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Facts
The assessee filed an appeal against an order that confirmed an addition of Rs. 10,00,000/- on account of unexplained cash credits. The assessee had not filed a return in response to a notice u/s 148 and had remained non-compliant with notices u/s 142(1). The first appellate authority dismissed the appeal for non-prosecution.
Held
The Tribunal condoned the delay in filing the appeal, finding sufficient cause. On merits, the Tribunal held that the impugned order was not meritorious. The Tribunal set aside the order and remanded the case back to the Assessing Officer for a denovo assessment.
Key Issues
Whether the delay in filing the appeal is condonable? Whether the addition on account of unexplained cash credits is justified? Whether the order passed without affording proper opportunity is valid?
Sections Cited
253, 147, 144, 144B, 68, 148, 142(1), 250, 246A, 153A, 143(3), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
the order bearing Number ITBA/NFAC/S/250/2023- 24/1059786329(1) dated 16.01.2024 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2016-17 and the corresponding previous year period is from 01.04.2015 to 31.03.2016.
Page 1 of 10 & 218/Ind/2025 - A.Y. 2016-17 2. FACTUAL MATRIX 2.1 That as and by way of an assessment order made u/s 147 r.w.s. 144/144B of the Act the assessee total income exigible to tax was computed at Rs.11,25,550/-. The income as per the Return of Income was at Rs.1,25,550/-. The addition of Rs.10,00,000/- was made u/s 68 of the Act. That in response to the notice u/s 148 of the Act issued on 31.03.2021 the assessee did not file the return of income. Notice(s) u/s 142(1) of the Act dated 13.01.2021,16.11.2021 and 14.12.2021 too remained un-complied by the assessee. That the aforesaid assessment order bears No. ITBA/AST/S/147/2021-22/ 1040187464 (1) and that the same is dated 28.02.2022 which is hereinafter referred to as the “impugned assessment order”.
This is an order on a quantum assessment. The other appeal No.ITA/Ind/218/Ind/2025 is on penalty.
2.2 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 1st appeal of the assessee on the Page 2 of 10 & 218/Ind/2025 - A.Y. 2016-17 grounds and reasons stated therein. The core grounds and reasons for the dismissal of the 1st appeal was as under:-
“5. In Ground no. 1 to 7 appellant has challenged the addition amounting to Rs. 10,00,000/- on account of unexplained cash credits u/s 68 of the I.T. Act, 1961. Several opportunities have been allowed to the appellant in terms of the notices fixed for hearing of the appeal under section 250 of the Act issued to the appellant. No compliance has been made by the appellant till date. The details of the opportunities allowed to the appellant to represent in this case are tabulated as under:-
DIN No. Date of Notice Date of hearing Remarks fixed 1052907737 17.05.2023 01.06.2023 No reply 1056313797 20.09.2023 05.10.2023 No reply 1058638455 11.12.2023 26.12.2023 No reply
6. The aforesaid non compliances reveals beyond doubt that the appellant has nothing to say in the matter of present appeal. Thus, it appears that the assessee is not interested in prosecution of the present appeal and the same is liable to be dismissed on this ground itself. The law assists those who are vigilant and not those who sleep over their rights. This principle is embodied in the well known dictum "VIGILATIBUS, NON DORMENTIBUS, JURA SUBVENIUNT". Considering the facts and relying on the decision of the Hon'ble, ITAT, Delhi Bench, in the case of CIT Vs Multiplan India Ltd. reported in 38-ITD-320 and the judgement of the Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukoji Rao Holker Vs. CWT (1997) reported in 223-ITR-480 the present appeal is liable to be dismissed.
7. The appellant has raised grounds of appeal
No. 1 to 7 which challenged the addition of amount of Rs. 10,00,000/- on account of unexplained cash credits u/s 68 of the I.T. Act, 1961. However no written submissions were filed in respect of Grounds of Appeal
No. 1 to 7. It is noted that the appeal of the appellant has been dismissed by me for non prosecution in para
6. In view thereof the various grounds raised in appeal have become academic in nature. Grounds of Appeal No. 1 to 7 are hereby dismissed.
As a result, the appeal is dismissed”.
Page 3 of 10 & 218/Ind/2025 - A.Y. 2016-17 2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this Tribunal and has raised following grounds of appeal in the Form No.36 against the “impugned order” which are as under:-
“1. The Ld. CIT(A) erred in law and facts of the case and confirmed the action of the Ld. Assessing Officer, who passed an ex-parte order u/s 144 without any merits and without providing the assessee an opportunity of being heard.
The Ld. CIT(A) erred in law and facts of the case and confirmed the action of the Ld. Assessing Officer in taking action u/s 147 without any reason to believe that income escaped assessment.
3. The Ld. CIT(A) erred in law and facts of the case and confirmed the action of the Ld. Assessing Officer in taking action u/s 147 without providing a copy of the reasons recorded w/s 148(2), which is without jurisdiction.
4. The Ld. CIT(A) erred in law and facts of the case and confirmed the action of the Ld. Assessing Officer in assessing 4 the total income at Rs. 11,25,550/- under section 147 read with section 144 of the Income Tax Act, 1961, as against the return income of Rs. 1,25,550/-.
