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Facts
The assessee filed an appeal against the order of the CIT(A) which dismissed their first appeal. The original assessment was completed under Section 147 r.w.s 144 after no return was filed in response to a notice under Section 148. Additions were made for deemed short-term capital gain and unexplained investment.
Held
The Tribunal noted that both the assessee's representative and the Revenue's representative agreed that the impugned order of the CIT(A) should be set aside and the matter remanded. The Tribunal agreed, setting aside the order and remanding the case for denovo adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the assessee's appeal ex-parte without deciding on merits, and whether the reassessment proceedings and order were bad in law.
Sections Cited
253, 147, 144, 148, 143(3), 246A, 250(6), 234A, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI BHAGIRATH MAL BIYANI & SHRI PARESH M JOSHI
आदेश/ O R D E R
Per Paresh M Joshi, J.M.:
This is an appeal filed by the Assessee Under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as the “Act” for sake of brevity) before this Tribunal as and by way of a second appeal. The assessee is aggrieved by order bearing Number ITBA/NFAC/S/ 250/2024-25/1073115369(1) dated 11.02.2025 passed by the Ld. CIT(A), U/s 250 of the Act which is hereinafter referred to as the “impugned order”. The relevant Assessment
Page 1 of 7 from 01.04.2011 to 31.03.2012.
FACTUAL MATRIX 2.1 That as and by way of an assessment order made u/s 147 r.w.s. 144 of the Act, the assessee’s total income exigible to tax was computed & assessed at Rs.67,82,660/-.
2.2 The assessee is an individual & partner in M/s Vadik Associated & M/s Nand Vihar Developers. That the assessee derives remuneration & interest from these firms. The assessee had filed return of income for the A.Y.2012-13 on 28.03.2013 declaring total income of Rs.18,76,290/-. The regular assessment was completed u/s 143(3) on 12.01.2015 assessing the total income at Rs.18,76,290/-. A notice u/s 148 was issued to the assessee on 03.01.2019 after duly recording the reasons which was duly served. In response to the notice issued no return of income was filed by the assessee. The addition on account of deemed short term capital gain was computed at Rs.15,06,370/-.
Yet another addition of Rs.34,00,000/- was made on account of unexplained investment in the firm of M/s Nand Developers. That Page 2 of 7 ITBA/COM/F/17/2019-20/1021116220(1) & that the same is dated 26.11.2019 which is hereinafter referred to as the “Impugned Assessment Order”.
2.3 That the assessee being aggrieved by the aforesaid “Impugned assessment Order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “Impugned Order” has dismissed the first appeal of the assessee on the grounds & reasons stated therein. The core grounds & reasons are stated as hereunder:-
“6. It is clear from the discussion in para nos. 4 & 5 above that the appellant is not desirous of pursuing the grounds of appeal though more than adequate opportunities were provided. Since the appellant failed to controvert the AO's findings while making the additions as referred in para 2 above, therefore, I have no other option but to upheld these additions. It may be noted that the appellant did not appear before the AO also during the course of assessment proceedings due to which the assessment was completed ex- parte u/s. 144 of the Act. It appears that the appellant is a habitual defaulter and is not interested in pursuing this appeal. Under the circumstances, I dismiss the appeal following the ratio of the decision of the Hon'ble ITAT, Delhi Bench in the case of CIT Vs. Multiplan India Limited reported in 38. ITD 320 and also the decision of the Hon'ble MP High Court in the case of Estate of Late Tukhoji Rao Holkar Vs. CWT reported in 233 ITR 480. The law assists those that are vigilant with their rights and not those that sleep there upon.
Page 3 of 7 A.Y. 2012-13 Following this principle as embodied in the well known dictum "vigilantbus non dormentibus, jura subveniunt", all the grounds raised in the appeal are dismissed.
7. In the result, the appeal is dismissed.” 2.4 That the assessee being aggrieved by the “Impugned Order” has preferred the instant second appeal before this Tribunal & has raised following the grounds of appeal in the form No.36 against the “Impugned Order” which are as under:-
“1. That the Ld. CIT(A) erred in dismissing appeal of the assessee ex-parte without deciding grounds of appeal on merit.
2. That the Ld. CIT(A) ought to have held that proceeding of reassessment and order of reassessment passed by AO were bad in law.
3. That the Ld. CIT(A) ought to have set-aside and annulled the order of reassessment passed by A.O.
4. That the Ld. CIT(A) erred in confirming addition of Rs. 15,06,370/- to total income on account of deemed short term capital gain.
5. That the Ld. CIT(A) erred in confirming addition of Rs.34,00,000/- on account of unexplained investment in firm M/s Nand Developers.
6. That the Ld. CIT(A) erred in maintaining levy of interest u/s 234A of Rs. 1,09,044/-.
7. That the Ld. CIT(A) erred in maintaining levy of interest u/s 2348 of Rs. 16,46,728/-.”
Record of Hearing
Page 4 of 7 Tribunal on 01.12.2025 when Ld. AR for and on behalf of the assessee appeared before us and interalia contended that in the “Impugned Assessment Order” only one reply of the assessee was considered & it appears that Ld. AO has passed the “Impugned Assessment Order” for non-filing of return. It was further argued by the Ld. AR that the “Impugned Order” of the Ld. CIT(A) is an exparte order & that the same should be set aside & matter should be remanded back to the file of the Ld.
CIT(A) for denovo adjudication. Per contra the Ld. DR appearing for & on behalf of the Revenue concurs with the submission made by the Ld. AR that let the “ Impugned Order” be set aside & the matter be remanded back to the file of the Ld. CIT(A) for denovo adjudication of the first appeal.
Observation Finding & conclusions 4.1 We now have to decide the legality validity & the proprietary of the “Impugned Order” basis records of the case & rival contentions canvassed before us.
Page 5 of 7 presented to this Tribunal by both the Ld. AR & the Ld. DR to determine the legality, validity of the “Impugned Order” basis law & by following the due process.
4.3 We basis records of the case & after hearing & upon examining the contentions are of the considered view that both the Ld. AR & Ld. DR are ad idem that the “Impugned Order” should be set aside & that the matter should be remanded back to the file of the CIT(A) so as to enable him to pass a fresh order after taking into consideration the entire gamut of the case from all the angles on denovo basis. Assessee is directed to Cooperate with the Department. The Ld. CIT(A) should pass a reasoned order on merits of the case. (s.250(6) of the Act)
4.4 In view of the premises drawn up by us we set aside the “Impugned Order” & remand the case back to the file of the Ld. CIT(A) on denovo basis, with directions as aforesaid.
Page 6 of 7 5.1 In the premises drawn up by us the “Impugned Order” is set aside & case of the assessee is remanded to the Ld. CIT(A) on denovo basis.
5.2 In result the appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 04 .12.2025.