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Facts
The assessee's appeal was filed with a delay of 87 days, which was condoned by the Tribunal. The assessee had an unsecured loan of Rs. 2,00,000/- from M/s. Krishna Engineers, which was added as unexplained credit under Section 68 of the Income Tax Act by the Assessing Officer and confirmed by the CIT(A).
Held
The Tribunal condoned the delay in filing the appeal. Considering that the assessee was unrepresented before the CIT(A) and has now produced supporting documents like confirmation, bank statement, and ITR of the lender, the Tribunal restored the issue of the addition of Rs. 2,00,000/- back to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in confirming the addition of Rs. 2,00,000/- as unexplained credit without affording proper opportunity to the assessee and whether the delay in filing the appeal should be condoned.
Sections Cited
250, 143(3), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA
O R D E R The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), ADDL/JCIT(A)-12, Mumbai dated 23.02.2024 passed under Section 250(6) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) pertaining to Assessment Year (A.Y.) 2017-18.
The appeal was noted by the Registry to be delayed for filing by 87 days. The assessee has filed an application seeking condonation of delay before us. The explanation furnished by the partner of the assessee firm, Jagdishbhai Dhanjibhai Patel, on oath by way of an Affidavit, is to the effect that he was not technically proficient and therefore could not access any communication served on his email- id by the department ,including the CIT(A) order. That only when his accountant logged in on his portal only then he was made aware of the order passed by the CIT(A) and immediately
The Ld. D.R. vehemently opposed the condonation of delay. But on perusing the contents of the explanation furnished by the assessee by way of an Affidavit I am convinced that the delay cannot be attributable to complete laxity on the part of the assessee and there is sufficient cause for the delay. Even otherwise the assessee does not stand to benefit by not filing an appeal. In the interest of justice, therefore, I consider it fit to condone the delay of 87 days in the filing of the present appeal. The order was pronounced in open Court. Thereafter, the appeal was processed to be adjudicated with.
The grounds of appeal raised by the assessee are as under:
“1. The assessment order passed u/s 143(3) of Income Tax Act by the Assessing Officer and confirmed by the first appellate authority u/s 250 is bad in law and deserved to be uncalled for.
2. The assessing officer as well as first appellate authority has erred in law and on facts in making law confirming respectively the addition of Rs.2,00,000/- u/s 68 of the I.T. Act. The same deserves to be deleted.
3. The assessing officer as well as first appellate authority has erred in law and on facts in making and confirming respectively the addition by disallowing interest expense of Rs.8,49,769/-. The same deserves to be deleted.
4. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal
during the course of hearing.”
5. Before us, the assessee submitted in writing that the assessee would like to withdraw Ground No.
3. In view of the same, Ground No. 3 is dismissed as withdrawn.
6. The only effective ground remaining is Ground No.2, vis-à-vis the addition of Rs. 2,00,000/- made to the income of the assessee under Section 68 Istadev Projects vs. ITO Asst.Year –2017-18 - 3 - of the Act. The facts of the case being that in the Tax Audit Report furnished by the assessee in Form 3CD, the assessee had shown to have taken unsecured loan of Rs. 2,00,000/- from one M/s. Krishna Engineers. Since the genuineness of the impugned cash credit was not established by the assessee both before the Assessing Officer and also the CIT(A), the said amount was added as unexplained credit in terms of Section 68 of the Act and the said addition confirmed by the Ld.CIT(A).
7. Before the Ld. CIT(A) I have noted that there was no representation made on behalf of the assessee who confirmed the addition made by the AO on account of lack of documents substantiating the source of cash credit before him.
8. Before us, the Ld. Counsel for the assessee contended that the amount taken from M/s. Krishna Engineers was a genuine transaction and he had sufficient evidences to support his claim. Referring to the contents of the Paper Book produced before us he pointed out that he was in possession of confirmation by M/s. Krishna Engineers of having advanced the unsecured loan of Rs. 2,00,000/- duly supported with copy of bank statement of the said party showing relevant entries and also the copies of ITR of the Shri Maheshkumar Kanjibhai Patel the proprietor of Krishna Engineers. He, therefore, pleaded that since the assessee remained unrepresented before the CIT(A), if given a second chance the assessee would be able to substantiate it’s claim of the credit of Rs. 2,00,000/- received from M/s. Krishna Engineers being a genuine transaction. The Ld. Counsel for the assessee gave an undertaking not to abuse the trust reposed if given another chance to plead its case before the Ld.CIT(A).
10. I have considered the contention of both the parties. No doubt the Ld. CIT(A) passed an ex-parte order but noting the documents in the possession of the assessee now substantiating his claim of the unsecured loan of Rs. 2,00,000/- from Krishna Engineers being genuine supported by the confirmation of the said party, copies of ITR and also bank statement of the said party reflecting in the impugned transaction, I am of the view that interest of justice will be well-served if the assessee is granted another opportunity before the Ld. CIT(A). I, therefore, restore the addition of Rs. 2,00,000/- made by the AO under Section 68 of the Act back to the Ld. CIT(A) for adjudication afresh after providing due opportunity of hearing to the assesee.
In the result, the appeal of the assessee is partly allowed for statistical purposes.
This Order pronounced in Open Court on 23/04/2025