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Facts
Multiple assessees filed appeals against ex-parte orders of the Ld. CIT(A) for various assessment years, where their cases were dismissed for non-prosecution. The assessees contended that their non-prosecution was not deliberate but resulted from a conflict with their counsel. They raised issues including violation of natural justice, improper initiation of proceedings under Section 153C, and an addition made under Section 69.
Held
The Tribunal observed that the Ld. CIT(A) had dismissed the appeals without adjudicating them on merits. Considering the assessee's explanation regarding the conflict with counsel and upholding principles of natural justice, the Tribunal set aside the CIT(A)'s orders and remanded all appeals for fresh adjudication on merits, ensuring proper opportunity of hearing.
Key Issues
Whether the Ld. CIT(A) was justified in dismissing appeals ex-parte for non-prosecution; whether principles of natural justice were violated regarding notice and cross-examination; validity of proceedings initiated under Section 153C without proper satisfaction; and the validity of additions made under Section 69 based on third-party evidence.
Sections Cited
153C, 69, 282, Rule 127
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: Shri Vijay Pal Rao & Shri Madhusudan Sawdia
आदेश / ORDER PER BENCH : These appeals filed by the assessees are directed against the separate orders dated 11.10.2024, 23.12.2024 and 24.12.2024 of Commissioner of Income Tax (Appeals)-12, Hyderabad [“Ld.CIT(A)”] for the assessment year 2017-18, 2018- 19, 2019-20 and 2020-21. Since the grounds raised in all these appeals are identical in nature, these appeals are clubbed, heard together and a consolidated order is being passed as under, taking facts from as lead appeal.
The assessee has raised the following grounds of appeal : 1) On the facts and in the circumstances of the case, the order of the Ld.CIT(A) is erroneous and unsustainable in law apart from being passed in violation of principles of natural justice. The Ld.CIT(A) failed to appreciate that proper notices were not served on the appellant as required under section 282 of the Act r.w.rule 127 of the Rules, and therefore Appellant could not put forth his case. 2) Without prejudice to the above, the Ld.CIT(A) erred in upholding the action of the AO, wherein the AO ha snot recorded proper satisfaction before initiating proceedings u/s 153C of the Act. 3) Without prejudice to the above, the Ld.CIT(A) erred in sustaining the addition made by the AO of Rs.1,00,000 as unexplained investment u/s 69 of the Act. The Ld.CIT(A) failed to appreciate that the pen drive was seized from third person premises -105/Hyd/2025, 99&100/Hyd/2025 Leela Ram Choudhary and Others i.e.employee of Rubberwala group and not from the premise of Rubberwala and hence such pen drive does not have any evidentiary value.
The Ld.CIT(A) failed to appreciate that the AO has not brought any other document which prove that the Appellant paid cash towards purchase, apart from excel sheet and oath statement of Mr.Ansari which does not have any evidentiary value and is a dumb document.
5. The Ld.CIT(A) failed to appreciate that the AO has not provided any opportunity of cross examination in respect of the statement made by M/s Rubberwala housing and infrastructure limited accepting the payment of cash.
At the outset, it is seen that there is a delay of 25 days in filing the appeal before the Tribunal in – 105/Hyd/2025. The assessee has filed condonation petition in all these cases with an affidavit, explaining the reasons for such delay. After going though the reasoning stated in the affidavit and after hearing the Ld.DR, the delay in filing the appeals is condoned.
ITA No.103/Hyd/2025 for the A.Y.2017-18:
4. The Ld.AR submitted that, the assessee had filed appeal before the Ld.CIT(A) against the order of the learned Assessing Officer (“Ld.AO”) passed u/s 153C of the Income Tax Act, 1961 (“the Act”). However, the Ld.CIT(A) has dismissed the appeal of the assessee, while passing the ex-parte order on the ground -105/Hyd/2025, 99&100/Hyd/2025 Leela Ram Choudhary and Others that the assessee has not complied with the notices issued by the Ld.CIT(A). He has also submitted that, the Ld.CIT(A) has not adjudicated the appeal of the assessee on merits, but the same was dismissed for non-prosecution. He has further submitted that the reason for non-prosecution of the appeal was not deliberate, but, due to conflict of the assessee with the counsel. Hence, he has pleaded that the impugned order of the Ld.CIT(A) may be set aside and the matter may be remanded to the record of the Ld.CIT(A) for fresh adjudication on merits after giving appropriate opportunity of hearing to the assessee.
On the other hand, the Ld.DR has raised objection, submitting that the assessee was given sufficient opportunities but the assessee could not avail the same. He, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeals filed by the assessee.
We have considered the rival submissions and carefully perused the impugned order of the Ld.CIT(A). The Ld.CIT(A) has dismissed the appeal of the assessee for non-prosecution /non- compliance on the part of the assessee and therefore, the appeal of the assessee was not decided on merits. The Ld.AR has submitted that the reason for non-prosecution of the appeal was not deliberate, but, due to conflict of the assessee with the counsel. Accordingly, in the facts and circumstances of the case and keeping in view the principles of natural justice, we set aside the order of the Ld.CIT(A) and the matter is remanded to -105/Hyd/2025, 99&100/Hyd/2025 Leela Ram Choudhary and Others the record of the Ld.CIT(A) for fresh adjudication on merits after giving appropriate opportunity of hearing to the assessee.
In the result, appeal of the assessee in for the A.Y.2017-18 is allowed for statistical purpose.
,100,104 & 105/Hyd/2025 :
Since the issues involved in the all these appeals are identical with the issue involved in our discussion and findings given in shall mutatis mutandis apply to these appeals as well. Accordingly, these appeals are allowed for statistical purpose.
To sum up, all the appeals filed by the assessees are allowed for statistical purpose.
Order pronounced in the Open Court on conclusion of hearing on 2nd May, 2025.