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Facts
The assessee filed an appeal against the order of the CIT(A)/NFAC, which confirmed the addition of Rs. 93,46,041/- made by the Assessing Officer for disallowing a deduction claimed under Section 57 of the Income Tax Act, 1961. The assessee had claimed this deduction for loan expenses. The AO disallowed the claim due to lack of substantiating documentary evidence.
Held
The Tribunal noted that the assessee failed to make submissions before the CIT(A)/NFAC despite multiple opportunities, leading to the dismissal of the appeal for want of prosecution. The Tribunal restored the issue to the file of the CIT(A)/NFAC, granting one final opportunity to the assessee to present evidence.
Key Issues
Whether the CIT(A)/NFAC erred in dismissing the appeal for want of prosecution without allowing the assessee to substantiate the claim for deduction under Section 57, and if the deduction claim is valid based on evidence.
Sections Cited
57, 143(2), 142(1), 143(3), 143(3A), 143(3B), 270A(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
This appeal filed by the assessee is directed against the order dated 01.01.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2018-19.
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.93,46,041/- made by the Assessing Officer by disallowing the deduction claimed u/s 57 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 30.10.2018 declaring total income of Rs.89,40,630/-. The case was selected for limited scrutiny assessment under the E-assessment Scheme, 2019 on the following issues: “S.No. Issues i. Deductions from Income from Other Sources”
Accordingly statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the AR of the assessee filed the requisite details from time to time. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Act on 04.02.2021 by disallowing an amount of Rs.93,46,401/- claimed u/s 57 of the Act by observing as under: “5.3 It is clearly seen from the above, this confirmation is not signed by the any authorized signatory. The assessee has stated first, that he has availed loan of Rs.30000000/- from HDFC Ltd. This loan was given to the Vithhal Corporation LTD., thereafter the loan of Rs.3,00,00,000/- was took over by the PNB housing Finance Ltd during the FY 2017-18. The loan amount was increased to Rs 35000000/- by PNB Housing Finance Ltd during the FY 2017-18. The Increased amount i.e. Rs. 50,00,000/- was also given to the Vithhal Corporation Ltd during the FY2017-18. So, these all events should have been recorded in term of account in the copy of ledger given by the assessee. It can be easily seen that no such entries were found in the said ledger. No cheque number or any equivalent description was mentioned in the ledger account. It can be ascertained that amount of loan amount was routed through banking channel. The assessee was required to submit the copy of relevant part of statement of his bank account as well as Vithhal Corporation Ltd. highlighting the transaction in support of his claim. However, no bank accounts were submitted by the assessee. Thus, the assessee has completely failed to substantiate his claim even in evidences created afterthought. The assessee has also submitted the revised calculation of income in the later part of his submission. It indicated that the assessee has maintained his accounts haphazardly. No cautious and serious attitude was adopted at the time of the finalization of account. The assessee has also submitted that income received from Solapur Zilla Panshad was wrongly recorded in originally. Now it is revised. However no supporting evidence in this respect was submitted. The assessee plea cannot be accepted in absence of corroborated documentary evidences in support of the claim. 6. In view of the fact and above discussion, contention of the assessee cannot be accepted. The deduction of amount of Rs 93,46,401/- u/s 57 of the Act is not allowable in the case of the assessee hence disallowed and added to the total
income of the assessee. I am also satisfied that the assessee had underreported its total income and therefore it is a fit case for separate initiation of penalty proceedings u/s 270A(1) of the Act for under reporting its income. (Addition: Rs.93,46,401/-)”
Since the assessee did not make any submission before the Ld. CIT(A) / NFAC despite 3 opportunities granted, the Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution.
Aggrieved with such order of the Ld.CIT(A) / NFAC, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the outset submitted that due to certain unavoidable reasons the assessee could not make any submission before the Ld. CIT(A) / NFAC on the last date of hearing. He submitted that the assessee has a strong case in his favour and given an opportunity he is in a position to substantiate his case by filing the requisite details. He accordingly submitted that the matter may be restored to the file of the Ld. CIT(A) / NFAC for deciding the issue afresh after giving an opportunity to the assessee to substantiate his case.
The Ld. DR on the other hand strongly opposed the arguments advanced by the Ld. Counsel for the assessee.
We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. It is an admitted fact that out of 3 opportunities granted by the Ld. CIT(A) / NFAC the assessee sought adjournment on 2 occasions and on the last occasion he did not make any submission for which the Ld. CIT(A) / NFAC dismissed the appeal for want of prosecution. It is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate his case by filing the requisite details before the Ld. CIT(A) / NFAC. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details to his satisfaction and decide the issue as per fact and law. The assessee is also hereby directed to submit the details as called for by the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A) / NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 24th April, 2025.