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Facts
The assessee filed an appeal against the order of the CIT(A) which confirmed the addition made by the AO for AY 2017-18. The AO had reopened the assessment based on the purchase of immovable property and treated a sum of Rs. 15,47,000/- as unexplained investment. The assessee claimed this was from an unsecured loan from Smt. Amrita Agarwal.
Held
The Tribunal condoned the delay in filing the appeal. It was held that the assessee had provided sufficient evidence, including an affidavit from the lender and bank statements, to substantiate the unsecured loan. Therefore, the addition made by the AO and confirmed by the CIT(A) was not justified.
Key Issues
Whether the addition of Rs. 15,47,000/- as unexplained investment is justified when the assessee has provided evidence of an unsecured loan and whether the assessment order passed ex-parte is valid.
Sections Cited
147, 148, 148A, 144, 69, 234A, 234B, 234C, 142(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,’’SMC” JAIPUR
fu/kZkj.ko"kZ@AssessmentYear : 2017-18 Shri Mali Ram Yadav cuke The ITO Vs. Thekryo Ki Dhani, Ward – 7(2) Village & Post: Jahota, Tehsil: Amer Jaipur Distt: Jaipur 303 701 LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: ABJPY 6715A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Shri Rakesh Kumar Kabra, CA Mrs. Prachela Kabra, CA jktLo dh vksjls@Revenue by: Shri Gautam Singh Choudhary, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 18/09/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: : 28/10/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated 25.07.2024 for the assessment year 2017-18 raising therein following grounds of appeal. ‘’1. That the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), dated 25.07.2024, is bad in law and void ab initio as it has been passed ex-parte without affording the appellant a reasonable and sufficient opportunity of being heard, thereby violating the principles of natural justice SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR
2. That the learned CIT(A) erred in confirming the addition made by the Assessing Officer without considering the documentary evidences duly submitted along with Form 35, including confirmation of the lender, bank statement, and Income Tax Return of the lender, which fully established the identity, creditworthiness, and genuineness of the transaction.
Notice Barred by Limitation That the initiation of reassessment proceedings u/s 147 of the Income Tax Act, 1961 and issuance of notice u/s 148A is illegal, arbitrary, and void ab initio as the same was issued beyond the prescribed time limit and without fulfilling the conditions laid down under the law. The action is thus without jurisdiction and liable to be quashed.
That in the facts and circumstances of the case, the learned AO grossly erred in treating the sum of Rs. 15,47,000/- as unexplained investment u/s 69 despite proper explanation and supporting documents showing that the source of funds was an unsecured loan taken from smt. Amrita Agarwal through banking channels. Also his deduction of Rs. 84,300 was also not allowed in the computation of tax although it is nowhere discussed in the order.
Improper Service of Notices by A) -That the learned AD erred in proceeding with ex-parte assessment under section 144 as the statutory notices u/s 148, 142(1), and 144 were either not served on the appellant OR served late, leaving no time for compliance. Hence, the assessment order is bad in law and liable to be annulled 6. That the learned AO has erred in charging interest u/s 234A, 2348, and 234C of the Act. which is not leviable in the facts and circumstances of the case and hence the same is liable to be deleted in full.’’ 2.1 At the outset of hearing of the appeal, it is noticed that there is delay of 330 days in filing the appeal by the assessee for which the assessee has filed an application dated 06-08-2025 for condonation of delay narrating therein the reason that the order passed by the ld. CIT(A), NFAC, Delhi was received on 23-07-2025 while checking the income tax E- filing Portal during preparation of return for A.Y. 2025-2025. He submitted that this delay of late filing of appeal is beyond his control as he was unware of SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR the order passed against him until 23-07-2025. The order was not communicated nor serve earlier and the same was discovered while downloading Form 26AS.Hence the delay in filing the appeal is neither intentional nor deliberate but is attributable to bona fide reasons. To this effect, the assessee has filed an affidavit deposing therein the above facts and circumstances case as to delay in late filing of the appeal. 2.2 During the course of hearing, the ld DR objected to such inordinate delay but submitted that the Court may decide the issue as deemed fit and proper in the case. 2.3 We have heard both the parties and perused the materials available on record. From the submissions of the assessee, the Bench feels that the assessee was prevented with sufficient reason for not filling the appeal in time and therefore, we condone the delay as this delay occurred due to non-receipt / non-communication of ld. CIT(A)’s order by the assessee. 3.1 Apropos grounds of appeal
