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Facts
The assessee company filed a return admitting a loss. During the assessment, the AO added back an unsecured loan of Rs. 1,45,75,891/- as unexplained cash credit under section 68 of the Act. Both the assessment order and the CIT(A) order were passed ex parte.
Held
The Tribunal held that both the assessment and appellate orders were passed ex parte, and the assessee was not afforded a reasonable opportunity of being heard, violating the principles of natural justice.
Key Issues
Whether the assessee was provided with a reasonable opportunity of being heard during the assessment and appellate proceedings, and if not, whether the matter should be remanded.
Sections Cited
68, 250, 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI MAKARAND VASANT MAHADEOKAR
Tara Hospitality Private vs Income Tax Officer 15(3)(1), Limited Mumbai Office No.A-112 Plot No.53, Room No.456 Aayakar Bhawan, Sector-15CBD Belapur Navi M.K. Road, Mumbai-400020 Mumbai-400614 PAN:AAECT7774K APPELLANT RESPONDENT Assessee by : Shri Satyaprakash Singh, CA Respondent by : Shri Ritesh Misra (CIT DR) Date of hearing : 28/01/2026 Date of pronouncement : 30/01/2026 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi (for brevity ‘the ld. CIT(A), order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2018-19, date of order 19.09.2025. The impugned order emanated from the order of the National eAssessment Centre, Delhi (for brevity the “Ld. AO”), order passed under section 144 r.w.s. 144B of the Act date of order 23.04.2021.
We heard the rival submission and considered the documents available in the record. The assessee company filed the return by admitting loss amount of Rs.6,85,303/-. The assessment proceeding was initiated. During the assessment Ld. AO found in column no.31(a) of the audit report for form no.3CD that assessee has taken loan from three different parties amount of Rs.1,45,75,891/-. But finally the assessment order was passed ex parte and the unsecured loan amount of Rs.1,45,75,891/- was added back as unexplained cash credit u/sec. 68 of the Act. Aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) passed an order ex parte and uphold the impugned assessment order. Being aggrieved assessee filed an appeal before us.
During the assessment proceedings, the assessee did not get opportunity to submit any of the documents relied upon in relation to the addition made on account of the loan under section 68 of the Act. During the appellate proceedings, the Ld. CIT(A) granted four opportunities of hearing. Out of these four dates, the assessee sought adjournment on two occasions. However, on the remaining two hearing dates, there was no response from the assessee. Accordingly, the appellate order was passed ex parte. In our considered view, it is evident that the appellate & assessment orders were passed ex parte and that the assessee was not afforded a reasonable opportunity of being heard. The denial of such opportunity amounts to a violation of the principles of natural justice. Therefore, we consider it appropriate to restore the matter to the file of the Ld. AO for adjudication de novo, after granting the assessee a reasonable opportunity of being heard. The assessee shall also be permitted to file any additional evidence relevant to the appeal proceedings. We make no observation on the merits of the Tara Hospitality Pvt. Ltd. case, so as to avoid causing any prejudice in the fresh proceedings. The assessee is directed to cooperate and be diligent during the remand proceedings to enable expeditious disposal of the assessment.