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Facts
The assessee did not file an Income Tax Return for AY 2013-14, despite making a cash deposit of Rs. 53,81,650/-. The case was reopened u/s 147, and subsequently, the Assessing Officer completed the assessment ex-parte u/s 144, adding the cash deposit as unexplained money u/s 69A. The Ld. CIT(A) dismissed the assessee's appeal for non-prosecution, without addressing the legal validity of the reassessment proceedings or the merits of the addition.
Held
The Tribunal held that the CIT(A)'s dismissal of the appeal for non-prosecution, without deciding the legal grounds and merits, violated Section 250(6) of the Act. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the case back to the CIT(A) to adjudicate all issues afresh after providing a reasonable opportunity of being heard to the assessee.
Key Issues
1. Validity and limitation of the reassessment notice issued u/s 148/148A. 2. Legality of the CIT(A)'s dismissal of appeal for non-prosecution without deciding legal grounds and merits, violating Section 250(6). 3. Confirming addition of Rs. 58,33,388/- as unexplained money u/s 69A.
Sections Cited
Income Tax Act, 1961: Section 147, Income Tax Act, 1961: Section 148, Income Tax Act, 1961: Section 148A(b), Income Tax Act, 1961: Section 148A(d), Income Tax Act, 1961: Section 142(1), Income Tax Act, 1961: Section 144, Income Tax Act, 1961: Section 69A, Income Tax Act, 1961: Section 149, Income Tax Act, 1961: Section 151A, Income Tax Act, 1961: Section 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 15.05.2025 of the Ld. National Faceless Appeal Centre, Delhi [“the Ld. CIT(A)/NFAC)”] pertaining to Assessment Year (“AY”) 2013-14.
Briefly stated, the facts of the case are that the assessee had not filed her return of income for the relevant assessment year 2013-14. On the basis of AIMS module under NMS, according to it, the assessee has made cash deposit of Rs.53,81,650/- into her IDBI bank account and has failed to file return of income. The case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”) by issue of notice u/s 148 of the Act after obtaining necessary approval from the competent authority on 30.06.2021. Post the decision of the Hon’ble Supreme Court in the case of Union of India and others vs. Shri Ashish Agarwal and others and CBDT Instruction No.01/2022, dated 11.05.2022, a notice u/s 148A(b) of the Act was issued to the assessee, in response to which the assessee furnished its reply on 07.06.2022. Thereafter, an order u/s 148A(d) of the Act was passed on 21.07.2022 with the prior approval of the Pr. Chief Commissioner of Income Tax-3, Pune accorded on 20.07.2022. Accordingly a notice u/s 148 of the Act was issued and served upon the assessee on 21.07.2022. In response to the notice u/s 148 of the Act, no compliance was made by the assessee which was followed by issue of notice u/s 142(1), dated 10.01.2023 which also remained un-complied with by the assessee. Finally, a show cause notice proposing to complete the assessment u/s 144 of the Act was issued on 03.02.2023. Since there was no response filed by the assessee and in the absence of any explanation regarding the nature and source of the cash deposits, the Ld. Assessing Officer proceeded to complete the assessment u/s 144 of the Act on a total income of Rs.58,33,388/- by making an addition of the said sum as unexplained money u/s 69A of the Act.
On appeal, since there was non-compliance to the various notices issued by the Ld. CIT(A) / NFAC, he dismissed the appeal of the assessee for non-prosecution applying the decision of the Hon’ble Supreme Court in the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC) and the Delhi Bench of the Tribunal in the case of CIT vs. Multiplan India Pvt. Ltd. as reported in 38 ITD 320 (Delhi).
Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal :
1. Whether on facts and in law, the notice u/s 148 dt 21.07.2022 issued in violation of provisions of Section 151A by the jurisdictional AO is invalid and void ab initio.
2. Whether on facts and in law, the notice u/s 148 dt 21.07 2022 is barred by limitation in view of proviso to Section 149 thereby the assessment order passed u/s 147 dt 17.05.2023 is void ab initio.
3. The ld CIT(A) erred in law and on facts in confirming addition of Rs.58,33,388/- as unexplained money u/s 69A without appreciating the facts and circumstances of the case.
4. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”
The Ld. AR submitted that the assessee had challenged the validity of re-assessment proceedings before the Ld. CIT(A) / NFAC apart from challenging the addition on merits. She submitted that the case of the assessee is squarely covered by the decision of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC).
Therefore, the assessment made by the Ld. AO should be quashed. However, the Ld. CIT(A) / NFAC has not decided the legal ground raised by the assessee and dismissed the appeal for want of prosecution.
The Ld. DR on the other hand opposed the above submissions of the Ld. AR and submitted that inspite of reasonable number of opportunities provided by the Ld. CIT(A) / NFAC, the assessee remained un-complied with and therefore, the Ld. CIT(A) / NFAC was completely justified in dismissing the appeal of the assessee ex-parte for non-prosecution.
We have heard the Ld. Representatives of the parties and perused the material available on record as well as paper book filed by the Ld. AR on behalf of the assessee. We have also perused the judicial precedents cited by the Ld. AR. Admittedly, there was non-compliance by the assessee to the various notices issued by the Ld. CIT(A) / NFAC. From the perusal of the order of the Ld. CIT(A) / NFAC, we find that the Ld. CIT(A) / NFAC has dismissed the appeal of the assessee for non-prosecution applying the decisions of the Hon’ble Supreme Court in the case of CIT vs. BN Bhattacharya (supra) and the Delhi Bench of the Tribunal in the case of CIT vs. Multiplan India Pvt. Ltd. (supra) observing that “No written submission has been made by the appellant in support of the grounds taken during the appeal. It appears that the appellant is not keen to pursue the appeal and no material / argument has been brought on record by the appellant against the order of the AO's and in support of the grounds taken in appeal.” We find that the assessee has challenged the validity of re-assessment proceedings before the Ld. CIT(A)/NFAC relying on the decision of the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra). However, the Ld. CIT(A) / NFAC has passed the impugned order ex-parte qua the assessee without dwelling into merits of the issue as well as legal issue raised by the assessee. No doubt, the Ld. CIT(A) / NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. Nonetheless, he has to adhere to the legislative mandate enshrined in sub- section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reasons for the decision. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to set aside the order of the Ld. CIT(A) / NFAC and restore the same back to his file with a direction to adjudicate the issues raised by the assessee afresh by passing a speaking order as per fact and law after allowing reasonable opportunity of being heard to the assessee. The assessee is also hereby directed to submit the requisite details before the Ld. CIT(A) / NFAC on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(A)/NFAC is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 28th January, 2026.