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Facts
The assessee, a partnership firm trading liquor, faced an addition of Rs. 2.94 crores under Section 68 for unexplained credit related to loan transactions during scrutiny. The CIT(A) dismissed the appeal without adjudication, citing non-compliance and lack of evidence regarding the creditworthiness and genuineness of these loan transactions. The assessee contended that proper opportunity was not given, and notices were sent to an old counsel's email ID who did not inform them.
Held
The Tribunal found it unclear whether proper notices were served by the CIT(A). In the interest of justice, the matter is remanded back to the CIT(A) to provide the assessee one more opportunity to furnish documentary evidence and prove the identity, genuineness, and creditworthiness of the loan transactions. The Tribunal did not express any opinion on the merits of the case.
Key Issues
Whether the CIT(A) provided sufficient opportunity of hearing to the assessee; and whether the addition made under Section 68 for unexplained credit (loan transactions) was justified without proper verification of identity, genuineness, and creditworthiness of loan creditors.
Sections Cited
250 of the Act, 1961, 144 of the Act, 144B of the Act, 68 of the Act, Rule 34(4) of the Income Tax Appellate Tribunal Rules 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
ORDER Per: Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of ld. CIT (A), NFAC, Delhi, passed u/s 250 of the Act, 1961 vide order dated 16.01.2025 which has emanated from the order of AO, NFAC, Delhi, passed u/s 144 r.w.s. 144B of the Act, vide order dated 04.06.2021.
The assessee has taken four grounds of appeal in Form No. 36 and all of them relates to the issue of non-receipt of notice of hearing from the office of the ld. CIT(A) and dismissal of the appeal by the first appellate authority without adjudicating on the grounds contained in the memorandum of appeal in Form 35.
Brief facts of the case are that the assessee is a partnership firm engaged in the business of trading of liquor and the return filed was subjected to scrutiny and in course of scrutiny proceedings loan transactions were not proved to the satisfaction of the AO, resulting in an addition of Rs.2.94 crores on account of unexplained credit u/s 68 of the Act.
Before the first appellate authority there has not been any compliance to various notices issued and in absence of any proper explanation with supporting evidence, the appeal has been dismissed for want of creditworthiness and genuineness of the loan’s transactions.
Now the assessee is before the Tribunal stating that proper and sufficient opportunity has never been allowed by the first appellate authority for representing the case.
There was no appearance before the tribunal by the assessee or his counsel in spite of repeated calls, but the assessee has filed a written submissions alongwith an affidavit from one of the partners Mr. Harpal Singh, where it has been explained that no compliance to notice issued under the Act, could be made because notices has been served on the e-mail id of his earlier counsel Mr. A.K. Randhawa, CA on the e- mail id akscompany01@gmail.com, and the said person has not intimated the assessee. As such, he requested for one more opportunity of hearing so that he can furnish the documentary evidences in support of his contention contained in the grounds of appeal
and can prove the identity, genuineness and creditworthiness of the loan creditors.
7. The ld. DR relied on the order of the ld. CIT(A) but have no objection if the matter is remanded back to the file of the ld. first appellate authority for fresh consideration of documentary evidences to be filed.
8. We have considered the materials on record and the written submissions filed by the assessee and we are of the opinion that it is not ascertainable from the order of the ld. first appellate authority regarding the issue and service of notice on the assessee and it is also not understood as to whether notices has been issued in the e- mail id as mentioned in Form 35. 8.1 As such, we are of the opinion that in the interest of justice one more opportunity should be provided to the assessee to furnish all documentary evidences in order to explain and prove the identity, creditworthiness and the genuineness of the loan transactions to the satisfaction of the first appellate authority.