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Facts
The assessee is aggrieved by the order of the CIT(A) which dismissed their first appeal. The assessment order was passed ex-parte under section 144 of the Income Tax Act, 1961, due to the assessee's non-compliance and non-filing of the return. Additions were made under section 69A for cash deposits and other bank credits.
Held
The Tribunal noted that the CIT(A) dismissed the first appeal due to the appellant's non-compliance and failure to provide substantiating evidence. The Tribunal found that the assessment order was not adjudicated on merits and therefore set aside the impugned order.
Key Issues
Whether the CIT(A) order was justified in dismissing the appeal without adjudicating on merits due to non-compliance, and if the matter should be remanded for fresh adjudication.
Sections Cited
253, 144, 69A, 246A, 142(1), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
the order bearing Number:-ITBA/NFAC/250/2023- 24/1055303221(1) dated 22/08/2023 passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after referred to as the “Impugned order”. The Relevant Assessment year is Page 1 of 10
Factual Matrix 2.1 That as and by way of an Assessment order made u/s 144 of the Act, the total income of the Assessee was computed & assessed at Rs. 6,92,65,359/-. Income Tax Return was not filed. The addition of Rs 13,50,000/- was made u/s 69A of the Act as per para 7.3 of the aforesaid Assessment order. Further Addition of Rs. 6,79,15,359/- too was made u/s 69A as per para 7.4 of the aforesaid Assessment order. That the aforesaid Assessment order bears No.:-ITBA/AST/S/144/2019-20/1021677272(I) and that the same is dated 04/12/2019 which is herein after referred to as the “impugned assessment order”
2.2 That the assessee being aggrieved by the aforesaid “impugned assessment order” prefers the first appeal u/s 246A of the Act before the Ld. CIT(A) who by the “impugned order” has dismissed the first appeal of the assessee on the grounds and reasons stated therein. The Page 2 of 10
“5.1 It is pertinent that in order to decide this appeal in a timely manner a number of notices/ communications through ITBA portal were sent to the appellant, viz. Communications dated 02.03.2021, 26.07.2023, 04.08.2023 and 11.08.2023. However, there evidently has been no response from the appellant till date. There is no gain saying that once the appeal is filed by the appellant, it is obligatory on its part to purposefully and co-operatively pursue the same in a worthwhile manner, which the appellant has evidently failed to do. It clearly appears that the appellant's compliance or rather lack of it, the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid 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-parte, primarily on the basis documentation available on record. 5.4 It is, thus, evident that the appellant has no evidence to substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to, therefore, go through the extremely brief non- speaking submission filed along with the impugned appeal to decide on the merits while adjudicating the same. 5.5 The appellant is a non-filer of Return of Income for A.Y. 2017- 18. The Department was in possession of information that the appellant has deposited cash amounting to Rs. 13,50,000/- during the demonetization period of F.Y. 2016-17. Accordingly, statutory notices were issues u/s. 142(1). The appellant failed to reply to notices issued and hence the AO completed the scrutiny assessment to be best of his judgement u/s. 144 of the Act and passed order dated 04.12.2019 after making addition of Rs. 6,92,65,359/- on account of the following :- i) Cash Deposits during demonetization added u/s. 69A of the Act Rs. 15,50,000/- ii) Other credits in Bank Account added u/s. 69A of the Act Rs. 6,79,15,359/- Total Disallowances Rs. 6,92,65,359/-
5.6 It is pertinent to note that even during the instant appellate proceedings, the appellant had chosen to remain silent and failed to substantiate or cooperate by filing the details called for, which shows the appellant is not interested in pursuing his appeal. However, it was noted that despite several opportunities were Page 3 of 10
Shri Ram Construction A.Y.2017-18 given to the appellant, he has not responded for the reasons best known to him. Needless to mention that in order to prove his point, the appellant has to substantiate and back his point by providing relevant details, which he has failed to do so. 5.8 In view of the above, in the pertaining and circumstances of the case, I find no infirmity in the action of the AO for making an addition of Rs. 6,92,65,359/- on account of the following :- 1) Cash Deposits during demonetization added u/s, 69A of the Act Rs. 15,50,000/- ii) Other credits in Bank Account added u/s. 69A of the Act Rs. 6,79,15,359/- Total Disallowances Rs. 6,92,65,359/-
In this view of the matter, the decision of the AO is upheld. Consequently, the Grounds of the appellant are dismissed.
5.9 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 reasonable, 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.
In the result, the appeal of the appellant is dismissed.”
2.3 That the assessee being aggrieved by the “impugned order” has preferred the instant second appeal before this tribunal and has raised the following grounds of appeal in the form no. 36 against the “impugned order” which are as under:-
“1.Ground 1- That in the facts and circumstances of the case and in the interest of justice, kindly remand the matter back to the CIT(A) to decide the appeal afresh on the merits of the case as per the grounds contained in the memorandum of appeal after allowing reasonable opportunity to the appellant to represent its case. 2.Ground 2- That the Assessment Order u/s 144 dated 04/12/2019 be held to be bad in law and on facts and be quashed.
