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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: AND MAKARAND V.MAHADEOKAR
आदेश आदेश/O R D E R आदेश आदेश
PER MAKARAND V.MAHADEOKAR, AM: These two appeals by the assessee are directed against the separate orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)], both dated 29.10.2024 for A.Y. 2014–15 and 21.11.2024 for A.Y. 2016–17, arising out of the ex-parte assessment orders dated 28.03.2022 passed by the Additional / Joint / Deputy / Assistant Commissioner of Income Tax/ Income-tax Officer, National Faceless Assessment Centre, Delhi [hereinafter referred to as “Assessing Officer or AO”], under section 147 read with section 144 and section 144B of the Income Tax Act, 1961 [hereinafter referred to as “the Act”]. Since common issues are involved, both appeals were heard together and are being disposed of by this consolidated order for the sake of convenience.
Condonation of Delay 2.1 At the outset, it was noted by the Registry that the appeals filed by the assessee were delayed by 177 days for A.Y. 2014-15 and 146 days for A.Y. 2016-17 beyond the prescribed period of limitation under section 253(3) of the Act. The assessee filed a petition for condonation of delay accompanied by a duly sworn affidavit dated 13.10.2025 explaining the reasons for such delay.
2.2 In the said affidavit, the assessee, Smt. Sneha Pawan Agarwal, stated that she had preferred appeals before the learned CIT(A) against the reassessment orders dated 28.03.2022 for both assessment years, which were disposed of ex parte under section 250 of the Act. It was explained that during the relevant period, the assessee had changed her e-mail address from safalamdavad@yahoo.com (used in Form 35) to safalfinstock@yahoo.com but the same could not be updated on the Income- tax Portal due to technical constraints. Consequently, all electronic notices and orders from the office of the CIT(A), NFAC, continued to be delivered to the old and inactive e-mail address, about which the assessee and her consultant remained unaware. The assessee further affirmed that she became aware of the CIT(A)’s orders only in June 2025, during a routine review at her tax consultant’s office. Thereafter, she immediately initiated the process of filing the present appeals before the Tribunal on 26.06.2025 for both years. The delay was thus stated to have occurred due to a bona fide and inadvertent technical lapse in updating the communication address, without any mala-fide intention or deliberate negligence. She prayed that, in the interest of justice, the delay be condoned and the appeals be heard on merits.
2.3 The learned Departmental Representative (DR) raised no objection to the condonation of delay, considering the explanation furnished in the affidavit as genuine and reasonable.
2.4 Having considered the contents of the affidavit and the submissions of both parties, we find that the cause shown by the assessee constitutes sufficient and reasonable cause within the meaning of section 253(5) of the Act. The delay in filing the appeals is attributable to an inadvertent technical lapse in e-mail communication, and the assessee acted promptly upon becoming aware of the CIT(A)’s orders. In view of the settled legal position that “when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred” as laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji (167 ITR 471), the delay in filing these appeals is hereby condoned. The appeals are thus admitted for adjudication on merits.
Facts of the Case 3.1 The assessee, an individual engaged in the business of textile trading and finance under the proprietary concern M/s Ayush Finance and Investment Company, had filed her regular returns of income for both years under consideration. Subsequently, both assessments were reopened under section 147 on the basis of information received from the Investigation Wing, Ahmedabad, which had conducted search and verification in the cases of the Tibrewal (entry operator) group and unearthed large-scale accommodation entries in the names of various shell entities.
3.2 In both years, the Assessing Officer recorded reasons to believe that income chargeable to tax had escaped assessment due to transactions with paper/shell entities. Notices under section 148 were accordingly issued. The assessee did not file any return of income in response to the notices under section 148, and assessments were consequently framed ex parte under section 147 r.w.s. 144 of the Act after issuance of show cause notice. During the course of the proceedings, the assessee furnished only limited details at the fag end of the assessment process.
