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Facts
The assessee filed an appeal against an ex-parte order passed by the Ld. CIT(A) which dismissed the assessee's first appeal. The assessee contended that the Ld. CIT(A) passed the order without proper opportunity of hearing and that the time allowed for compliance was too short.
Held
The Tribunal held that the impugned order was passed with too short a time for the assessee to plead their case. Therefore, the Tribunal set aside the impugned order and remanded the case back to the Ld. CIT(A) for a denovo hearing.
Key Issues
Whether the ex-parte order passed by the Ld. CIT(A) was in violation of the principles of natural justice due to insufficient opportunity of hearing.
Sections Cited
253, 143(3), 68, 115BBE, 246A, 44AB, 234B
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/APL/S/250/2024- 25/1073825025(1) dated 28.02.2025 passed by the Ld. CIT(A) u/s 250 of the Act which is hereinafter referred to as the “Impugned order”. The relevant Assessment Year is 2017-18
Page 1 of 7 and the corresponding previous year period is from 01.04.2016 to 31.03.2017.
FACTUAL MATRIX 2.1 That as and by way of an assessment order u/s 143(3) of the Act, the assessee’s total income exigible to tax was computed at Rs.20,23,400/-. The total income as per the Return of Income was at Rs.2,58,865/-. The addition of Rs.3,91,000/- was made u/s 68 of the Act r.w.s. 115BBE. An another addition of Rs.13,73,533/- as per para 6 of the aforesaid order was too made. The aforesaid assessment orders bears No.ITBA/AST/S/143(3)/2019-20/1021926827(1) and that the same is dated 09.12.2019, which is hereinafter referred to as the “impugned assessment order”.
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 grounds and reasons stated therein. The core grounds and reasons for the dismissal of the 1st appeal was as under:-
“From the conduct of the appellant as per the facts noted above, it is clear that the appellant does not wish to pursue the appeal.
Even otherwise on the merits of it also, I do not see any reason to differ with the findings of the AO since no attempt has been made by the appellant to discharge its onus. Hence, respectfully following the above-mentioned judicial pronouncements and in view of the facts of the case, the appeal is hereby dismissed”.
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 passing ex-parte assessment order without allowing a proper and reasonable opportunity of being heard. The time allowed for compliance is also very short.
2.That on the facts and in the circumstances of the case the Ld. CIT(A) erred in passing the ex-parte order without deciding the following grounds of appeal on merits:
1] That impugned order passed by the Ld. A.O is bad in law as well as on the facts. It is based on incorrect interpretation of law and the facts have also been incorrectly construed.
2.1] That on the facts and in the circumstances of the case and in law the Ld. A.O erred in making addition of Rs.3,91,000/- being cash deposited in bank in SBN currency without appreciating the fact that the source of cash deposited was cash received from the customers during the course of business. Moreover as per press release dated 24.11.2016 the assessee was authorised to receive demonetized currency up to Rs.500/- per top up.
2.2] That on the facts and in the circumstances of the case and in law the Ld A.O erred in treating the demonetized currency note of Rs.3,91,000/-deposited in bank as unexplained credit u/s 68 and accordingly charging the tax as per the provision of section 115BBE
3] That on the facts and in the circumstances of the case and in law the Ld A.O erred in making an addition of Rs. 13,73,533/-
(being 8% of cash deposits of Rs.2,09,28,900/- in bank account other than SBN currency) as business receipts without appreciating the facts that assessee is carrying the business of distributorship of recharge of Vodafone and Airtel on F the commission basis i.e @1.5% of total receipts. That Rs.2,09,28,900/- represents the total amount of recharge vouchers the assessee after deducting his percentage of commission deposits the balance amount in the account of the company being cost of recharge vouchers provided to him by the company on commission basis. 4] That on the facts and in the circumstances of the case and in law the Ld A.O erred in prescribing that the books of account of financial year 2016-17 are to be audited u/s 44AB since the total turnover/credits in assessee's bank account exceeds the limit of" Rs.1,00,00,000/- during the financial year 2016-17 without appreciating the facts that the assessee is carrying the commission business and the annual income of the assessee is below the specified limits. 5] That on the facts and in the circumstances of the case and in law the Ld A.O erred in charging interest u/s 234B at Rs.2,06,646/-”
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 the “impugned order” is illegal, not proper and is in the violation of the principles of natural justice, as with in a period spanning 8 days two notice(s) came to be issued and placed reliance on para 4.1 of the “impugned order” to demonstrate this fact. Hence it was submitted that no effective opportunity of hearing was ever given
Page 4 of 7 and time provided indeed for hearing was too short. The Ld. DR appearing for and on behalf of Revenue contended that the revenue has no objection if the matter is remanded back to the Ld. CIT(A) for disposal on merits.
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.
4.3 We basis records of the case and after hearing and upon examining the rival contentions are of the considered opinion that the “impugned order” indeed has given too short a time to the assessee to plead the case in the hearing. We notice basis para 4.1 of the “impugned order” that the first hearing was fixed on 11.01.2021. The second hearing was thereafter fixed on 17.02.2025 and the third hearing on 25.02.2025. The time gap between 17.02.2025 to 25.02.2025 was too short and the Ld. AR
Page 5 of 7 of the assessee has made a grievance of the same in the hearing to which the Ld. DR has given his concurrence.
4.4 In view of the above, we set aside the “impugned order” and remand the case back to the file of Ld. CIT(A) on denovo basis. The Ld. CIT(A) would give effective and meaningful opportunity to the assessee to plead the case and would thereafter pass a well reasoned order on merit of the case so that the income of the assessee is assessed and computed on real time basis exigible to tax according to law. Assessee to cooperate with the Department.
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. CIT(A) on denovo basis with the directions as aforesaid.
5.2 In the result appeal of the assesse is allowed for statistical purpose. Order pronounced in open court on 23.09.2025.