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Facts
A search operation under Section 132 was conducted, leading to Section 153A notices and significant additions by the AO for unexplained credits (Section 68), disallowance of interest, recharacterization of income, and disallowed business losses. The assessee challenged the validity of these proceedings and the additions, but the CIT(A) upheld the assessments and their procedural validity.
Held
The Income Tax Appellate Tribunal observed a consistent pattern of non-appearance by the assessee despite multiple notices and opportunities over a decade. Citing the principle that law aids the vigilant, the Tribunal dismissed the appeal for non-prosecution due to the assessee's lack of diligence and continued absence.
Key Issues
Validity of assessments framed under Section 153A; confirmation of additions under Section 68 for unexplained credits; and dismissal of the appeal for non-prosecution due to the assessee's non-appearance.
Sections Cited
132, 153A, 143(3), 68, 139
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िनधा"रती की ओर से/Assessee by : None राज" की ओर से/ Revenue by : Shri Manav Bansal, CIT, DR सुनवाई की तारीख/Date of Hearing : 18/12/2025 उदघोषणा की तारीख/Date of Pronouncement : 30.12.2025 आदेश/Order PER KRINWANT SAHAY, A.M: This is an appeal filed by the Assessee against the order of the Ld. Pr. CIT(OSD), Gurgaon dt. 18/02/2015. 2. In the present appeal Assessee has raised the following grounds:
1.1 That within the facts and circumstances of the case and the law on the point the learned Principal Commissioner of Income tax (OSD), Gurgaon, Haryana, with charge of CIT (Appeals) - 3, Gurgaon, Haryana, (learned CIT(A)) has erred in confirming the order passed by the learned Deputy Commissioner of Income tax, Central Circle - 1, Chandigarh (learned DCIT) under section 153A(1)(b) r.w.s. 143(3) of the Income tax Act, 1961 (Act) for assessment year 2009-2010, which order has been passed without jurisdiction, is bad in law and deserves to be set aside.
1.2 That within the facts and circumstances of the case and the law on the point the learned CIT(A) has erred in rejecting the contention of the Appellant that the order passed by the learned AO under section 153A(1)(b) r.w.s. 143(3) of the Act is bad and liable to be quashed as the same has been framed without search and seizure carried out on the Appellant which itself was unlawful and invalid in law.
That within the facts and circumstances of the case and law on the point the learned CIT(A) has erred in confirming following additions in respect of an aggregate amount of Rs. 6,02,00,000.00 out of a total amount of Rs. 12,24,79,838.00 made to the returned income of the Appellant by the learned DCIT under section 68 of the Act for the reason that the Appellant has not been able to convincingly discharge its onus of proving identity, genuineness and creditworthiness of the creditors, and that the Appellant is aggrieved in respect of each of the additions sustained by the learned CIT(A) for the following reasons: (i) Rs. 50,00,000.00 received from Mandi Alloys Pvt. Ltd. in respect whereof the Appellant had filed the confirmation from Rajesh Garg, a Director of Mandi Alloys Pvt. Ltd., and his bank statement and acknowledgement of its income tax return, and the entries in his bank statement stood fully and completely explained, and that there existed no onus on the Appellant to explain the source of source. (ii) Rs. 40,00,000.00 received from Amarnath Industries in respect whereof the Appellant had filed the confirmation, bank statement and acknowledgement of its income tax return, and that there was and remained nothing more to be established in support of genuineness of the transaction. (iii) Rs. 75,00,000.00 received from YKM Infrastructure in respect whereof the Appellant had filed the confirmation, bank statement and acknowledgement of its income tax return, and that there was and remained nothing more to be established in support of genuineness of the transaction. (iv) Rs. 3,60,00,000.00 received from Anil Jain and Meena Jain in respect whereof the Appellant had filed the confirmation, bank statement and acknowledgement of their income tax return and that there was and remained nothing more to be established in support of genuineness of the transaction.