3.3 The summarised details of the assessment orders are tabulated below:
Particulars A.Y. 2014–15 A.Y. 2016–17 Original Filed on 14.10.2014; income Filed on 04.10.2016; return u/s Rs. 13,38,260/- income Rs. 11,20,540/- 139(1) Notice u/s 30.03.2021 31.03.2021 148 (issue date) Basis of Alleged accommodation Alleged accommodation addition as entries identified via entry via Shakti per AO Investigation Wing, including Creations (Rs. entities such as Radhe 76,99,499/-) and share Corporation, Shambhu Tex transaction in Kushal Fab, and Shankar Ltd. (Rs. 6,46,535/-) Corporation (aggregate Rs. 52,48,056/-) Section Section 69A, taxed under Section 69A (both invoked for section 115BBE items), taxed under addition section 115BBE Quantum of Rs. 52,48,056/- Rs. 76,99,499/- + Rs. addition 6,46,535/- = Rs. 83,46,034/- Date and 28.03.2022; 147 r.w.s. 144 28.03.2022; 147 r.w.s. section of read with 144B 144 read with 144B assessment order Assessed Rs. 65,86,316/- Rs. 94,66,574/- income (as computed by AO)
3.4 For both years, the appeals were filed against the reassessment orders passed. The CIT(A) issued several notices to the assessee through the ITBA portal. However, there was no effective compliance to these notices. The assessee did not appear or file any submissions on merits despite opportunities provided.
3.5 The CIT(A) therefore proceeded ex parte and decided both appeals on the basis of material available on record and findings recorded by the Assessing Officer. The CIT(A) noted that despite repeated notices, the assessee failed to produce any explanation, documents, or evidences to substantiate that the impugned transactions were genuine or that the amounts added under section 69A were properly reflected in her regular accounts. The CIT(A) found that the Assessing Officer had made detailed verification relying on the Investigation Wing reports and that the assessee failed to rebut the findings or establish the genuineness of the impugned transactions. Consequently, the CIT(A) confirmed the additions made under section 69A for both years and dismissed the appeals.
3.6 Aggrieved by the orders of the CIT(A), the assessee is in appeal before us raising following grounds of appeal:
A.Y. 2014–15 1. This is in reference to the order passed u/s 250 by CIT(A), wherein the learned CIT has passed on the ground that assessee fails to appear before CIT(A) while hearing so CIT(A) dismissed the appeal. The appellant was absence in hearing as he does not receive any communication just because of he uses different E-mail ID for communication and fails to get change E- mail ID on Income Tax Portal. I sincerely apologize for any inconvenience my absence may have caused to the proceedings. I assure you that I will make every effort to attend future hearings.
2. The Assessing officer has made addition of Rs.52,48,056/- as per section 69A: the Ld. AO has erred in law and on facts in considering the repayment of unsecured loans received as bogus loan of Rs.52,48,056/- is unexplained money of the assessee, which is added to the income of the assessee u/s 69A of the act, 1961 and same needs to be deleted.
3. Reopening under section 147 is bad in law and void ab initio: The learned CIT(A) erred in confirming the reopening of assessment under section 147 of the Act, which was based solely on third-party information without any independent application of mind OR tangible material establishing escapement of income on part of the assessee. The reopening is therefore invalid and liable to be quashed.
4. The learned CIT(A) erred in confirming the initiation of penalty proceedings under sections 271(1)(b) and 271(1)(c) of the Act despite there being no conscious OR deliberate default by the assessee. The non-compliance was due to genuine non-receipt of communications, not due to any intent to conceal income OR furnish inaccurate particulars.
5. Section 234B: The Ld. AO has erred in law and on facts in initiated interest proceedings u/s 234B despite the fact that the amount added to the total income of the assessee is bad in law and proposing on interest on same is also and same need to be deleted.
6. Charging of Tax u/s 115BBE of the Income Tax Act 1961: The Addition made are bad in law and changing of tax on same is charged wrong and same needs to be deleted.
7. Rule 46A Additional Evidences: The assessee requests your good-self to allow production and submission of additional evidences during the course of appellate proceedings which, for the one reason OR the other, the assessee is not able to produce/submit during the course of assessment proceedings.
Modification to the Ground of Appeal: The assessee reserves his right to add, DLEETE, edit, manipulate, modify, rectify OR otherwise change any of the grounds of appeal during the course of appellate proceedings.
2025 - A.Y. 2016–17 1. This is in reference to the order passed u/s 250 by CIT(A), wherein the learned CIT has passed on the ground that assessee fails to appear before CIT(A) while hearing so CIT(A) dismissed the appeal. The appellant was absence in hearing as he does not receive any communication just because of he uses different E-mail ID for communication and fails to get change E- mail ID on Income Tax Portal. I sincerely apologize for any inconvenience my absence may have caused to the proceedings. I assure you that I will make every effort to attend future hearings.
