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Facts
The assessee filed an appeal against an assessment order that made additions to their income. The CIT(A) dismissed the appeal for non-prosecution after the assessee allegedly failed to comply with notices. The assessee claimed to have uploaded submissions, but faced portal issues.
Held
The tribunal noted that the CIT(A) did not adjudicate the merits of the case due to the assessee's alleged non-compliance, violating the principles of natural justice as the assessee was not heard. The tribunal restored the matter to the CIT(A) for fresh adjudication.
Key Issues
Whether the appeal was wrongly dismissed in limine by the CIT(A) without adjudicating the merits, thus violating principles of natural justice.
Sections Cited
143(3), 144B, 271B, 44AB, 270A, 234B, 234D, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI PRABHASH SHANKAR
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER Assessment Year: 2022-23 Hemant Prabhakar Sonar Assessing Officer DCIT 1 B, 31/32 Sea Hill Union Park Khar 17(1) Mumbai Vs. Pali Hill, Kautilya Bhawan, Mumbai Mumbai - 400052 PAN: AAIPS8971N (Appellant) (Respondent) Present for: Assessee by : Shri Jay Shah, Adv. Revenue by : Shri Hemanshu Joshi, Sr.DR Date of Hearing : 07.01.2026 Date of Pronouncement : 27.01.2026 O R D E R Per : Prabhash Shankar, [A M]:
The present appeal has been filed by the assessee which emanates from the appellate order passed by the Ld. CIT(A)/National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as “CIT(A)”] with regard to the assessment order passed under section 143(3) r.w.s. 144B of the Income Tax Act 1961, (in short ‘the Act’) dated 19.03.2024 A.Y. 2022-23.
The Assessee has raised following grounds of appeal :
“Addition of ₹35,58,338/- as Business Income a. On the facts and in the circumstances of the case, and in law, the Hon'ble Commissioner erred in confirming the addition of ₹35,58,338/- to business Hemant Prabhakar Sonar income, made by the AO on the ground of under-reporting of turnover, without appreciating that the alleged difference arose due to inclusion of: i. Recovery from past year debtors ii. GST collected on sales iii. TDS amounts received from customers b. The Appellant submitted a detailed reconciliation and evidence showing that the reported turnover of ₹9,06,88,403/- as per books and GSTR-9 was correct and the difference was due to timing and classification of receipts. c. The addition is unjust, lacks factual and legal basis, and deserves to be deleted.
2. Initiation of Penalty Proceedings under Section 271B a. The Hon'ble Commissioner erred in confirming initiation of penalty proceedings u/s 271B, without appreciating that the Appellant's turnover was below 10 crore and his aggregate cash receipts and cash payments were well below 5% of the total. b. The Appellant was thus eligible for exemption from tax audit under the proviso to Section 44AB as amended by the Finance Act, 2020 and applicable to A.Y. 2022-23. c. Hence, there was no default under Section 44AB and the penalty initiation under Section 271B is unjustified and bad in law.
3. Initiation of Penalty Proceedings under Section 270A a. The initiation of penalty under Section 270A on alleged under-reported income of ₹35,58,338/- is untenable, as the income addition itself is based on misinterpretation of receipts and not on any misstatement or suppression.. b. The appellant acted bona fide and maintained books of accounts; hence, no penalty under section 270A is warranted.
4. Levy of Interest under Section 234B and 234D a. The learned AO erred in levying interest of ₹1,49,520/- u/s 234B and. *47,257/- u/s 234D without properly considering the nature of additions and advance tax already discharged by the Appellant. b. In view of the erroneous addition and bona fide conduct of the Appellant, interest may kindly be recomputed or deleted.
Denial of Natural Justice Submissions Ignored Hemant Prabhakar Sonar a. The Hon'ble Commissioner erred in passing the appellate order ex parte despite the Appellant having uploaded full written submissions and evidence on the portal within the extended timeline (Ack. No. 225865931010725 dated 01.07.2025). b. No opportunity was granted to clarify or rectify portal glitches for later replies attempted after 08.09.2025. c. The appellate order, having failed to consider written replies on merit, is in gross violation of principles of natural justice and liable to be set aside”
Briefly stated facts of the case are that the assessee filed his return declaring total income at Rs. 26,29,180/- and assessment was made u/s 143(3) of the Act determining income of Rs. 62,29,886/-by making certain additions. Against the order, the assessee filed appeal. According to the appellate order, notices u/s 250 of the Act were issued to the appellant electronically in E- proceeding/ITBA facility on as many as 4 occasions which however, remained non complied. Therefore, the ld.CIT(A) concluded that the assessee had no evidence to substantiate the grounds taken. Consequently, the appeal was dismissed in limine on account of non-prosecution.
Before us,the ld.AR has made a request for restoration of the appeal before the ld.CIT(A) and for giving one more opportunity to the assessee in the interest of justice.The ld.DR did not oppose this request.
5. It is evident that the ld.CIT(A) has not adjudicated merits of the case mainly non account of repeated non-compliance by the assessee, thus upholding the additions made by the AO. However, the fact remains that the assessee was not heard. Therefore, substantive adjudication of the issues could not be done by him. In the grounds of appeal, we find that the assessee has raised various grounds of appeal challenging the impugned additions. In our 5.1 In the light of above observations and in the substantial interest of justice, we set aside the appellate order and restore the entire matter back to the ld.CIT(A) for passing the appellate order de novo. In case of any failure on the part of the assessee, he would be at liberty to pass order after considering the materials on record. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld.CIT(A).
In the result, the appeal is allowed for statistical purposes,
Order pronounced in the open court on 27.01.2026.