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Facts
The assessee, M/s. Malabar Erectors, failed to file their return of income for AY 2015-16. The Assessing Officer (AO) re-opened the case based on information about cash deposits, rent, and contract receipts, making additions for undisclosed business income, rent, and unexplained cash deposit. The CIT(A) confirmed these additions. The assessee appealed against this order.
Held
The Tribunal noted a delay in filing the appeal, which was condoned due to sufficient cause. The assessee submitted additional evidence, including financial statements and past turnover details, citing the death of a partner and disruption of business. The Tribunal found that this additional evidence required verification by the AO.
Key Issues
Whether the assessee has provided sufficient evidence and if the case needs to be remitted to the AO for fresh assessment considering the additional evidence.
Sections Cited
139, 147, 144, 194A, 194C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI ABY T VARKEY & SHRI S.R.RAGHUNATHA
आदेश /O R D E R PER S. R. RAGHUNATHA, AM :
The aforesaid appeal and stay application filed by the assessee arises out of the order dated 17.08.2025 of the learned Commissioner of Income Tax (Appeals), NFAC, Delhi, (in short “ld.CIT(A)”) for the assessment year (A.Y.) 2015-16.
At the threshold, we observe that there is a delay of 40 days in filing of the present appeal by the assessee. The partner of the assessee firm furnished
:-2-: ITA. No:3775/Chny/2025 & S.A. No.125/Chny/2025 an affidavit explaining that the said delay occurred on account of medical reasons of his mother after the demise of his father. Upon perusal of the affidavit and after affording due opportunity of hearing to both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.
Brief facts of the case emanating from the records are that the assessee is a firm carried on the business of fabrication and installation contract, had not filed his return of income either u/s.139 or 148 of the Act for A.Y.2015-16. Based on the information available with the department, the Assessing Officer noticed that the assessee has made cash deposits to the tune of Rs.14,00,000/- into his bank account, Rent on plant and machinery of Rs.5,00,000/- (As per section 194I(a) – TDS return 26Q) and received contract receipts of Rs.4,29,90,417/- (As per TDS return – 194C) during the A.Y.2015-16. Hence, the case was re- opened u/s.147 of the Act and the Assessing Officer issued statutory notices and called for details, but the assessee failed to respond to any of the notices. Since the assessee did not participate in the assessment proceedings, the Assessing Officer concluded the assessment u/s.144 r.w.s 147 of the Act on 23.03.2022 by making the following additions: - Undisclosed business income @ 8% of contract receipts 34,39,234/- - Rent on plant and machinery 5,00,000/- - Unexplained cash deposit 14,00,000/-
Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC on 29.04.2022.
At the outset, we observed that ld.CIT(A) has confirmed the additions made by the Assessing Officer stating that the assessee has not produced any cogent evidence in support of the grounds raised. The ld.CIT(A) has stated that
:-3-: ITA. No:3775/Chny/2025 & S.A. No.125/Chny/2025 the assessee has not produced any comparative data of past year results were furnished in support of the claim of reduction in estimated profit. Hence, the ld.CIT(A), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an order dated 17.08.2025. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.
before us, the ld.AR for the assessee submitted that the assessee has maintained proper books of accounts in Tally software. The entire business operation and administration under the control of partner late Mr.MC Mohammed Haneefa, who died after the prolonged terminal disease on 24.12.2022 and disturbed the entire management of business. Therefore, the assessee could not comply properly both before Assessing Officer as well as the ld.CIT(A). The ld.AR filed a petition under Rule 29 of the Tribunal Rules for admission of additional evidence and filed the Financials like Balance Sheet, Profit and Loss Account as on 31.03.2015, mother medical report. Further, the ld.AR also submitted a details of turnover, profit and its percentage to the turnover for the A.Y. 2012-13 to 2015-16. In view of the above, the ld.AR prayed to consider the documents submitted and allow the grounds of appeal of the assessee.
Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent and nothing prevented them to furnish these additional evidence before the lower authorities and hence prayed for confirming the order of the ld.CIT(A).
We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities along with additional evidence filed by the ld.AR. We note that the AO has passed an ex-parte order by considering the information available with the department and the same has been confirmed by the ld.CIT(A), NFAC due to non-production of the credentials
:-4-: ITA. No:3775/Chny/2025 & S.A. No.125/Chny/2025 in claim of the grounds of appeal filed by the assessee. We find that the additional evidence provided by the assessee needs verification by the Assessing Officer and hence, we are of view that the assessee needs to be given one more opportunity before the Assessing Officer.
In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after considering the additional evidence provided by the assessee after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. Hence, the appeal filed by the assessee is allowed for statistical purposes
Since we have decided the main appeal, the corresponding S.A.No.125 /Chny/2025 is dismissed as infructuous.
In the result, appeal filed by the assessee in ITA No.3775/Chny/2025 is allowed for statistical purposes and the Stay Application filed by the assessee in S.A.No.125/Chny/2025 is dismissed as infructuous.
Order pronounced in the open court on 02nd February, 2026 at Chennai.
Sd/- Sd/- (एबी ट� वक� ) (एस. आर. रघुनाथा) (ABY T VARKEY) (S. R. RAGHUNATHA) �या�यक सद�य/Judicial Member लेखा सद�य/Accountant Member चे�नई/Chennai, /दनांक/Dated, the 02nd February, 2026 SP
:-5-: ITA. No:3775/Chny/2025 & S.A. No.125/Chny/2025 आदेश क+ (�त1ल2प अ3े2षत/Copy to: 1. अपीलाथ'/Appellant 2. ()यथ'/Respondent 3.आयकर आयु4त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 2वभागीय (�त�न�ध/DR 5. गाड% फाईल/GF