2. The Ld. Commissioner of Income Tax (Appeals) and the Assessing Officer erred in law and on facts in making an addition of Rs.76,99,499/- under section 69A of the Income Tax Act, 1961, treating the same as unexplained money, without appreciating the documentary evidences and explanations provided by the assessee.
3. That the Ld. AO further erred in law and on facts in treating the loss of Rs.6,46,535/- from the sale of shares of Kushal Ltd. as bogus and unexplained investment u/s 69A and taxing it under section 115BBE. The addition is based on assumptions and not supported by any direct evidence linking the appellant to any manipulative activity in Kushal Ltd shares. The transaction was genuine, duly reflected in the books of accounts, and the adverse inference drawn is arbitrary and bad in law.
4. The learned CIT(A) erred in confirming the initiation of penalty proceedings under sections 271(1)(b) and 271(1)(c) of the Act despite there being no conscious OR deliberate default by the assessee. The non-compliance was due to genuine non-receipt of communications, not due to any intent to conceal income OR furnish inaccurate particulars.
5. Section 234A, 234B, 234C: The Ld. AO has erred in law and on facts in initiated interest proceedings u/s 234A, 234B, 234C despite the fact that the amount added to the total income of the assessee is bad in law and proposing on interest on same is also and same need to be deleted.
6. Charging of Tax u/s 115BBE of the Income Tax Act 1961: The Addition made are bad in law and changing of tax on same is charged wrong and same needs to be deleted.
Rule 46A Additional Evidences: The assessee requests your good-self to allow production and submission of additional evidences during the course of appellate proceedings which, for the one reason OR the other, the assessee is not able to produce/submit during the course of assessment proceedings. and 1369/Ahd/2025 7 8. Modification to the Ground of Appeal: The assessee reserves his right to add, DLEETE, edit, manipulate, modify, rectify OR otherwise change any of the grounds of appeal during the course of appellate proceedings.
During the hearing before us, the Authorised Representative (AR) of the assessee appeared and submitted that the assessments for both A.Ys. 2014–15 and 2016–17 had been completed ex parte without affording effective opportunity. It was submitted that all notices were issued through the electronic portal, but the assessee could not respond due to lack of knowledge and change of address. The AR stated that the assessee has since traced the relevant documents and records. However, these evidences were not filed before the lower authorities. The AR accordingly did not file any additional evidence before us at this stage but undertook to furnish the same before the Assessing Officer in the course of remand proceedings, if the matters were restored for verification on merits.
4.1 It was therefore pleaded that, in the interest of justice, the issues may be restored to the file of the Assessing Officer for fresh adjudication after affording a reasonable opportunity of hearing.
The Departmental Representative did not raise any serious objection to this plea.
We have carefully considered the rival submissions and examined the material placed on record. It is evident that the Assessing Officer, in both the assessment years under appeal, has passed a reasoned and speaking order after recording satisfaction on the basis of material gathered during the reassessment proceedings. The record clearly demonstrates that ample opportunities were afforded to the assessee through issue of statutory notices under sections 148 and 142(1) of the Act; however, there was no effective compliance on her part. The assessee furnished her reply only at the fag end of the time-barring period, leaving the Assessing Officer with little time to verify the details or conduct any further enquiry. Consequently, the Assessing Officer was constrained to complete the assessments on the basis of material available on record.
6.1 However, keeping in view the fact that the assessee has now undertaken to furnish all relevant evidences before the lower authorities, and in order to afford one more opportunity of effective hearing, we deem it appropriate, in the interest of justice and fair play, to restore the matters to the file of the learned Commissioner (Appeals) for fresh adjudication on merits. The CIT(A) shall decide the issues afresh after considering the evidences to be furnished by the assessee and after providing reasonable opportunity of being heard.
6.2 We make it clear that the assessee shall extend full cooperation in the proceedings before the learned CIT(A), failing which the appeal may be decided on the basis of material available on record.
7. Accordingly, the impugned orders of the learned CIT(A) are set aside, and the appeals are allowed for statistical purposes.
Order pronounced in the Court on 16TH October, 2025 at Ahmedabad.