the submissions made have been examined. The Ld. AR requested that the matter may be remanded to the Ld. AO as sundry creditors were added which need to be examined.
We find that the appeal had been decided ex parte, primarily on account of non-prosecution of the appeal on behalf of the assessee. In fact, the Ld. CIT(A) has noted in para 2 of the appeal order that not even an adjournment application was received by him till date in response to the notices issued. The addition was made on account of sundry creditors and the Ld. AR requested that another opportunity to file the required confirmations/evidences may be provided. 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). Since there was no proper compliance before both the Ld. AO as well as the Ld. CIT(A), in the interest of justice and fair play it was considered that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remand the I.T.A. No.: 1218/KOL/2025 Assessment Year: 2015-16 Sandeep Poddar. 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 it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his 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 28th October, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 28.10.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1218/KOL/2025 Assessment Year: 2015-16 Sandeep Poddar. Copy of the order forwarded to:
Sandeep Poddar, BF-289, Salt Lake City, Kolkata, West Bengal, 700064. 2. A.C.I.T., Circle-50(1), Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order