GANGARAM SUKHDEO CHAVAN,MUMBAI vs. ASST. COMMISSIONER OF INCOME TAX CIRCLE 29(1), MUMBAI
What did the Tribunal hold?
The Tribunal, finding that the CIT(A) had dismissed the appeal ex parte due to the assessee's non-compliance, decided to give the assessee one more opportunity to present their case. The matter was restored to the file of the CIT(A) for fresh adjudication.
What were the facts?
The assessee filed an appeal against the order of the CIT(A) which dismissed the appeal ex parte. The AO had made additions on account of negative cash balance and disallowances under Section 40A(3). The assessee contended that the CIT(A) erred in dismissing the appeal without proper consideration.
What were the issues?
Whether the CIT(A) was justified in dismissing the appeal ex parte without providing an opportunity to the assessee to present their case.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI JAGADISH
Aforesaid appeal filed by the assessee for Assessment Year (AY) 2013-14 arises out of the order of Ld.Commissioner of Income Tax (Appeals) [hereinafter CIT(A)], National Faceless Appeal Centre (NFAC), Delhi dated 25.06.2025 u/s 143(3) of Income Tax Act,1961. The assessee has filed this appeal with following grounds of appeal:-
"1) On the facts and circumstances of the Learned Assistant Commissioner has erred in determining the total Income of Rs11207560. The determination of the total income is not justified. 2) On the facts and circumstances of the case the Learned Assistant Commissioner has erred is disallowing Negative Cash Balance Rs 937206 and Gangaram Sukhdeo Chavan, Mumbai disallowance u/s 40A(3) Rs 2334911. The appellant submits that disallowance is not justified and against the facts and circumstances of the case. 3) The Learned Officer has erred in Levying interest U/s 234B at Rs 400896 and interest u/s 234C at Rs 20030. The appellant denies the liability of the payment of interest u/s 234 B and interest u/s 234C on the facts and circumstances of the case. The appellant submits that levy of interest and u/s 234B Rs 400896 and u/s 234C Rs 20030 is not justified and be deleted. 4) The order passed by the Assessing officer is bad in law and against the facts and circumstances of the case. 5) The appellant craves leave to add alter or amend the grounds of appeal which are without prejudice to one other."
2. The brief facts of the case are that the assessee is individual and filed his return of income for Assessment Year (AY) 2013-14 on 28.09.2013, declaring total income of Rs.79,35,440/-.
3. The Assessing Officer (AO) passed the assessment order u/s. 143(3) of the Act on 07.03.2016, making addition on account negative balance in Cash Book of Rs.9,37,206/- and disallowances of Rs.23,34,911/-. u/s 40A(3) of the Act .
On appeal the Ld. CIT (A) dismissed the appeal ex parte as assessee has not made any submission in response to notices issued.
The Ld. Authorised Representative (AR) at the outset has submitted that the Ld. CIT (A) has decided the appeal ex parte and therefore one more opportunity may be provided to substantiate his case before the Ld. CIT (A).
The Ld. Departmental Representative (DR) submitted that appeal may be dismissed as assessee has not been compliant.
We have considered the rival submissions and perused the material available on the record. The Assessing Officer (AO) has made the addition of Rs.9,37,206/-on account of negative balance in cash book and disallowance of Rs.23,34,911/-u/s Gangaram Sukhdeo Chavan, Mumbai 40A(3) of the Income Tax Act, 1961. The Ld. CIT (A) has dismissed the appeal ex parte as assessee has not made any submission. We are of considered opinion that the assessee should be given one more opportunity before the Ld CIT(A) to substantiate his case. We, accordingly restore the matter back to the file of Ld. CIT (A) for fresh adjudication after considering the submission of the assessee. The assessee is directed to comply with the notices issued by the Ld. CIT (A) without fail.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced on 21st day of January, 2026 at Mumbai.
More judgments on Section 40A(3)
- Rekha Agarwal, Jaipur vs ITO WD 4(1), JaipurITA 844/JPR/2025[2021-22]Status: Disposed21 Oct 2026AY 2021-22
- Infra Developers, Shivpuri vs Income Tax Officer, AshoknagarITA 454/AGR/2026[2014-15]Status: Disposed16 Oct 2026AY 2014-15
- Saiyed Zaharul Alam, Murshidabad vs I.T.O., Ward - 42(1), MurshidabadITA 2233/KOL/2026[2013-2014]Status: Disposed16 Oct 2026AY 2013-2014
- M/S Sadana Electric Store, Lucknow vs DCIT Range-6, LucknowITA 283/LKW/2024[2014-15]Status: Disposed30 Sept 2026AY 2014-15
- Nagendra Prasad, Patna vs ITO Ward -5(3) Patna, Dak BanglowITA 362/PAT/2026[2016-17]Status: Disposed29 Sept 2026AY 2016-17
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