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Facts
The assessee, an individual running a business, filed a return of income for AY 2015-16. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 based on information about bogus purchases and made an addition of Rs. 5,44,75,025/- as unexplained cash credit under Section 68. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal noted that the assessee was granted multiple opportunities for hearing by the CIT(A) but failed to provide submissions or documents. However, considering the assessee's plea for an opportunity to comply, the Tribunal remanded the matter to the CIT(A) for fresh adjudication, directing the assessee to provide all necessary documents.
Key Issues
Whether the CIT(A) erred in disposing of the appeal ex-parte without sufficient opportunity, and if the matter should be remanded for fresh adjudication to allow the assessee to provide evidence.
Sections Cited
250, 68, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 13.06.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2015-16. 2. The assessee has raised the following grounds of appeals:
1.1 The ex-parte order passed u/s.250 on 13.06.2025 for A.Y.2015-16 by NFAC.CIT(A), Delhi (for short CIT(A)], upholding the addition of Rs.5,44,75,025/- received from Shiv Shakti Industries as unexplained cash Asst. Year : 2015-16 - 2– credits u/s.68 of IT Act is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has erred in disposing of the appeal ex-parte on the ground of non-response to the notice of hearing, though there was sufficient cause for non-compliance to the said notices of hearing issued in appellate proceedings. 1.3 The Ld. CIT(A) ought to have allowed sufficient opportunity of hearing as well as passed a speaking and reasoned order after considering the material produced before AO. Thus, there was a gross violation of the principles of natural justice. 1.4 The Id. CIT(A) has failed to appreciate that after seeking adjournment of 30 days in response to notice u/s 250 dtd. 07.08.2024 vide request uploaded on 14.08.2024, the appellant had prepared written submissions with documents/evidence dtd. 21.08.2024 but the same could not be uploaded on account of the notice of hearing not forwarded to the tax consultant looking after the appellate work. 1.5 The Ld. CIT(A) has grievously erred in law and or on facts in not appreciating that the entire material/documents and statements etc., relating to M/s Shiv Shakti Industries solely relied upon for making the impugned addition was not provided to the appellant nor the AO had also not allowed any opportunity to cross examine the concerned parties, therefore, there is gross violation of principles of natural justice. 2.1 The Ld CIT(A) has erred in law and on facts in upholding the sum of RS. 5.44,75,025/- received from M/S Shivshakti Corporation as unexplained cash credit u/s 68 of the Act when admittedly the ingredients of cash credit were fully satisfied. 2.2 That in the facts & circumstances of the case the Ld CIT(A) ought not to have upheld the sum of RS. 5,44,75,025/-received from M/S Shivshakti Corporation as unexplained cash credit u/s 68 of the Act when admittedly the ingredients of cash credit were fully satisfied. 2.3 The observations made & conclusion reached by AO and confirmed by CIT(A) to hold the said sum of Rs. 5,44,75,025/- received from M/s Shivshakti Corporation as unexplained cash credit u/s 68 are not admitted by the appellant in so far as the same are against him. 2.4 Without prejudice to above and in the alternative the Id. CIT(A) ought not to have held the entire amount of Rs.5,44,75,025/- which showed in balance sheet of M/s Shiv Shakti Industries as taxable income instead of Asst. Year : 2015-16 - 3– restricting to the net profit there from after considering the computation of income furnished. Thus, the impugned addition is highly excessive and calls for Null.
It is therefore prayed that the addition of Rs.5,44,75,025/-confirmed by the AO should be deleted or in the alternative reduced.
The facts of the case are that assessee is an individual and deriving Income from Salary and also operates a proprietary business under the name M/s Vanvati Corporation. He has filed his Return of Income for the A.Y. 2015-16 on 25.09.2015 declaring Total Income of Rs. 2,22,000/-. As per information received from the findings of Directorate of Income Tax (Investigation) and Directorate of Intelligence & Criminal Investigation, the assessee has made bogus purchases during the year under consideration. Therefore, assessment proceedings u/s 147 were initiated after recording the reasons as prescribed u/s 147 and after taking prior approval of the competent authority. The AO vide Order dtd. 10.05.2023 made Addition u/s 68 on account of unexplained cash credit to the tune of Rs. 5,44,75,025/- thereby determining the total Income at Rs. 5,46,97,025/-.
Aggrieved against the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who dismissed the appeal of the assessee.
Being aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
On perusal of the record, we find that the assessee was granted four opportunities of hearing to furnish details, clarifications, and Asst. Year : 2015-16 - 4– explanations in order to substantiate the source of the cash deposits. However, despite issuance of several notices by the Ld. CIT(A), the assessee failed to file any written submissions or supporting documents. Consequently, the Ld. CIT(A), in absence of any compliance from the assessee, upheld the action of the Assessing Officer and dismissed the appeal of the assessee. Before us, Ld. Counsel for the assessee prayed that, given an opportunity, due compliances will be made and all the details/clarification/explanation would be provided to the revenue authorities to substantiate the source of cash deposits. Hence, in the interest of justice, the matter is remanded to the Ld. CIT(A) for de- novo adjudication. The assessee shall submit all the relevant bank statement/submission/document before the Ld. CIT(A) and comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.