That within the facts and circumstances of the case and the law on the point the learned CIT(A) has erred in dismissing the appeal of the Appellant without having afforded an adequate opportunity to the Appellant to provide explanation on issues relied upon by the learned CIT(A) in forming the decision, which is against the principal of natural justice and have been decided in haste, and that for such reasons the impugned Order is bad in law and deserves to be set aside and be remanded back to the learned DCIT or the learned CIT(A) to be decided afresh.
That the grounds of Appeal
submitted hereinabove are without prejudice to one another in such cases and circumstances wherever the context so requires.
5. That the Appellant reserves its rights to advance such other grounds before or at the hearing, which it may consider fit and appropriate, for which it craves leave to amend, alter or otherwise modify the ground(s) appearing hereinbefore.
3. Briefly the facts of the case are that the a search and seizure operation under Section 132 of the Income Tax Act, 1961, was conducted on 17/09/2010, covering the Surya Nectar and Parabolic Group of cases, in which the assessee company was also included. Following the search, notices under Section 153A were issued to the assessee. In response, the assessee requested that the returns originally filed under Section 139 be treated as returns filed in response to the Section 153A notices, albeit under protest. The assessee challenged the validity of the proceedings on various legal grounds, asserting that no search was actually carried out on its premises and that the mandatory panchnama was never provided.
3.1 The Ld. Assessing Officer (AO) rejected the assessee 's legal objections regarding the search, stating that the search action was clearly documented by the warrant and panchnama held on record. On merits, the AO determined the total income at significantly higher figures than returned: Rs. 13,10,89,306 for AY 2009-10, Rs. 1,34,70,240 for AY 2010-11, and Rs. 1,34,40,000 for AY 2011-12. Key findings included:
Unexplained Credits: For AY 2009-10, an addition of Rs. 12,24,79,838 was made under Section 68 on account of unexplained unsecured loans/share capital, as the AO noted a failure to provide necessary confirmations and documentary evidence. Disallowance of Interest: The AO disallowed interest deductions on borrowed funds (e.g., Rs. 58,37,021 in AY 2009-10) against rental income, asserting that the assessee had not justified the claim with sufficient evidence during the assessment. Head of Income: The AO recharacterized the rental income as "Income from House Property" rather than "Business Income" as claimed by the assessee. Business Losses: The AO did not allow the set-off of various business losses claimed in the returns, treating the assessment as having been made without the support of books of accounts or complete information.
4. Against the order of the AO the assessee went in appeal before the Ld. CIT(A). The CIT(A) upheld the procedural validity of the assessments, noting that the Surya Nectar group was indeed subject to search and that the appellant was covered under those proceedings. The CIT(A) observed that the AO had issued a detailed questionnaire and show-cause notice, yet the assessee failed to provide complete information, books of accounts, or supporting documentary evidence during the assessment stage. Consequently, the CIT(A) held that the assessee had failed to meet its burden of proof and dismissed the legal grounds challenging the lack of opportunity and the validity of the Section 153A notice. The CIT(A) categorized several other grounds as either consequential or general in nature, requiring no separate adjudication at that stage.
Against the order of the Ld. CIT(A) the assessee preferred in appeal before the Tribunal.
During the course of hearing none appeared on behalf of the Assessee.
Per contra, the Ld DR relied on the orders of the lower authorities.
We have gone through the rival contentions and perused the material available on record. Upon a careful perusal of the order sheet entries maintained during the course of these proceedings as well as the documents placed on record by the Ld. DR, we observe a consistent pattern of non- appearance on the part of the Assessee. It is evident from the record that the Ld. DR had got issued various notices fixing the case for hearing and duly communicated the same to the Assessee. However, despite service of such notices and repeated opportunities granted, the Assessee failed to appear before this Bench on the scheduled dates of hearing and did not avail the opportunity of being heard.
8.1 We take serious note of the fact that this matter has been pending for over 10 years. Given the significant passage of time and the Assessee's lack of diligence in pursuing the appeal.
8.2 It is a well-settled principle that the law assists those who are vigilant, not those who sleep over their rights. In light of the Assessee's continued absence and apparent lack of interest in the matter, the appeal is hereby dismissed for non-prosecution.
In the result, appeal of the Assessee is dismissed.