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Facts
The assessee's assessment for AY 2013-14 resulted in significant additions for unsecured loans (Rs. 78 lakhs), unexplained cash deposits (Rs. 10 lakhs), and disallowance of commission expenditure (Rs. 23.58 lakhs). The CIT(A)/NFAC dismissed the assessee's subsequent appeal without condoning an 11-month delay and without adjudicating the case on merits.
Held
The Tribunal set aside the CIT(A)/NFAC's order and remanded the matter, directing the CIT(A)/NFAC to condone the delay and decide the appeal afresh on merits after providing a reasonable opportunity of hearing. The related penalty appeal under section 271(1)(c) was also restored for fresh adjudication.
Key Issues
Whether the CIT(A) erred in dismissing the appeal due to delay without condonation and without adjudicating merits; genuineness of unsecured loans and cash deposits; allowability of commission expenditure; and consequential penalty under section 271(1)(c).
Sections Cited
143(3), 68, 271(1)(c)
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 25.07.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2013-14 respectively. 2. Since identical facts and common issues are involved in both the above captioned appeals of the assessee, therefore, we proceed to dispose of the same by this common order. 3. First, we shall take up the appeal of the assessee in for adjudication as the lead case.
1. The learned CIT (A) erred in completing the Appeal appellate proceedings without adjudication of the rights and liabilities of the appellant hence. disregarding the principles of natural justice. The appellant respectfully submits that in identical set of facts and circumstances in the appellant's own case for AY 2014-15, the Hon'ble ITAT has already set aside the order of the Ld. CIT(A) for fresh adjudication on facts and merits wide order dated 13.06.2022.
2. The learned CIT (A) erred in not considering or appreciating the reasons given by the appellant in the petition for condonation of delay of the appeal file and thereby dismissing the appeal as "not maintainable".
3. That the learned CIT(A) erred in sustaining the disallowance u/s 68 on account of unsecured loans amounting to Rs.78,00,000, ignoring the submissions and evidences placed on record such as confirmation letters/ Ledger confirmation and Pan of unsecured loan creditors in support of the genuineness of the loans.
4. That the learned CIT(A) erred in sustaining the addition of cash deposits of ₹10,00,000 by treating the same as unexplained deposits despite proper explanation that the cash as per cash book was deposited into the bank for payment of commission expenses through banking channels.
5. That the learned CIT(A) erred in sustaining the disallowance of commission expenditure of ₹23,58,632/-, treating it as unexplained expenditure, despite the fact that the expenditure was duly incurred through banking channels and commission ledger and confirmation letter was produced.
6. That the learned CIT(A) erred in suo moto disallowing commission expenses incurred against earning commission income without affording sufficient opportunity to the appellant to produce supporting evidences.
7. The appellant craves leave to add, alter, amend and / or withdraw any of the ground either before or at the time of hearing, as may be necessary.
The appellant prays for admission of additional evidences if any required at the time of hearing.”
Facts of the case, in brief, are that the assessee is an individual and has furnished return of income on 30.09.2013 declaring total income of Rs.36,12,744/-. The case was selected under scrutiny through CASS. Statutory notices were issued to the assessee in response to which part compliance was made by the assessee. The assessee was specifically asked to prove unsecured loan of Rs.78 lakhs obtained from four persons, to explain the cash of Rs.10 lakhs deposited in his bank account and was also asked to furnish the details of expenditure of Rs.23,58,632/- incurred for earning the commission income of Rs.41,58,000/-. Since the assessee failed to furnish any reply to the above queries, the Assessing Officer completed the assessment proceedings u/s 143(3) of the IT Act and vide order dated 21.03.2016 determined income at Rs.1,47,71,380/- as against the income returned by the assessee at Rs.36,12,744/-. The above assessed income includes additions on account of unexplained credits/ unsecured loan Rs.78 lakhs, unexplained credits/cash deposit in bank of Rs.10 lakhs and unexplained expenditure of Rs.23,58,632/- for earning commission income.
Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Since the appeal was furnished belatedly i.e. with a delay of 11 months, Ld. CIT(A)/NFAC dismissed the appeal without condoning the delay.
It is the above order against which the assessee is in appeal before the Tribunal.
When the appeal was called for hearing neither anybody appeared from the side of the assessee nor any application for adjournment was filed by the assessee. Accordingly, we proceed to decide the appeal on the basis of material available on record and after hearing Ld. DR.
We have heard Ld. DR and perused the material available on record. In this regard, we find that Ld. CIT(A)/NFAC has dismissed the appeal without condoning the delay. We also find that the grounds raised
by the assessee were not adjudicated and the appeal was dismissed summarily.
10. Considering the totality of the facts of the case and in the interest of justice, we deem it fit to set-aside the order passed by Ld. CIT(A)/NFAC and remand the matter back to the file of Ld. CIT(A)/NFAC with a direction to condone the delay and decide the appeal afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and to produce relevant submissions, documents and evidences in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate orders as per law. Thus, the ground no.1 & 2 raised by the assessee are allowed for statistical purposes. Since the matter has been remanded back to the file of Ld. CIT(A)/NFAC for deciding the appeal afresh as per fact and law, the grounds related with merits of the case becomes infructuous hence not adjudicated.
12. Since we have already restored the appeal against quantum assessment order to the file of Ld. CIT(A)/NFAC for de novo adjudication, the instant appeal involving the issue of penalty u/s 271(1)(c) of the IT Act for the same assessment year is also restored back to the file of Ld. CIT(A)/NFAC to decide the same afresh and