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Facts
The assessee appealed against an ex-parte order by the CIT(A) which confirmed additions for unexplained cash credits and disallowed interest expenditure. The assessee's directors were unable to present their case due to personal circumstances, including one director being in jail and the other suffering from illness.
Held
The Tribunal acknowledged that the non-presentation of the assessee's case was not intentional but due to circumstances beyond their control. Therefore, to serve the interests of justice, the assessee should be given an opportunity to present its case before the Assessing Officer.
Key Issues
Whether the assessee should be granted an opportunity to present its case due to ex-parte orders passed by lower authorities because of unavoidable circumstances.
Sections Cited
144, 144B, 68
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: Shri Sanjay Garg & Shri Bijayananda Pruseth
Date of hearing : 07-04-2025 Date of pronouncement : 30-04-2025 आदेश/ORDER Per Sanjay Garg, Judicial Member:
The present appeal has been filed by the Assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)’] dated 01.11.2024 arising out of the assessment order passed u/s. 144 r.w.s. 144B of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2022-23.
The assessee in this case is aggrieved by the action of ld. CIT(A) in confirming the addition of Rs. 10,20,43,444/- made by the Assessing Officer u/s. 68 of the Act by treating the unsecured loans received by the assessee as unexplained cash credits and further addition of Rs. 5,40,840/- on account of disallowance of interest expenditure claimed against the said loan amount.
At the outset, the ld. counsel for the assessee has invited our attention to the impugned assessment order as well as to the order of the CIT(A) to show that the orders of both the lower authorities are ex-parte orders. The ld. counsel has further invited our attention to the relevant documents placed in the paper book to show that the director of the assessee company namely, Mahesh S Rathi was behind the bars and that Sagarmal Rathi father of Mahesh S. Rathi the other director of the assessee company was suffering from Bladder cancer during the ongoing proceedings before the lower authorities. The ld. counsel for the assessee has therefore, submitted that the non- presentation of the case of the assessee before the lower authorities was not intentional but due to the aforesaid circumstances, which were beyond the control of the directors of the assessee company. He, therefore, has submitted that the assessee may be given an opportunity to present its case before the Assessing Officer.
3.1 The ld. Departmental Representative could not rebut the aforesaid submission made by the ld. counsel for the assessee.
After going through the rival submissions, we are of the view that in this case, the interests of justice will be well served, if, the assessee is given an opportunity to present its case before the Assessing Officer. In view of this, the impugned order of the ld. CIT(A) is set aside and the matter is restored to the file of 2 Assessing Officer for de-novo assessment. Needless to say that the Assessing Officer will give proper and adequate opportunity to the assessee to present its case. The assessee is also directed to promptly participate in the proceedings before the Assessing Officer and to furnish the necessary details and evidences as and when called for and not to seek unnecessary adjournments.
With the above observations, the appeal of the assessee is treated as allowed for statistical purposes.