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Facts
The assessee company's assessment was reopened under Section 148 for unexplained unsecured loans of ₹27,35,000. The Assessing Officer made an addition of this amount to the total income. The CIT(A) dismissed the appeal ex parte due to non-compliance by the assessee.
Held
The Tribunal noted that the assessment and appellate orders were passed ex parte due to the assessee's non-compliance. However, in the interest of justice, the assessee was granted one more opportunity to substantiate its claim before the Assessing Officer.
Key Issues
Whether the assessee was denied a fair opportunity to present its case, and if not, whether an opportunity should be granted for fresh adjudication.
Sections Cited
148, 147, 144, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH, PATNA
Before: Shri Sonjoy Sarma & Shri Rakesh Mishra
Assessment Year: 2011-12 Krrish Distributors Pvt. Ltd….………. …………………....Appellant 54, Harihar Apartment, East Boring Canal Road, Patna, Bihar- 800001.. [PAN: AADCK3250E] vs. ITO, Ward-2(1), Patna…....…..……………..………………….…..... Respondent Appearances by: Shri D. V. Pathy, Sr. Adv., appeared on behalf of the appellant. Shri Ashwani Kr. Singal, JCIT, appeared on behalf of the Respondent. Date of concluding the hearing : October 08, 2025 Date of pronouncing the order : October 09, 2025 आदेश / ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal is directed by the assessee against the order dated 21.08.2024 passed by the NFAC under section 250 of the Income-tax Act, 1961.
Brief facts of the case are that the assessee is a Private Limited Company. In the case of the assessee the assessment was reopened under Section 148 of the Act on the ground that, during the year under consideration, the assessee had received unsecured loans amounting to ₹27,35,000, for which no satisfactory explanation or supporting evidence was furnished during the re-assessment proceedings. The Assessing Officer completed the assessment under Section 147 read Krrish Distributors Pvt. Ltd with Section 144, determining the total income at ₹32,50,320 after making an addition of ₹27,35,000 as unexplained cash credit.
The learned CIT(A) dismissed the appeal ex parte, observing that despite several opportunities, the assessee failed to comply with the notices of hearing. The CIT(A) upheld the assessment on merits due to non-prosecution.
Aggrieved by above order the assessee is in appeal before this tribunal. At the time of hearing the ld. A.R submitted that the orders of both the authorities below were passed ex parte, without granting a fair opportunity to present the case. It was contended that the assessee is now in a position to substantiate the loan transactions with proper evidences, and hence, a reasonable opportunity may be granted in the interest of justice.
On the other hand the learned DR. supported the orders of the lower authorities, stating that the assessee was given sufficient opportunities but failed to appear or file evidence.
We have considered the submissions of both parties and examined the material available on record. It is noted that the assessment as well as the appellate order were passed ex parte due to non-compliance by the assessee. However, in the interest of justice, the assessee deserves one more opportunity to substantiate its claim before the Assessing Officer. Accordingly, we deem it fit to set aside the impugned order and restore the matter to the file of the Assessing Officer for fresh adjudication. The Assessing Officer shall grant proper opportunity to the assessee to produce relevant documents and evidence in support of the loan transactions and decide the issue in accordance with law. The assessee is directed to appear and cooperate Krrish Distributors Pvt. Ltd in the proceedings as and when called for. In case of failure to do so, the Assessing Officer shall be at liberty to decide the matter on the basis of material available on record.