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Facts
The assessee filed its return, which was processed. The case was reopened under Section 147 based on information about accommodation entries. The Assessing Officer made additions and disallowances. The CIT(A) dismissed the assessee's appeal ex-parte without considering the merits.
Held
The Tribunal held that the CIT(A) erred in dismissing the appeal without deciding on merits. The appellate authority is duty-bound to provide a reasoned order. The case was restored to the CIT(A) for fresh adjudication on merits.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without adjudicating the grounds on merits, and whether the reassessment proceedings were valid.
Sections Cited
250, 147, 143(1), 148, 143(3), 43B, 40, 132
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
(Assessment Year: 2015-16) Anmol Medicare Limited, ACIT, Vs. 2nd Floor, NBCC House, Circle 1(1)(1), Ambawadi, Ahmedabad-38006 Ahmedabad [PAN : AAFCA 1055 R] (Appellant) .. (Respondent) Appellant by : Shri Divyang Shah, AR Respondent by: Shri Rajenkumar M. Vasavda, Sr DR Date of Hearing 12.08.2025 Date of Pronouncement 16.09.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
Delay Condoned.
This appeal has been filed by the Assessee against the order dated 31.10.2023 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“the CIT(A) in short), under Section 250 of the Income-tax Act, 1961 (“the Act”), relating to the Assessment Year 2015-16.
The assessee has raised the following grounds of appeal:
1. Under the facts and circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal for alleged non-compliance without considering the merits of the grounds raised, despite procedural compliance in filing the appeal.
2. Under the facts and circumstances of the case and in law, the learned Assessing Officer erred in reopening the assessment under Section 147, as the reasons recorded for reopening were legally unsustainable, based on incomplete or incorrect information.
3. Under the facts and circumstances of the case and in law, the learned Assessing Officer erred in making an addition of Rs.2,42,543/- under Section 68 on account of alleged accommodation entries without adequately substantiating the claim or providing an opportunity for rebuttal.
4. Under the facts and circumstances of the case and in law, the learned Assessing Officer erred in disallowing professional tax of Rs.94,481/- under Section 43B. despite the appellant's compliance with the provisions of the Act.
5. Under the facts and circumstances of the case and in law, the learned Assessing Officer erred in disallowing interest of Rs.51,587/- on late payment of TDS under Section 40, considering the same as not permissible under the provisions of the Act.
6. Under the facts and circumstances of the case and in law, the learned Assessing Officer erred in disallowing a loss of Rs.5,87,459/- on the sale of a car, which was a legitimate business expense.
7. Under the facts and circumstances of the case and in law, the reassessment proceedings and subsequent additions made by the learned Assessing Officer are bad in law and unsustainable, as they go beyond the scope of reasons recorded for reopening.
8. Under the facts and circumstances of the case and in law, the learned CIT(A) erred in not granting adequate opportunities to the appellant to present its case, resulting in a denial of natural justice.”
3. In this case, the assessee filed its return of income on 31.10.2015, declaring total income of Rs. 13,86,590/-, which was processed under section 143(1) of the Act. Subsequently, the case was reopened under section 147 based on information received from the DCIT, Central Circle 1(3), Ahmedabad, stating that the assessee had allegedly received accommodation entries from entities linked to Shri Mahendra Shantilal Patel, who was subjected to a search under section 132 of the Act. After issuing notice under section 148 and completing proceedings under section 143(3) r.w.s. 147, the Assessing Officer completed reassessment on 16.12.2019, determining the total income at Rs. 23,62,660/-, making the following additions/disallowances::- i. Disallowance u/s 43B of the Act - Rs. 97,481/- ii. Disallowance of interest on late - Rs. 51,587/- Payment of TDS iii. Disallowance of losses on sale of Car - Rs.5,87,459/- iv. Addition on account of accommodation - Rs.2,42,543/- Entry taken from group concern of MSP
4. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the CIT(A), who dismissed the appeal ex- parte on 31.10.2023, citing non-compliance by the assessee.
5. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
We have heard both the parties and perused the materials available on record. From the record, it is evident that the Ld. CIT(A) dismissed the appeal without adjudicating the issues raised by the assessee on merits. The Ld. CIT(A) dismissed the appeal of the assessee ex-parte, citing non-compliance, even though procedural compliances such as e-filing of appeal appear to have been made. The grounds raised by the assessee are substantial and pertain to jurisdictional validity of reopening, factual disallowances, and alleged denial of natural justice. In our considered view, the Ld. CIT(A) erred in dismissing the appeal without deciding the matter on merits. The appellate authority is duty- bound to dispose of the appeal by reasoned order, particularly when the appeal is duly filed and when issues relate to both facts and law. We, therefore, in the interest of justice, set aside the impugned order of the Ld. CIT(A) and restore the matter to the file of the Ld. CIT(A) to adjudicate the appeal afresh on merits, after granting a reasonable opportunity of being heard to the assessee. The assessee shall comply with notices issued by the Ld. CIT(A), without seeking unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.
The order is pronounced in the open Court on 16.09.2025