URVASHIBEN SUNILBHAI AMIN,VADODARA vs. THE ITO, WARD-1(2)(2), VADODARA

This appeal by the assessee is directed against the order dated 04.07.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] for A.Y. 2015-16, arising from the assessment order passed under section 143(3) of the Income Tax Act,1961 [hereinafter referred to as “the Act”] on 24.11.2017.

During the course of hearing, the learned Departmental Representative raised no objection to condoning the delay. Considering the submissions, the affidavit placed on record, absence of mala fides, and in the interest of substantial justice, we are satisfied that the assessee was prevented by reasonable cause from filing the appeal within limitation. Accordingly, the delay of 611 days is condoned, and the appeal is admitted for adjudication.

Notices under sections 143(2) and 142(1) were issued, pursuant to which the assessee submitted ITR, Form 26AS, audit report in Forms 3CB and 3CD, profit and loss account, balance sheet, capital account, and bank statements. During assessment, the Assessing Officer issued notice dated 13.06.2017 requiring the assessee to furnish complete details of additions to the capital account along with supporting evidence and capital accounts for FYs 2013-14 and 2014-15. The assessee submitted that no capital was introduced during F.Y. 2014-15 but did not furnish the capital account statement. The AO downloaded ITRs for A.Ys. 2013-14, 2014-15 and 2015-16, and noted the following:

As against this, the capital disclosed in ITR-4 for A.Y. 2015-16 was Rs. 1,24,15,536/-. The AO therefore treated the difference of Rs. 70,48,949/- as unexplained cash credits under section 68 and added it to the total income. Total income was assessed at Rs. 75,39,490/-Penalty proceedings under section 271(1)(c) were also initiated.

The assessee filed appeal before CIT(A) and raised grounds challenging the addition and initiation of penalty. Notices dated 12.05.2023 and 08.06.2023 were issued directing the assessee to upload balance sheets, capital accounts, explanation for non-furnishing before Urvashiben Sunilbhai Amin vs. ITO Asst.Year –2015-16 - 5– AO, and complete ITRs for A.Ys. 2013-14 to 2016-17. The assessee sought adjournment but did not file any documents or explanation thereafter.

The CIT(A) observed absence of compliance, held that the assessee failed to substantiate the source of capital increase, and concluded that the AO’s action could not be faulted. Relying on judicial principles regarding appellate restraint, the CIT(A) upheld the addition of Rs. 70,48,949/- and dismissed the appeal.

Aggrieved by the order of CIT(A), the assessee is in appeal before us raising following grounds:

The CIT (A) incorrectly confirmed the addition of Rs. 70,48,949/- made by the Assessing Officer (AO) from the appellant’s capital contribution, without considering the fact that the appellant’s books of accounts were audited by certified Chartered Accountants, and there was no material to support the addition.

Your Appellant craves the right to add to or alter, amend, substitute, delete or modify all or any of the above grounds of appeal

We have carefully considered the rival submissions, perused the assessment order, order of the CIT(A), materials placed on record, and the affidavit explaining delay and lack of earlier compliance.

It is undisputed that the addition was made solely on the basis of absence of supporting evidence regarding the increase in capital. It is also evident from the appellate record that despite issuance of multiple notices, the assessee did not submit any documentary evidence before the CIT(A). Therefore, the CIT(A) had no material before him to evaluate the merits and was constrained to uphold the AO’s findings.

At the same time, the assessee has now expressed willingness to furnish complete evidences and has sought one final opportunity. The learned DR has not objected to such request. Considering the magnitude of addition, the requirement of proper verification, and in order to advance substantial justice, we deem it appropriate to restore the matter to the file of the CIT(A) for decision afresh after examining all relevant material.

However, keeping in view the delay and earlier non-compliance, such restoration deserves to be accompanied by reasonable conditions.

This restoration is subject to the assessee depositing a cost of Rs. 10,000/- to the credit of the Prime Minister’s Relief Fund within 30 days from the date of receipt of this order and furnishing proof of such payment before the CIT(A).

The assessee shall cooperate fully and shall not seek unwarranted adjournments. The CIT(A) shall examine all evidences and submissions and pass a speaking order without being influenced by earlier orders.

In the result, the appeal is allowed for statistical purposes in the above terms. This Order pronounced in Open Court on 27/11/2025