5. The Ld. CIT(A) erred in law and facts of the case and confirmed the action of the Ld. Assessing Officer in making an addition on information obtained during the course of assessment proceedings u/s 153A/143(3) in the case of M/s. AP Jewellers, without affording an opportunity to the assessee to cross-examine the same.
The Ld. CIT(A) erred in law and facts of the case and confirmed the action of the Ld. Assessing Officer in making an addition of unsecured loan of Rs. 10,00,000/- u/s 68 of the Income Tax Act, 1961, without considering full facts and reasoning. The addition made is totally wrong and illegal on the facts of the case.
The Appellant craves to leave, add, alter, or amend any of the grounds at or before the hearing”.
Page 4 of 10 & 218/Ind/2025 - A.Y. 2016-17
Record of Hearing 3.1 The hearing in the matter took place before this Tribunal on 22.09.2025 when the Ld. AR for and on behalf of the assessee appeared before us and interalia contended that there is a delay of 324 days in preferring the instant second appeal before this Tribunal and in this regard the assessee has made a condonation of delay application praying for the condonation of delay as the delay was not intentional. The Ld. AR in the application for condonation has taken a plea of “lack of knowledge regarding legal provisions and time limitation” for filing the instant appeal.
Hence cause of delay is inadvertent. The Ld. AR in support of the condonation of delay application has placed reliance on Director of assessee company’s affidavit dated 20.01.2025 wherein it is averred that the date of the “impugned order” is 16.01.2024 and that due date of filing the appeal was 16.03.2024 and that no notice(s) and also the “impugned order” was served physically at the registered office of the assessee company by the Income Tax Department. Further the “impugned order” is ex-parte without considering the merit of the case. Delay is unintentional. An additional affidavit
Page 5 of 10 & 218/Ind/2025 - A.Y. 2016-17 dated 20.09.2025 was also placed on record in the support of condonation of delay application wherein additionally it is averred that the delay also occurred because the original authorized counsel was changed during the appellate proceedings. However the e-mail id registered with the department continued to belong to the original authorized counsel who was later changed and hence the assessee company had no knowledge of the passing of the “impugned order”. The Ld. AR submitted that while the assessee was contemplating the option under Vivad Se Vishwas (VSV) Scheme, 2024, in the late January, 2025 and upon visiting the portal in order to check the status of 1st appeal it was discovered that the first appellate order was already passed.
Hence delay is bonafide and same be condoned. It was also pleaded by the Ld. AR during the hearing that in Form No.35 the e-mail id was of old counsel as the first appeal was filed by the old counsel. In the month of January,2025 the Management logged into the portal and found that the first appeal order is already passed and whether they should go for VSV or not was deliberated with the new counsel. Per contra Ld. DR appearing for the revenue contended that the assessee company has Page 6 of 10 & 218/Ind/2025 - A.Y. 2016-17 remained non complaint even in the first appeal but the delay was condoned by Ld. CIT(A) but there was no representation at all by the assessee company at the first appellate stage also. Hence delay if any be condoned with cost. Further the assessee company be directed to cooperate with the department as even the “impugned assessment order” is u/s 144 of the Act. The Ld. AR also pleaded that the first appellate order is not meritorious in nature and prayed for remand so that order on merit could be passed. identical submissions be taken in to consideration pleaded both the Ld. AR and Ld. DR during the hearing.
Observations,findings & conclusions.
4.1 We now have to decide the legality, validity and the proprietery of the “impugned order” basis records of the case and rival contentions canvassed before us.
4.2 We have carefully perused the records of the case as presented to this Tribunal by both the Ld. AR & the Ld. DR to determine the legality, validity of the “impugned order” basis law and by following the due process.
Page 7 of 10 & 218/Ind/2025 - A.Y. 2016-17 4.3 We basis records of the case and after hearing and upon examining the contentions are of the considered opinion that on issue of delay the assessee company has shown sufficient cause.
Appeal is admitted and taken up for hearing. On merits we observe and notice that the “impugned order” is not meritorious in terms of Section 250 of the Act. This Tribunal desires both the Ld. A.O and Ld. CIT(A) to pass meritorious orders and expect the assessee to cooperate with the department. The assessee company is a corporate body hence we expect them to be more vigilant and cautious. They should as a corporate body regularly visit the IT portal so that nothing is missed out by them. The system gets clogged which they as a corporate body should appreciate.
4.4 In view of above, we set aside the “impugned order” and remand the case back to the file of Ld. A.O on denovo basis.
Assessee to give all the information to the Ld. A.O and to cooperate with the department. In the peculiar facts and circumstances we impose a cost of Rs.5,000/- each in both the above appeals which is to be paid by the assessee company to the Page 8 of 10 & 218/Ind/2025 - A.Y. 2016-17 “PM Relief Fund” and show the receipt to the Ld. A.O in denovo proceedings prior to its commencement.
Order 5.1 In view of the aforesaid the “impugned order” is set aside as and by way of remand back to the file of the Ld. A.O on denovo basis with the directions as aforesaid.
5.2 In the result appeal of the assessee is allowed for statistical purpose.
Since the facts and circumstances are almost identical and similar this appeal too was heard simultaneously and disposed off by this order mutadis mutandis.
5.4 Finally in result both the appeals are allowed for statistical purpose.
Order pronounced in open court on 23.09.2025.