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Facts
The assessee filed a return for AY 2023-24. The Assessing Officer made a substantial addition under section 68 read with section 115BBE for unexplained liabilities, including sundry creditors and unsecured loans, due to lack of documentary evidence. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-compliance.
Held
The Tribunal, considering the substantial additions and the peculiar facts, found it in the interest of justice to grant the assessee one final opportunity to present their case. The impugned order was set aside, and the matter was restored to the Assessing Officer for a de novo assessment.
Key Issues
Whether the assessee should be granted a final opportunity to present documentary evidence for liabilities, despite previous non-compliance, to allow for a de novo assessment.
Sections Cited
68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: MS. PADMAVATHY S & SHRI MANU KUMAR GIRI
आदेश / O R D E R
PER MANU KUMAR GIRI, JM:
This captioned Appeal filed by the Assessee is directed against the orders of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi, [CIT(A)] dated 13.10.2025 for Assessment Year 2023-24.
Brief Facts of the case: The Assessee has filed return of income on 27.12.2023 for A.Y. 2023-24 with the total income of Rs.28,13,450/-. Notice u/s 143(2) was issued to the assessee on 19.06.2024.
The Assessee filed some details before the Assessing Officer (AO). However, in the absence of documentary evidences, regarding the sources for the liability in the form of sundry creditors was not filed and explained properly. Hence, AO made an addition of Rs. 40,81,29,055/- u/s 68 rws 115BBE of the Act.
Aggrieved, the Assessee filed an appeal before the Ld. CIT (A), NFAC, Delhi, [CIT(A)]. However, the Assessee was not able to represent before the Ld.CIT (A). Hence, no compliance was made.
Therefore, the Ld.CIT(A) vide its order dated 13.10.2025 dismissed the appeal of the Assessee.
Now, the aggrieved Assessee is in appeal before ITAT, Chennai.
At the outset, Ld.AR for the Assessee contended that the present case may be set aside to AO to produce all documentary evidences as called for by the AO. Ld.AR sought for one opportunity before the AO as the additions made are substantial. He pleaded that it would be huge hardship for the assessee if assessee is not (AY 2023-24) SARAVANAMUTHY ANBALAGAN (Vs.) ITO WARD 1 (1) SALEM given an opportunity to explain liabilities on account of introduction of capital, the introduction of unsubstantiated sundry creditors and introduction of unsecured loans.
6. Per contra, the Ld. DR supported the order and authorities below and pleaded for the dismissal of the appeal as the Assessee is habitual offender of noncompliance.
We have carefully considered the rival submissions and perused the material available on record. It is evident from the assessment order that substantial additions were made by the Assessing Officer under section 68 read with section 115BBE of the Act, on the ground that the assessee failed to furnish documentary evidence substantiating the sources of liabilities reflected as sundry creditors and other credits. Thus, the additions primarily arose due to non- compliance on the part of the assessee during the assessment proceedings. The learned CIT(A) also disposed of the appeal ex parte owing to continued non-compliance by the assessee.
Having regard to the peculiar facts and circumstances of the case and upon examination of the orders passed by the Assessing Officer and the learned CIT(A), we are of the considered view that, in the interest of justice, the assessee deserves one final opportunity to (AY 2023-24) SARAVANAMUTHY ANBALAGAN (Vs.) ITO WARD 1 (1) SALEM present its case. Accordingly, the assessee is granted liberty to appear before the Assessing Officer and to file relevant evidences, documents, and explanations in respect of liabilities arising from introduction of capital, unsubstantiated sundry creditors, and unsecured loans, in the course of de novo assessment proceedings.
In view of the above, the impugned order is set aside and the matter is restored to the file of the Assessing Officer for fresh adjudication, subject to payment of costs of Rs.10,000/- (Rupees Ten Thousand only). The said amount shall be deposited, preferably within 30 days from the date of receipt of this order, with the Tamil Nadu State Legal Services Authority, Hon’ble High Court of Madras.
Proof of such payment shall be produced by the assessee before the Assessing Officer, who shall thereafter proceed to complete the de novo assessment in accordance with law, after providing due and reasonable opportunity of being heard to the assessee.
The assessee is directed to substantiate its claims by furnishing all supporting evidence and documents without fail. In the event of further non-compliance, the Assessing Officer shall be at liberty to proceed with the de novo assessment in accordance with law.
Order pronounced on the 29th day of January, 2026, in Chennai.