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Facts
The assessee, an individual and proprietor, filed an ITR declaring Rs. 2.75 lakhs. Information suggested he provided a Rs. 47 lakh cash loan via a broker, Sachin Nahar, the source of which was unexplained. The AO reopened the assessment, made an addition of Rs. 47 lakhs under Section 69A read with 115BBE, and completed assessment at Rs. 49.75 lakhs. The CIT(A) dismissed the assessee's appeal for non-compliance and sustained the addition.
Held
The Tribunal condoned the delay in filing the appeal. It found the CIT(A)'s order of dismissal for non-prosecution to be in violation of Section 250(6) of the Act, as it failed to state the points for determination and reasons. The Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication on merits, providing the assessee one final opportunity to present its case.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution and sustaining an addition of Rs. 47 lakhs without addressing the merits and without complying with Section 250(6) of the Income Tax Act.
Sections Cited
107, 148A, 151, 147, 148, 142(1), 69A, 115BBE, 144, 144B, 250(6)
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessment Year : 2017-18 Anant Bhalchandra Hendre, Income Tax Officer, 2064, Anant Beer Shopee, Gala No. 5, Panvel Mahad, Maharashtra-402301 Vs. PAN : ACCPH2501H अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Anup Shaha Department by : Shri Vidya Ratna Kishore Date of hearing : 16-12-2025 Date of 08-01-2026 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 30.08.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)/NFAC”] pertaining to Assessment Year (“AY”) 2017-18.
There is a delay of 123 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 Live Law (SC) 339, condone the said delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :-
1. On the facts and circumstances of the case and in law, it be held that assessment proceedings Initiated under section 107 of the Act on the basis of proceedings under section 148A of the Act is invalid since the Ld. AO has erred is not property adhering to the provisions of section 148A r.w.s. 151 of the Act. Accordingly, the assessment proceedings so initiated be AY 2017-18 kindly annulled and appellant be granted just and proper relief in this respect.
2. On the facts and the circumstances of the case and in law, it be held that Assessment proceedings so completed are invalid since the requisite approval under section 151 (ii) of the Act is not taken. Accordingly, the assessment proceedings so initiated be kindly annulled and appellant be granted just and proper relief in this respect.
3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming considering the facts that the case has been reopened on merely on the borrowed satisfaction and addition is made on presumptions and surmises. Accordingly, the addition so made be deleted and just & due relied be given to the appellant.
4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in confirming the addition of Rs.47,00,000/- u/s 69A ignoring the fact that the appellant has denied such transaction during assessment proceedings and no materials were provided to the appellant or opportunity was given to the appellant to cross examine 3rd party whose statement was relied upon for reopening the assessment. Accordingly, the addition so made be deleted and just & due relied be given to the appellant.
5. Without prejudice to the aforementioned grounds and on facts and in the circumstances of the case, it be held that the computation adopted by the Ld. AO is erroneous and due & just relief be given to the appellant.
6. The appellant craves to add, amend, alter or leave any of the above grounds of appeal.”
4. Briefly stated, the facts of the case are that the assessee is an individual and a proprietor of M/s. Anant Beer Shopee and also done business of Transport Contractor during AY 2017-18. For AY 2017-18, the assessee filed his return of income on 01.08.2017 declaring total income of Rs.2,75,000/-. Based on the information available with the Department that the assessee has given cash loan amounting to Rs.47,00,000/- to various parties through broker Sachin Nahar during the F.Y. 2016-17 relevant to the AY 2017-18, the source of which remained unexplained, the case of the assessee was reopened u/s 147 of the Income Tax Act, 1961 (the “Act”) by issue of notice dated 27.07.2022 u/s 148 of the Act by the Ld. Assessing Officer (“AO”) after following the due procedure as per the relevant provisions of the Act. In response to notice issued u/s 142(1) of the Act, the assessee submitted his reply along with copies of bank statements and balance sheet and furnished a copy of notarized affidavit wherein he denied having advanced cash loans to any entity through Sachin Nahar and further denied to have any knowledge about Sachin Nahar or his whereabout. Before the Ld. AO, the assessee contended that the information regarding cash loans advanced by him to various parties was wrong and misleading. However, the Ld. AO noted that as per the records available with the Department the assessee's name and PAN was reflected in AY 2017-18 the list of individuals who advanced cash loans to various parties through Sachin Nahar. Therefore, the onus was on the assessee to furnish valid explanation along with supporting documentary evidence in support of his claim, but the assessee failed to furnish any relatable evidence. As per the Ld. AO, mere denial of credible information does not change the facts and does not prove the assessee's claim or his contention as true. He, therefore issued a show cause notice to the assessee calling for reasons as to why assessment proceeding should not be completed by treating the cash loan advanced by the assessee through Sachin Nahar to the tune of Rs.47,00,000/- as undisclosed income of the assessee to be taxed as per provisions of section 69A r.w.s 115BBE of the Act. The assessee failed to respond to the said show cause notice which led the Ld. AO to opine that the assessee has no objection to the proposed variation in its total income. Due to lack of any relevant/satisfactory explanation, the Ld. AO completed the assessment u/s 147 r.w.s. 144 r.w.s. 144B of the Act vide his order dated 26.05.2023 at the total income of Rs.49,75,000/- by making an addition of Rs.47,00,000/- as undisclosed income of the assessee u/s 69A r.w.s. 115BBE of the Act, to the income of Rs.2,75,000/- originally returned by the assessee.
