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Facts
The assessee, Bhagya Laxmi Gems and Jewellers Pvt. Ltd., filed its ITR for AY 2017-18. A survey u/Section 133A was conducted due to cash deposits during demonetization, and the case was selected for scrutiny. The Assessing Officer found discrepancies in cash, stock, and unexplained investments, and determined total income ex-parte as the assessee failed to respond to show cause notices. The CIT(A) subsequently dismissed the assessee's appeal for non-prosecution after the assessee failed to respond to multiple notices and provide documentary evidence.
Held
The Tribunal noted that the AO passed an order without considering the assessee's submissions and the CIT(A) dismissed the appeal for non-prosecution without deciding on merits. Therefore, the Tribunal set aside the CIT(A)'s order and restored the matter back to the CIT(A) for fresh adjudication, directing to provide the assessee a reasonable opportunity of hearing to present its case and evidence.
Key Issues
Whether the CIT(A) was justified in dismissing the assessee's appeal for non-prosecution without considering the merits, and if the assessee should be granted another opportunity to present its case and evidence.
Sections Cited
115JB, 133A, 143(2), 142(1), 143(3), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “A” BENCH: HYDERABAD
Before: SHRI MANJUNATHA G & SHRI RAVISH SOOD
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA.No.647/Hyd./2025 Assessment Year 2017-2018 Bhagya Laxmi Gems and Jewellers Pvt. Ltd., The ACIT, SECUNDERABAD. vs. Circle-1(2), PIN – 500 003. Hyderabad. PAN AAECB3009K (Appellant) (Respondent) For Assessee : CA, A. Srinivas For Revenue : MS. U Mini Chandran, CIT-DR Date of Hearing : 10.09.2025 Date of Pronouncement : 24.09.2025 ORDER PER MANJUNATHA G. :
The above appeal has been filed by the assessee against the Order dated 08.02.2025 of the learned CIT(A), Hyderabad-11, Hyderabad, relating to the assessment year 2017-2018.
Brief facts of the case are that, the assessee company, engaged in the business of Trading of Gems and 2 ITA.No.647/Hyd./2025 Jewels (Bullion), e-filed it’s return of income for the assessment year 2017-2018 on 03.11.2017, admitting total income of Rs.58,18,165/- under normal provisions and book profit of Rs.57,69,186/- under the provisions of Sec. 115JB of the Income Tax Act, 1961 [in short “the Act”]. A survey operation u/sec.133A of the Act was conducted in the case of the assessee on 01.03.20217 to verify the huge cash deposits made by the assessee company during the demonetization period. Further, The case of the assessee company was selected for scrutiny under CASS and notices u/secs.143(2) and 142(1) of the Act were issued and duly served on the assessee electronically. In response to the notices issued, the assessee company has furnished information electronically. After perusal of information filed by the assessee, during the course of assessment proceedings, the Assessing Officer noted that there are discrepancies in cash and stock amounting to Rs.1,91,918/- and Rs.17,00,000/- towards unexplained investment totaling to Rs.18,91,918/-; cash deposited during the demonetization period amounting to 3 ITA.No.647/Hyd./2025 Rs.6,45,00,000/- . Since the assessee has not responded to the show cause notice issued by the Assessing Officer during the course of assessment proceedings, the Assessing Officer determined the total income of the assessee at Rs.7,22,10,082/- vide order dated 28.12.2019 passed u/sec.143(3) of the Income Tax Act, 1961.
Aggrieved by the assessment order, the assessee preferred appeal before the learned CIT(A). Before the learned CIT(A), the learned CIT(A) has issued notices u/sec.250 of the Act on 13 occasions which are tabulated at page-5 of the appellate order. Since the assessee did not respond to the notices to substantiate it’s case with relevant documentary evidences, the learned CIT(A) dismissed the appeal of the assessee for non-prosecution by following the decision of Hon’ble Supreme Court in the case of CIT vs., BN Bhattacharjee & Anr. 10 CTR 354.
Aggrieved by the order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
4 ITA.No.647/Hyd./2025 5. CA, A. Srinivas, Learned Counsel for the Assessee submitted that, the assessee has furnished details before the Assessing Officer. However, the Assessing Officer without considering the submissions of the assessee, passed the ex-parte order and before the learned CIT(A), the assessee could not represent it’s case due to the circumstances beyond it’s control. He, therefore, pleaded that one more opportunity of hearing may please be provided to the assessee by remitting the issue back to the file of learned CIT(A) in the interest of justice.
MS U. Mini Chandran, learned CIT-DR for the Revenue, on the other hand, submitted that, before the Assessing Officer and learned CIT(A) the assessee did not file any documentary evidences to substantiate it’s case which shows the negligent attitude of the assessee in pursuing it’s case. Since, sufficient opportunities were provided by the learned CIT(A) which is evident from the order of the learned CIT(A), she submitted that, it is not a fit case for remitting the issue back to the file of learned CIT(A)
5 ITA.No.647/Hyd./2025 for afresh adjudication. She, therefore, submitted that, the order of the learned CIT(A) should be upheld.
We have heard both the parties, perused the material on record and the orders of the authorities below. We find that, the assessee has furnished information before the Assessing Officer, however, the Assessing Officer has passed assessment order without considering the submissions of the assessee which is evident from the assessment order. Further, before the learned CIT(A) the assessee could not represent it’s case despite providing various opportunities. However, the learned CIT(A) dismissed the appeal for non-prosecution, without deciding the appeal on merits. Since, the learned CIT(A) has disposed of the appeal filed by the assessee for non-prosecution, without considering the issue on merit, in our considered view, the issue needs to be set-aside to the file of learned CIT(A). Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of learned CIT(A) with a direction to decide the issues involved in the appeal of the assessee, in accordance with law, by providing reasonable
6 ITA.No.647/Hyd./2025 opportunity of hearing to the assessee. Needless to say, the assessee shall file relevant evidences as called for as and when the case is listed for hearing.
In the result, appeal of the Assessee allowed for statistical purposes.
Order pronounced in the open Court on 24.09.2025.