3.Ground 3- That the addition of Rs. 13,50,000/- and also the addition of Rs.6,79,15,359/- made u/s 69A both totalling to Rs.6,92,65,359/- made in the case of the appellant be held to be bad and unjustified and be deleted. Ground 4- It be held that when the bank account number 383701010036203 with Union Bank of India was being maintained in the books of Shri Ajit Raghuwanshi and the same had been accepted through scrutiny assessment in his case, the credits in the said bank account cannot be made the basis for assessment in the case of the appellant. The additions made in the case of the appellant on the basis of said bank account be therefore quashed and deleted. 5.Ground 5- In the alternative and without prejudice to the grounds stated above, the addition made and assessed as income of the appellant in the relevant year be held to be high, unreasonable and unjustified and be suitably reduced. Ground 6- The appellant craves leave to add, amend OR alter any Ground of Appeal before OR during the course of appellate proceedings.”
Record of Hearing 3.1 The hearing in the matter took place on 09/02/2026 when the Ld. AR for & on behalf of the Assessee appeared before us & interalia contended that the “Impugned Order” is bad in law, illegal & not Proper. It is in the violation of the principles of natural justice. It therefore deserves to be set aside. It was next contended that the registry has pointed out the delay of 576 days in filling the Instant second appeal.
It was submitted that the “impugned order” is dated 22/08/2023 and the instant appeal ought to have been filed on or before 22/10/2023. However the instant appeal was Page 5 of 10
Shri Ram Construction A.Y.2017-18 filed on 29/05/2025. A condonation of delay application is placed on record of this tribunal. With regard to delay it was submitted that the during the first Appellate Proceedings before the Ld CIT(A) the hearing notice(s) were sent to the e- mail Id: surabhi13041993@gmail.com. This email Id although registered on the Income tax portal does not belong to the Assessee. This email Id pertained to the article assistant of the chartered accountant who had assisted CA of the Assessee in filing of the Income Tax Returns.
After Completing her article-ship the said article assistant Ceased to be associated with the concerned CA office.
Consequently the hearing Notice(S) and the order u/s 250 were sent to an email Id that was neither controlled nor monitored by the Assessee hence the assessee never received the same. Further the “impugned order” was not Received by Post also. Further the erstwhile counsel of the Assessee Late Shri Ashwini Rinwa expired on 22/11/2024 and after his demise the Assessee engaged another Counsel to Ascertain the Status of the appeal filed against order it was only then that the Assessee became aware of the “impugned
Shri Ram Construction A.Y.2017-18 order” passed u/s 250 of the Act. The sudden demise of the erstwhile Counsel followed by the Process of engaging a new counsel also added to the delay in filling of the appeal. It was therefore submitted that the delay is not due to any malafide fault of the Assessee. It was prayed that the delay be condoned. Per contra the Ld. DR appearing for and on behalf of the Revenue submitted that the Income Tax Dept leaves the issue of Condonation of delay to the wisdom of this tribunal after hearing both the parties on the delay we condone the delay as sufficient cause is demonstrated before us. Appeal admitted and taken up for hearing.
3.2 The Ld. AR for the Assessee then submitted before this tribunal that no compliances to any of the notices could be made before the Ld AO who had passed the impugned Assessment order as partnership firm was dissolved in the AY14-15. Insofar as the “Impugned Order” of the ld CIT(A) is concerned it was submitted that in the form 35 email id was ajeetro856@gmail.com whereas notice(s) in the first Appellate proceedings went at e-mail id surabhi13041993@gmail.com which was created by article
Shri Ram Construction A.Y.2017-18 clerk of CA as stated earlier. It was stated that Assessee has a good case on merits too and if one more opportunity is provided before the ld. AO the Assessee would comply and make necessary submission on merits of the case. Per contra the ld DR for the revenue submitted that dept of income tax has no objection if the liberty is given to the assessee to present his case on merits before the ld AO a fresh . Hearing was then concluded.
Observations Findings & conclusions 4.1 We now have to decide the legality validity and the proprietary of the “Impugned Order” basis records of the case and Rival Contentions canvassed before us.
4.2 We have carefully perused the records of the case and have heard the submissions.
4.3 We basis records of the case & after hearing & upon examining the rival contentions of the Ld. AR & the Ld. DR canvassed before us, are of the considered opinion that “impugned assessment order” is under section 144 of the Page 8 of 10 This tribunal desires that the total income of the Assessee should be computed and assessed on the real time basis exigible to tax in accordance with law by following the due process of law under the Act. This Tribunal so expects the Assessee to be compliant and should co operate with the Dept as when notice(s) etc are issued. In brief this tribunal desires the meritorious disposal of both the “Impugned Assessment order” as well as the “Impugned order”. In the result we are of the considered opinion that the “Impugned Order” should be set aside and the matter should be remanded back to the file of the ld AO for passing a fresh order on the merits of the case . It is the expectation of this tribunal that the Assessee would give his full and complete details including latest e-mails of his and his counsel where the notices could be served effectively by the Department. The Assessee to attend hearings as and when fixed and file reply and details as sought by the ld AO well within time.
Shri Ram Construction A.Y.2017-18 4.4 In view of the above, we set aside the “Impugned Order” and remand the case back to the file of the ld AO on Denovo basis who shall now pass a speaking and well reasoned Order.
5 Order 5.1 In the result the “Impugned order” is set aside as and by way of remand back to the file of the Ld. AO.
5.2 In the result, Appeal is allowed for statistical purpose.
Pronounced in open court on 27.02.2026.