ANSARI STEEL,RAJKOT vs. INCOME TAX OFFICER, WARD 1(1)(1), RAJKOT
Facts
The assessee's appeal for AY 2018-19 was directed against an order passed by the CIT(A) which arose from an assessment order passed by the AO. The assessee contended that they were deprived of an opportunity to present their case before the CIT(A) due to circumstances beyond their control, and that notices were not properly served.
Held
The Tribunal noted that the CIT(A) passed an ex parte and non-speaking order without granting the assessee sufficient opportunity of being heard. Citing principles of natural justice, the Tribunal held that the assessee should be granted a fair opportunity to contest their case.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex parte without providing sufficient opportunity to the assessee, and whether the additions made by the AO under section 68 and for ad hoc disallowance were justified.
Sections Cited
250, 143(3), 144B, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER
आयकर अपीलसं /ITA No.433/RJT/2025 (िनधा�रणवष� /Assessment Year: 2018-19) Ansari Steel, Income-tax Officer, Survey No.267, Plot No.2 Shapar, Ward-1(1)(1), Rajkot, New Aayakar Vs. Veraval, Rajkot-360 001 Bhavan, Vatika, Rajkot-360 001 �ायीलेखासं./जीआइआरसं./PAN/GIR No.: ABHFA0025F (Appellant) (Respondent)
Appellant by : Shri Sarju Mehta, AR Respondent by : Shri Abhimanyu Singh Yadav, Sr. DR Date of Hearing : 22/12/2025 Date of Pronouncement : 31/12/2025
O R D E R Per Dr. Arjun Lal Saini, AM: Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2018-19, is directed against the order passed under section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 23.05.2025, by the National Faceless Appeal Centre (NFAC), Delhi/ Commissioner of Income Tax (Appeals) [in short ‘Ld.CIT(A)’] which in turn arises out of an assessment order passed by the Assessing Officer (in short ‘AO’) u/s 143(3) r.w.s. 144B of the Act, dated 27.05.2021.
The grounds of appeal raised by the assessee are as follows: “1. That the appellant is deprived of the opportunity of making any submission to CIT(A) due to reasons beyond appellant’s control thereby losing the opportunity to submit arguments in detail on merit of the case to CIT(A) and thereby appeal getting disposed for want of prosecution. Even ld. AO’s action was also against the principle of natural justice resulting into having only one effective opportunity to submit any and all material and the reply during entire assessment proceeding, that too within two days of short
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period available after receipt of SCN dated 19.04.2021 (received on 22.04.2021), calling for compliance on or before 24.04.2021. 2. That the CIT Appeals has erred in law and on the facts that while disposing the appeal for want of prosecution, CIT(A) has also mentioned that the appeal is also being dismissed on merits, though it is very much evident that documents which were submitted during assessment proceeding to ld. AO justifying the creditworthiness of the lenders, upon which appeal can be decided on merits were not available to CIT(A) for making his own independent conclusion about the creditworthiness of the lenders whose granted loans is the main subject matter of the case. 3. That the CIT Appeals is not justified in upholding the action of AO in adding the aggregate amount of Rs.1,51,12,000/- to the income of the appellant in respect of unsecured loan received from three parties, namely M/s Ansari Enterprise Rs.1,12,64,000/-, Sayarabanu M. Ansari Rs.10,94,000/- and Yashmin Martuja Ansari Rs.16,87,000/- as an unexplained cash credit under section 68 of the Act by arbitrary concluding that “genuineness and creditworthiness of lender could not be established”, concluded solely on the basis of income appearing in copy of ITR of respective lenders overlooking other documents and other aspects like networth etc., which were very much justifying the genuineness and creditworthiness of the lenders. 4. That the CIT Appeals is not justified in upholding the action of AO in adding the amount of Rs.53,935/- (being as ad hoc disallowance @ 14% of Rs.3,85,253/- which is total of all expenses, except purchase expense) to the total income of the appellant as business income. 5. Your honour’s appellant reserves the right to add, alter amend withdraw any of the above grounds of appeal.”
At the outset, Ld. Counsel for the assessee assailed the impugned order by contending that assessee, could not file the details and documents before the Ld. CIT(A), during the appellate proceedings, due to circumstances beyond its control. Now, Ld. Counsel stated that assessee is ready with the documents and details and wants to submit the same before Ld.CIT(A). Learned Counsel further submits that during the appellate proceedings, notices were not served on the assessee, therefore, assessee could not appear before the ld. CIT(A), therefore, ld.CIT(A) has passed the ex parte order. The ld Counsel prays the Bench that an another
ITA No. 433/RJT/2025 Ansari Steel opportunity to contest the appeal before the First Appellate Authority may be granted to the assessee.
On the other hand, the ld. Senior DR for the revenue submitted that assessee was negligent in its approach and did not appear before the Ld. CIT(A).The ld.DR stated that cost may be imposed on the assessee, as the assessee has been negligent in pursuing the appeal before CIT(A).
We have heard both the parties and carefully gone through the submission and other materials brought on record. We note that in the assessee’s case under consideration, the assessment was carried out u/s 143(3) r.w.s 144B of the Act and the impugned order passed by the ld. CIT(A), is an ex parte order and non-speaking order, therefore, we do not wish to make any comments on the merits of the grounds raised by the assessee. Considering the above facts, we note that assessee has not given sufficient opportunity of being heard and could not plead its case successfully before the Ld. CIT(A). It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest its case. Accordingly, we hold that the interests of justice would be met, if we set aside the order of CIT(A) and remit the matter back to the file of Assessing Officer with a direction to pass fresh assessment order in accordance with law after granting adequate opportunity of hearing to the assessee. The assessee is directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the Assessing Officer by not seeking adjournment without valid reasons. Since we have remitted back the issue to the file of Assessing Officer, we do not intend to adjudicate each
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ground separately. With these directions, the grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 31/12/2025.
Sd/- Sd/- (Dinesh Mohan Sinha) (Dr. Arjun Lal Saini) �ाियक सद�/ Judicial Member लेखा सद�/Accountant Member Rajkot Date: 31 /12/2024 आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant ��थ�/ The Respondent आयकर आयु�/ CIT आयकर आयु�(अपील)/ The CIT(A) िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT गाड� फाईल/ Guard File (True Copy) By order,
Assistant Registrar/Sr.P.S/PS ITAT, Rajkot