of the assessee, it is noticed that the ld. CIT(A) passed an exparte order as the assessee did not respond to the notices issued by the ld. CIT(A) and thus the ld.CIT(A) dismissed the appeal of the assessee by observing at para 5 to 6 of his order as under:-
5. Examination of the Issue and decision: The present appeal has been filed by Shri Mali Ram Yadav (hereinafter referred to as the appellant) against the assessment order dated 27th May 2023 passed SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR by the Income Tax Officer, Ward 7(2), Jaipur (hereinafter referred to as 'the AO'), under sections 144/147 of the Income Tax Act, 1961 (hereinafter referred to as the Act) for the Assessment Year (AY) 2017-18. The AO reopened the assessment u/s 147 based on information regarding the purchase of immovable property by the appellant during the relevant financial year. Despite several notices issued under sections 148 and 142(1) of the Act, the appellant failed to file the return of income and provide satisfactory explanations for the transactions under scrutiny. Consequently. the AO completed the assessment ex-parte u/s 144, treating Rs. 15,47,000/- as unexplained investment u/s 69 of the Act and assessed the total income at Rs. 19,27,270/- The appellant contended that the notice u/s 148 was issued after the expiry of the limitation period, making the reassessment proceedings void ab initio. 3.2 The appellant claimed that the loan of Rs. 15,00,000/- was taken from Smt. Amrita Agarwal, supported by bank statements and confirmation letters. However, due to the non-receipt of notices on time, the appellant could not submit the required documents within the stipulated period. 3.3 The appellant argued that the AO's order is based on presumptions and lacks material evidence against the appellant. The AO initiated reassessment proceedings based on the information regarding the purchase of immovable property, Notices u/s 148 and 142(1) were duly issued, but the appellant failed to comply. 4.2 The appellant's claim of a loan from Smt. Amrita Agarwal was not substantiated with sufficient documentary evidence. Despite repeated opportunities, the appellant did not furnish confirmation of account, ITR, and bank statements of Smt. Amrita Agarwal to establish the genuineness of the loan transaction. 4.3 The AO treated Rs. 15,47,000/- as unexplained investment u/s 69 due to the appellant's failure to explain the source of funds adequately. The Hon'ble Supreme Court in the case of ACIT vs Rajesh Jhaveri Stock Brokers (P) Ltd. [(2007) 291 ITR 500 (SC)] held that the AO is empowered to reopen an assessment if there is tangible material to form a belief that income has escaped assessment. In the present case, the AO had tangible material regarding the purchase of immovable property, justifying the reopening of the assessment. The appellant was provided multiple opportunities to present evidence and explanations. Notices were issued under sections 148 and 142(1), but the appellantfailed to comply within the given time frame. The principles of natural justice have been adhered to, and the appellant's non-compliance justifies the ex-parte assessment u/s 144, The onus of proving the genuineness of the loan transaction lies with the appellant. In the case of CIT vs P Mohanakala (2007) 291 ITR 278 (SC)), the Supreme Court held that the assessee must provide cogent evidence to substantiate the genuineness of transactions. In the present case, the appellant SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR failed to provide sufficient evidence to substantiate the loan from Smt. Amrita Agarwal The interest charged u/s 234A, 2348, and 234C is consequential and mandatory as per the provisions of the Act. The appellant has not provided any valid ground for the deletion of the interest charged. In view of the above facts, circumstances, and legal precedents, the appeal filed by Shri Mali Ram Yadav is dismissed. The assessment order passed by the AO u/s 144/147, treating Rs. 15,47,000/- as unexplained investment u/s 69, and assessing the total income at Rs. 19,27,270/- for the AY 2017-18 is upheld. The interest charged u/s 234A, 2348, and 234C is consequential in nature.
