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Facts
The assessee's case was reopened under Section 147 based on information that Rs. 2.22 crores were credited to its account. The Assessing Officer made an addition of Rs. 2,22,00,000/- under Section 69A. The assessee's appeal before the CIT(A) was dismissed ex-parte due to absence.
Held
The Tribunal set aside the ex-parte order of the CIT(A) due to non-compliance with the principles of natural justice. The matter was remanded back to the CIT(A) to decide the appeal afresh after providing a reasonable opportunity of hearing to the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without granting a proper opportunity of hearing to the assessee, thereby violating principles of natural justice.
Sections Cited
147, 148, 142(1), 143(2), 69A, 151, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2014-15 Devtech M2M Limited, Vs. DCIT, Central Circle- 4th Floor, Sava House, Opp. 1(1), Pune. New Airport Road, Viman Nagar, Pune- 411014. PAN : AADCB4376Q Appellant Respondent Assessee by : Shri Kishor B. Phadke Revenue by : Shri Uodol Raj Singh Date of hearing : 13.11.2025 Date of pronouncement : 24.11.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 18.03.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2014-15.
The appellant has raised the following grounds of appeal :-
1. The learned CIT(A)-NFAC (hereinafter referred as CIT(A)) erred in law and on facts in upholding the assessment order passed by learned AO-NFAC (hereinafter referred to as Learned AO) thereby assessing the total income of the appellant at Rs.2,22,00,000 as against NIL returned income.
2. Learned CIT(A) ought to have granted an appropriate opportunity of being heard to the appellant for making requisite submission considering the principle of natural justice. The appellant intends to make all the requisite submissions along with related documentary evidence. However, the same could not be submitted since the notices have been inadvertently glossed over by the appellant due to unavoidable circumstances.
The learned AO and thereby, learned CIT(A) erred in law and on facts in assuming jurisdiction u/s 147 of ITA 1961 without application of mind & only on the basis of information received from the DDIT(Inv.), Unit-1, Pune through the Insight Portal. The learned IT authorities ought to have appreciated that, - Mr. Vinod Jadhav, a shareholder of company have not extended any loan in AY 2014-15, same is substantiated from submitted audited financials - The said loan of Rs. 2,22,00,000 was extended in AY 2015- 16, same is substantiated from submitted ledger of Mr. Vinod Jadhav in books of appellant. As such appellant contends that, the order passed u/s 147 is bad in law and ought to be quashed as notice u/s 148 is issued in mechanical manner from borrowed satisfaction.
Appellant contends that, learned AO in assuming jurisdiction u/s 147 of ITA, 1961 as necessary prior approval u/s 151 of ITA, 1961 is obtained in mechanical manner and thereby, order passed u/s 147 is bad in law and void-ab-initio.
5. The learned I-T Authorities erred in law and on facts in invoking section 69A on account of unsecured loans received from Mr. Vinod Jadhav amounting to Rs. 2,22,00,000 without considering appellant's explanation that, Mr. Jadhav provided said loan in A.Y.2015-16 out of explained sources of income.
6. The learned CIT(A), erred in law and on facts in upholding the unsecured loans received from shareholder of appellant company i.e. Mr. Vinod Jadhav amounting to Rs. 2,22,00,000 as unexplained due to alleged failure in submitting relevant documentary evidence. However, learned I-T Authorities failed to appreciate the fact that, appellant had duly submitted ITR and ledger of said lender to prove the identity, genuineness and creditworthiness of the said lender.
Appellant contends that, unsecured loan received is from the shareholder of the appellant company and the same loan has been extended & utilized for the purpose of business.
The Appellant craves leave to add to, alter, amend, or withdraw any of the foregoing grounds of appeal at or before the time of hearing, in the interests of substantial justice.”
3. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacturing of energy efficient lighting products. On the basis of information received From the DDIT, Investigation Unit that total amount of Rs.2.22 crores were credited in assessee’s account and it was also observed payments valuing Rs.83 crore for import of electronics items were sent to out of India, the case of the assessee company was reopened u/s 147 of the Act and notice u/s 148 and also u/s 142(1) and 143(2) were issued to the assessee. The assessee denied to have received any such payment during the period under consideration. The Assessing Officer not being satisfied with the reply of the assessee since copy of bank statement were not filed made the addition u/s 69A of the Act of Rs.2,22,00,000/- to the income of the assessee and vide order dated 26.03.2022 completed the assessment proceedings by determining total income at Rs.2,22,00,000/- as against no return shown by the assessee.
4. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the assessee remained absent, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee for want of prosecution without going into merits of the case.
It is the above order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is not justified. Ld. AR submitted before us that on one occasion the assessee sought for adjournment and the last notice unfortunately could not be seen by the assessee which resulted in impugned ex-parte order by Ld. CIT(A)/NFAC. Ld. AR submitted before the bench that the addition made by the Assessing Officer is not correct since no such transaction took place during the period under consideration as alleged by the Assessing Officer. However, Ld. AR only requested before the bench to provide one opportunity to appear before Ld. CIT(A)/NFAC so that the assessee can substantiate the grounds of appeal
raised before Ld. CIT(A)/NFAC.
7. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
8. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the case of the assessee was reopened u/s 147 of the Act and addition u/s 68 on the basis of alleged bank deposits were made to the income of the assessee. During the first appellate proceedings before Ld. CIT(A)/NFAC, the assessee admittedly asked for adjournment of hearing, however it was contended by the Counsel of the assessee that the last hearing notice could not be seen by the assessee which consequently resulted in passing of ex-parte order by Ld. CIT(A)/NFAC. It was the only request made by the Counsel of the assessee that if one opportunity provided to the assessee he is in a position to substantiate the grounds of appeal and also able to prove that the addition is not correct. Considering the totality of the facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the ex-parte order passed by Ld. CIT(A)/NFAC and remand the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued