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Facts
A search and seizure operation led to the discovery of documents related to unsecured loans. The assessee had given unsecured loans to entities linked to the P.N. group. Following this, the assessment was reopened, and the total income was assessed at Rs. 5,80,91,518/-. The CIT(Appeals) dismissed the assessee's first appeal ex parte.
Held
The Tribunal noted that the CIT(Appeals) passed an ex parte order without discussing the merits of the case, which is against the spirit of Section 250(6) of the Act. The Tribunal found it just and proper to remit the matter back to the CIT(Appeals).
Key Issues
Whether the CIT(Appeals) erred in dismissing the appeal ex parte without considering the merits, and whether principles of natural justice were violated.
Sections Cited
132, 147, 148, 143(2), 142(1), 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI S. RIFAUR RAHMAN & SHRI SUNIL KUMAR SINGH
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
This appeal has been preferred by assessee against the impugned order dated 18.07.2025 passed in Appeal No. NFAC/2019-20/10467367 by the Ld. Commissioner of Income-tax (Appeals), NFAC, Delhi u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2020-21, wherein the ld. CIT(Appeals) has dismissed assessee’s first appeal ex parte.
Brief facts state that the assessee filed return of income for A.Y. 2020- 21, declaring total income of Rs.6,15,630/-. A search and seizure operation u/s. 132 of the Act was carried out in the case of P.N. (Prem Nagar) group (belong to Rathore family) on 09.01.2020. During the operation, various incriminating documents regarding unsecured loan were seized. From the seized documents, it was revealed that the assessee has given unsecured loan of Rs.20 lacs to the entities related to P.N. group (Ghanshyam Rathore).
It was further noticed that the cash was deposited in assessee’s bank account and immediately transferred to entities related to P.N. group (Ghanshyam Rathore) in the name of unsecured loans. Case was reopened u/s. 147 and notice u/s. 148 was issued. Statutory notices u/s. 143(2) and 142(1) of the Act along with show cause notice were issued. Assessee was required to furnish the nature of his business, books of account, bank account statement, balance sheet, profit and loss account, source of cash deposits and details of unsecured loans given by the assessee. Assessee made submissions before ld. Assessing Officer. After considering the assessee’s response, assessment proceedings were completed and assessed total income of Rs.5,80,91,518/-.
Assessee preferred first appeal before learned CIT(Appeals), who dismissed assessee’s appeal ex parte.
Assessee has preferred this second appeal on the ground, in addition to others, that the impugned order has been passed in violation of the principles of natural justice without affording sufficient opportunity of hearing to the assessee.
Perused the records and heard learned representative for the assessee and learned DR for revenue. Initially, learned AR filed an adjournment application, which was rejected.
Perusal of the first appellate order shows that the assessee was issued various notices during the first appellate stage on 22.05.2025, 03.06.2025, 26.06.2025 and 02.07.2025, but the assessee did not make any submission during the first appellate stage, which compelled the ld. CIT(Appeals) to pass ex parte impugned order. Such an irresponsive conduct of the assessee is not acceptable. We, however, note that the ld. CIT(Appeals) has passed ex parte order without any discussion on merits, which is not in consonance with the spirit of section 250(6) of the Act, wherein learned CIT(Appeals) was expected to state the points for determination, decision thereon and the reasons for the decision. In such circumstances and in the interest of justice, we deem it just and proper to remit the matter back to the file of learned CIT(Appeals) for deciding the appeal afresh in accordance with law after taking assessee’s submissions into consideration. We further direct the assessee to be diligent and cooperative in attending the proceedings and making submissions before 3 | P a g e the learned CIT(Appeals) for the expeditious and effective disposal. Needless to say that learned CIT(Appeals) shall ensure the observance of the principles of natural justice. The appeal is thus liable to be allowed for statistical proposes.
In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 29.12.2025.