6. The appeal filed by the appellant is hereby dismissed.
3.2 During the course of hearing, the ld. AR argued that lower authorities are not justified in sustaining the addition of Rs.15,47,000/- as an unexplained investment u/s 69 of the Act for which the assessee had filed the details before the AO but he had not taken care of them and thus made the addition of Rs.15,47,000/- u/s 69 of the Act and the same has also been sustained by the ld. CIT(A). 3.3 On the other hand, the ld DR supported the orders of the lower authorities.He also submitted that assessee has not submitted the details of the capital account and therefore, matter be remanded back to the file of the ld. AO. 3.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the AO made an addition of Rs.15,47,000/- in the hands of the assessee treating the amount as SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR unexplained investment u/s 69 of the Act by observing at page 2 of his order as under:- ‘’Para 3:- Assessee also claimed to pay Rs.14,38,710/- to Shri Ganesh Singodiya on 25-11-2016, whuich was reflected in the bank account statement provided by the assessee. Further, asseessee explained the source of the above mentioned transactions as unsecured loan of Rs.15,00,000/- taken from Amrita Agarwal on 14-10-2016, which was reflected in the bank account statement provided by the assessee. Para 4:- To verify the claim made by assessee and establish the genuineness of the above mentioned transactions related to unsecured loan of Rs.15,00,000/- taken from Amrita Agarwal, this office issued a notice u/s 142(1) of the Income Tax Act, 1961 dated 18-052023 and to furnish confirmation of account including copy of ITR of Amrita Agarwal and Bank account statements to examine the creditworthiness and genuineness by 22-05-2023. But assessee failed to comply to the notice dated 18-05-2023 and not furnished and detail till today. Para 5:- In view of the above, this office not able to genuineness of the above mentioned transactions and failed to provide the source of purchase of immovable property worth of Rs.15,47,000/- at this point of time with the materials available. Therefore, considering the fact, Rs.15,47,700/- is treated as unexplained investment u/s 69 of the I.T. Act, 1961 and taxed accordingly in the hands of the assessee. In first appeal, the ld. CIT(A) has confirmed the action of the AO by observing as under:- ‘’In view of the above facts, circumstances, and legal precedents, the appeal filed by Shri Mali Ram Yadav is dismissed. The assessment order passed by the AO u/s 144/147, treating Rs. 15,47,000/- as unexplained investment u/s 69, and assessing the total income at Rs. 19,27,270/- for the AY 2017-18 is upheld. The interest charged u/s 234A, 2348, and 234C is consequential in nature.’’ It is noted that the assessee had filed his Income Tax Return for the assessment year 2017-18 alongwith computation and copy of PAN and also submitted the copy of agreement deed between him and Shri Subhash SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR Kumar Yadav. The assessee explained that he had purchased the property with Mr. Suhash Kumar Yadav for Rs.3,94,000/- from Shri Ganesh Singodia (seller of property) and his share was 50% i.e. 15,47,000/-. In order to pay his share by the assessee, the assessee had paid Rs.14,38,710/- to Shri Ganesh Singodia on 25-11-2016 which is reflected in the bank statement of Mali Ram Yadav Bank A/c No.213701000006773 (Finacle IOB – PB Page 74). This amount was debited to the account of Shri Ganesh Singodiya by the bank on 25-11-2016. It is also noteworthy to mention that the assessee explained the source of unsecured loanof Rs.15,00,000/- taken from Smt Amrita Agarwal on 14-10-2016 which is also reflected in the bank statement of the assessee Shri Mali Ram Yadav that this amount of Rs.15.00 lacs is credited in his Bank A/c Bank A/c No.213701000006773 – Indian Overseas Bank, Jaipur – PB Page 73. To this effect, Smt. Amrita Agarwal has filed an affidavit dated 18-09-2025 deposing therein following averments:- ‘’I, Amrita Agarwal, D/o Shri Suresh Agarwal, resident of 7/98, Vidyadhar Nagar, Jaipur (Rajasthan), PAN AEXPA2193R, do hereby solemnly affirm and state as under: 1. That on 14.10.2016, I advanced a sum of Rs.15,00,000/- (Rupees Fifteen Lakhs only) to Mr. Maliram Yadav, 5/0 Shri Mangal Chand Yadav, resident of Village Jahota, Therkyon Ki Dhank Jaipur (Rajasthan), PAN: ABJPY6715A, as a loan SHRI MALI RAM YADAV VS ITO, WARD 7(2), JAIPUR 2. That this amount was given from my ICICI Bank, Vidyadhar Nagar Branch, Jaipur, Account No. 678901070693, vide Cheque No. 081630, dated 14.10.2016, directly to Mr. Maliram Yadav 3. That the said amount of Rs.15,00,000/- was from my own personal savings, but the same was earlier advanced by me as a loan to G M Plaster Industries. The amount was duly returned by G M Plaster Industries and received back into my above-mentioned ICICI Bank account on 13.10.2016 4. That upon receipt/redeposit of the amount of Rs. 15,00,000/- from G M Plaster Industries, I, on request of Mr. Mali Ram Yadav, transferred the same amount as a loan to Mr. Mali ram Yadav 1 5. That the route, genuineness, and full particulars of the transaction are clearly evidenced by the entries in my bask statement and are entirely by banking channels.