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Facts
The assessee, a partnership firm engaged in constructing residential apartments, filed its return of income declaring NIL income. The case was selected for scrutiny, and the Assessing Officer issued notices. However, the assessee failed to respond, leading to an ex-parte assessment order. The CIT(A) also dismissed the appeal ex-parte. The assessee's delay in responding was attributed to a partner's severe hip and backbone injury.
Held
The Tribunal held that the CIT(A) wrongly dismissed the appeal ex-parte, especially considering the medical reasons provided by the assessee for the delay. The Tribunal set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for fresh adjudication after verifying the evidence filed by the assessee, providing a reasonable opportunity of hearing.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without considering the medical reasons for the assessee's non-compliance, and whether the matter should be remanded for fresh adjudication.
Sections Cited
250, 144, 250(6), 68, 139(1), 143(2), 142(1), 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
Year 2022-2023 GBR Homes LLP, Bhupalpally Jayashankar The Income Tax Officer, vs. WARANGAL – 506 169. Hanamkonda, WARANGAL – 506 001. Telangana. PAN AAWFG4630Q (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: CA Hemalatha K राज� व �ारा/Revenue by:: Dr. Narendra Kumar Naik, CIT-DR सुनवाई की तारीख/Date of hearing: 09.10.2025 घोषणा की तारीख/Pronouncement: 15.10.2025 आदेश/ORDER
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the assessee is directed against the Order dated 15.05.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2022-2023.
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The assessee has raised the following grounds :
1. “That under the facts and circumstances of the case, the orders passed by the Commissioner of Income-tax (Appeals) (in short 'CIT(A)') u/s. 250 of IT Act dated 15/05/2025, confirming the order passed by Assessing Officer ('AO') u/s. 144 of the IT Act dt.05/03/2024, is not in accordance with the fact and provisions of law.
2. The Learned CIT(A) ought not to have dismissed the appeal filed by the appellant, ex-parte, in view of the provisions of section 250(6) of the IT Act.
Without prejudice to the above grounds 3. The Learned CIT(A) by virtue of order passed u/s.250 of the IT Act erred in Indirectly confirming the addition made by Ld. Assessing Officer by estimating business income at Rs.5,80,114/- on an amount of Rs.72,51,430/- which was reported in Form 26AS on which 1940 was deducted by the vendor Mr. JALLA MANI MALLA, treating the same as alleged sales of assessee, whereas in reality this amount pertains to Purchase of Iron & Steel from M/s Padmalaya Enterprises proprietary of Mr. JALLA MANI MALLA.
4. The Learned CIT(A) by virtue of order passed u/s.250 of the IT Act erred in indirectly confirming the addition made by Ld. Assessing Officer by treating the purchases reported in Form 26AS amounting to Rs.3,12,63,307/- as unaccounted purchases of assessee, whereas assessee has accounted for the said purchases as Work-in-progress clubbed under 'Other current assets' of Rs.12,56,16,933/- of the Schedule Part A Balance sheet in ITR Form (refer pg 8 of ITR Form).
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5. The Learned CIT(A) by virtue of order passed u/s.250 of the IT Act erred in indirectly confirming the addition made by Ld. Assessing Officer by treating the unsecured loan declared in ITR under schedule Part A Balance Sheet amounting to Rs.6,16,64,247/- as unexplained credits u/s 68 of the IT Act.
The Learned CIT(A) by virtue of order passed u/s.250 of the IT Act erred in indirectly confirming the addition made by Ld. Assessing Officer by treating the sundry creditors declared in ITR under schedule Part A Balance Sheet amounting to Rs.98,50,131/- as unexplained credits u/s 68 of the IT Act.
7. The Learned CIT(A) by virtue of order passed u/s.250 of the IT Act erred in indirectly confirming the action of Ld. Assessing Officer in not allowing the current year business loss of Rs.6,73,525/- claimed by the assessee while filing its return u/s 139(1) of the IT Act, in respect of which no reason was stated by the Ld. Assessing officer for such denial.
For these and such other grounds, that may be urged at the time of hearing of subject appeal, the appellant prays that the orders of the Learned CIT(Appeals) u/s 250 of the Act are to be set aside and the appeal may please be sent back to the file of Ld. Assessing Officer or to the file of Ld. Commissioner of Income-tax (Appeals) for fresh adjudication, or provide such other relief as the Hon'ble Tribunal may deem fit.”
At the time of hearing, the learned AR of the Assessee has submitted that the learned CIT(A) has passed the impugned order ex-parte despite the fact that in response to the notice issued by the learned CIT(A), the 4 ITA.No.1061/Hyd./2025 assessee has requested some more time to collect and furnish the relevant record, details as well as submissions. She has referred to the details of the notices issued by the learned CIT(A) and response of the assessee and submitted that the last notice was issued by the learned CIT(A) on 05.05.2025. In response to the said notice, the assessee filed it’s reply on 13.05.2025 seeking one month time for furnishing relevant details and record as well as submissions. However, the learned CIT(A) has declined to grant further time and passed the impugned order ex-parte. Learned AR has now referred to the relevant details and record filed in the paper book running into 847 pages and submitted that the assessee was collecting relevant details and records which is now filed for verification and examination and, therefore, the matter may be remanded to the record of the Assessing Officer for verification and examination of the relevant record.
On the other hand, the Learned DR for the Revenue has fairly submitted that since the assessment order as well as the Order of the learned CIT(A) are passed
5 ITA.No.1061/Hyd./2025 ex-parte, therefore, the matter may be remanded to the record of the Assessing Officer to verify and examine the evidences now filed by the assessee.
We have considered the rival submissions as well as the relevant material on record. The assessee is a partnership firm and engaged in the business of construction of residential apartments. The assessee filed it’s return of income for the year under consideration on 31.12.2022 declaring total income at Rs.NIL. The case of the assessee was selected for scrutiny through CASS to examine the disclosure of low income. The Assessing Officer issued notices u/sec.143(2) and 142(1) of the Act. However, there were no response on behalf of the assessee. Consequently, the Assessing Officer has passed an ex-parte assessment order u/sec.144 r.w.s.144B of the Income Tax Act, 1961 and thereby, the Assessing Officer has made various additions and assessed the total income of the assessee at Rs.10,33,57,800/-.
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6. The assessee challenged the action of the Assessing Officer before the learned CIT(A). However, the appeal of the assessee was dismissed while passing the impugned order ex-parte. It is pertinent to note that, though the assessee has sought further time for submitting relevant record and submissions, but, the learned CIT(A) has passed the impugned order declining the grant of further time to the assessee. The assessee explained the reasons for delay in filing the appeal before the learned CIT(A) due to the hip and backbone injury sustained by the partner of the assessee’s firm as a result of fall in the bath-room. Thus, the assessee was suffering from severe injuries and was undergoing medical treatments including hospitalization. The assessee has filed copy of medical certificate. Accordingly, in the facts and circumstances of the case, we find that due to the health issues and severe injuries of the partner of the assessee firm, the assessee could not represented it’s case before the authorities below properly. Hence, in the interest of justice, we grant one more opportunity to the assessee to present the case and to file
7 ITA.No.1061/Hyd./2025 relevant record before the Assessing Officer for verification and examination. Hence, the impugned order of the learned CIT(A) is set-aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after verification and examination of the relevant record filed by the assessee. Needless to say, before passing fresh order, the Assessing Officer is directed to provide reasonable opportunity of hearing to the assessee.
In the result, appeal of the Assessee is allowed for statistical purposes.