Aggrieved, the assessee carried the matter before the Ld. CIT(A)/NFAC. There was non-compliance by the assessee to the various notices issued by the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC therefore dismissed the appeal of the assessee for non-prosecution and sustained the addition made by the Ld. AO of Rs.47,00,000/- towards unexplained cash loan, by observing as under: “6.0. Decision and Reason The statement of fact, grounds of appeal and the order appealed against have been perused. 6.1 As mentioned in the earlier para, during the appellate proceedings five notices have been issued to the appellant from 20.06.2024 to 29.07.2024, however, the appellant did not comply to any of the five notices issued to him. It is relevant to state here that once the appeal is filed by the appellant, it is obligatory on its part to co-operatively and effectively pursue the same before the appellate authority in effective and productive manner. The facts of the instant case clearly reveal that the appellant through its repetitive non-compliance has shown complete lack of interest in pursuing the appeal. The appellant did not bother to give even the basic details in support of its claim in the appeal memo. Hence, in view of the total non-compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off as under, ex-party, primarily on the basis of documents/information available on records. 6.2 At the outset, in view of the facts of the instant case, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court which has held in the case CIT v. B. N. Bhattarcharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to "prefer an appeal" would mean effectively prosecuting an appeal." Purposefully and constructively interpreted, preferring an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray. 6.3 It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim "Vigilantibus non dormientibus jura subveniunt". It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the person making the claim, primary responsibility/onus/burden for proving the claim made before the tax onus is on and the authorities (Assessing Officers/Appellate Authorities) lies with the assessee/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal
in spite of adequate time and repeated opportunities given as brought out in the foregoing paras. 6.4 From the above discussion it is evident that the appellant has no evidence to substantiate the grounds taken in the instant appeal and it has not even once argued with any supporting, relevant and cogent arguments/averments in support of the grounds of appeal. Therefore, there is no option left with me but to go through the extremely brief non-speaking description appearing in the grounds of appeal, statement of facts filed by the appellant and the order appealed against. 6.5.1. The first and second grounds of appeal are general in nature. Therefore, these need no separate adjudication. 6.5.2. Vide third to seventh grounds of appeal, the appellant has contended that the A.O. has erred in making addition of Rs.47,00,000/- u/s.69A of the IT Act treating it as unexplained cash loan. 6.5.3. On perusal of the order appealed against, it is observed that as per information received by the A.O., during the F.Y.2016-17, the appellant had given cash loan amounting to Rs.47,00,000/- to various parties through broker. But, the appellant had filed return of income on 01.08.2017 declaring total income of Rs.2,75,000/- for A.Y.2017-18. The A.O. had found that the amount cash loan does not commensurate with the returned income shown by the appellant for only Rs.2.75,000/-. Accordingly, with due approval of the competent authority, reassessment proceedings u/s.147 of the IT Act was initiated and notice u/s.148 of the IT Act was issued on 27.07.2022. In response, the appellant had not filed the return of income. Subsequently. statutory notice u/s.142(1) of the IT Act was issued on 06.02.2023, but the appellant partly respond to the said notice. In his reply, the appellant had denied to having advanced cash loans to any entity through Sachin Nahar and further denied to have any knowledge about Sachin Nahar or his whereabout. 6.5.4. Further, as per information received by the A.O., a search action was carried out in the case of Shri Sachin Nagar on 04.08.2017 wherein Shri Sachin Nagar has admitted that various parties have given cash loans to other parties through him, since he was a broker between the parties and he has received commission for the transactions. The details of the parties who have given cash loans have been obtained and there was also mention of the parties in the seized documents. The appellant, Sri Anant Bhalchandra Hendre (PAN-ACCPH2501H) was one of the parties who had given cash loan to various parties through Shri Sachin Nahar. As per the information received, the appellant had given cash loan amounting to Rs.47,00,000/- during the F.Y.2016-17, relevant to the A.Y.2017-
18. The A.O. was not satisfied with the reply of the appellant that he had not given any cash loan to any entity through Sri Sachin Nahar. 6.5.5. Therefore, again, a letter, dt.07.03.2023 and show-cause notice, dt.03.05.2023 were issued to the appellant requesting to explain as to why the AY 2017-18 assessment should not not be completed by treating the cash loan advanced by the appellant through Sri Sachin Nahar to the tune of Rs.47,00,000/- as undisclosed income of the appellant u/s.69A r.w.s.115BBE of the IT Act. But, the appellant did not respond to the said letter and show-cause notice. 6.5.6. In absence of the required details/documentary evidence, the A.O. had treated the cash loan advanced to the tune of Rs.47,00,000/- as undisclosed income of the appellant u/s.69A of the Act and added the same to the total income of the appellant while completing the assessment u/s.147 r.w.s. 144 of the IT Act on 06.02.2023. 6.5.7. Further, during the appellate proceedings, five notices were issued to the appellant but the appellant did not comply to any of the five notices issued during the appellate proceedings. Further, the statement of facts and grounds of appeal are very brief and do not provide any evidence in support of contention made in the ground of appeal. 6.5.8. In view of the above and in absence of any argument/evidence from the appellant, I have no other option but to go along with the findings of the AO in the order appealed against. Therefore, the addition of Rs.47,00,000/- towards unexplained cash loan is hereby sustained. 6.5.9. Thus, the third to seventh grounds of appeal are dismissed. 6.6. The eighth ground of appeal is general in nature. Therefore, it needs no separate adjudication. 6.7. Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court [Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any rcasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the assessment order, as mentioned earlier, the additions/disallowances made by the AO is sustained in terms of the observations herein-above. 7.0. Thus, the appeal of the appellant is dismissed.”
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the non-appearance/non-compliance before the Ld. CIT(A)/NFAC was not deliberate. He contended that the assessee had filed all the relevant documentary evidence before the Ld. AO but he proceeded to make the assessment without examining or rebutting the evidence filed by the assessee. He submitted that before the Ld. CIT(A)/NFAC, the assessee filed synopsis of the case along with the grounds of appeal
explaining therein the facts as well as referring to various documents already filed with the Ld. AO, however, the Ld. CIT(A)/NFAC proceeded to pass the impugned order ex-parte without considering the above submissions of the assessee. He submitted that the assessee has a strong case on merits and given an opportunity the assessee is in a position to substantiate its case by filing all the requisite details/ documentary evidence before the Ld. CIT(A)/NFAC. He, therefore, prayed that in the interest of justice, the matter may be restored to the file of the AY 2017
18. CIT(A)/NFAC to decide the appeal afresh on merits, after affording an opportunity of hearing to the assessee.
The Ld. DR, on the other hand, heavily opposed the arguments advanced by the Ld. AR and submitted that despite number of opportunities granted, the assessee never bothered to make any submission before the Ld. CIT(A)/NFAC and also did not comply with the notices issued by the Ld. AO. He accordingly submitted that the order of the Ld. CIT(A)/NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee should be dismissed.
We have heard the Ld. Representatives of the parties and perused the material available on record. It is an admitted fact that despite number of opportunities granted, the assessee did not make any submission which resulted in ex-parte decision by the Ld. CIT(A) / NFAC dismissing the appeal filed by the assessee for non-prosecution. Before us, the Ld. Counsel for the assessee has pleaded that the assessee has a strong case on merits and that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(A) / NFAC. The Ld. Counsel for the assessee has contended that the Ld. CIT(A)/NFAC failed to take into consideration the submission of the assessee already available on record before him. The Ld. CIT(A)/NFAC has sustained the addition made by the Ld. AO without himself dwelling into the merits of the case. The appellate order reveals that the Ld. CIT(A)/NFAC has applied the decision of the Apex Court in the case of CIT Vs. B.N. Bhattarcharjee and Another, 10 CTR 354 (SC) dismissed the appeal of the assessee for non-prosecution. No doubt, the Ld. CIT(A)/NFAC may decide the appeal ex-parte where the assessee does not prosecute his appeal in spite of several opportunities. None-the-less, 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 reason 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 and without going into the merits of the appeal, we deem it fit and proper to set aside the impugned order of the Ld. CIT(A)/NFAC and restore the matter back to his file with a direction to decide the appeal afresh on merits, as per fact and law, after giving one final opportunity of being heard to the assessee. Needless to say, the assessee shall comply with the notices issued by the Ld. CIT(A)/NFAC and make his submissions before him on the appointed date without seeking any adjournment under any pretext, unless required for the sufficient cause, failing which the Ld. CIT(A) / NFAC shall be 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 of the assessee is allowed for statistical purposes.