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Facts
The assessee, engaged in wholesale trading, filed income for AY 2018-19. Based on information regarding cash deposits and TDS/TCS data, the AO initiated reassessment proceedings and added Rs.1,18,52,322/- for bogus sales, considering them as income from undisclosed sources.
Held
The CIT(Appeals) dismissed the assessee's first appeal ex parte without deciding on merits, violating principles of natural justice. The Tribunal noted that while the assessee was unresponsive, the CIT(Appeals) failed to provide a reasoned order.
Key Issues
Whether the CIT(Appeals) erred in dismissing the appeal ex parte without a speaking and reasoned order and in violation of natural justice principles.
Sections Cited
250, 147, 148, 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI M. BALAGANESH & SHRI SUNIL KUMAR SINGH
ORDER PER : SUNIL KUMAR SINGH, JUDICIAL MEMBER:
This appeal has been preferred by assessee against the impugned order dated 31.03.2025 passed in Appeal No. NFAC/2017-18/10228978 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 2018-19, wherein the ld. CIT(Appeals) has dismissed assessee’s first appeal ex parte.
Brief facts state that the appellant-assessee, an individual, engaged in wholesale trading of food grains, pulses, and oilseeds under the name, M/s. Shri Vidhya Sagar Traders, Lalitpur, filed return of income for assessment year 2018-19, declaring income of Rs.13,28,530/-. Based on information received regarding substantial cash deposits, withdrawals, and TDS/TCS data, the Assessing Officer initiated reassessment proceedings u/s 147 and issued notice u/s 148. Explanations/replies offered by assessee with respect to above information stood accepted by the Assessing Officer. However, it was further gathered from the said information that the assessee had shown bogus sales of Rs.1,18,52,322/- to M/s. Mahaveer Prasad Suresh Kumar, New Delhi. In response to statutory notices, the assessee submitted supporting documents including purchase orders, ledger extracts, invoices, delivery challans, mandi gate passes, lorry receipts, and mandi purchase vouchers. However, the AO noted discrepancies in invoice dates, lorry numbers, and corresponding ledger entries. Relying on investigation wing’s information in possession of the department, that M/s. Mahaveer Prasad Suresh Kumar was a non- genuine entity engaged in providing accommodation entries, and that the assessee was listed among its beneficiaries, the Assessing Officer held the sales shown to have been made to M/s. Mahaveer Prasad Suresh
2 | P a g e Kumar, to be bogus and made an addition of Rs.1,18,52,322/- u/s 69A r.w.s. 115BBE of the Act.
Aggrieved assessee preferred an appeal before the ld. CIT(Appeals), who dismissed assessee’s first appeal ex parte.
This second appeal has been preferred on the ground, in addition to others on merit, that the Ld. CIT(Appeals) has erred in passing impugned order ex parte without serving the notice of hearing upon the assessee and in violation of principles of natural justice.
Perused the records. Heard ld. Representative for assessee and ld. DR for revenue.
Learned representative for assessee has submitted that the impugned order passed ex parte is not sustainable, as the first appellate authority has not decided the appeal on merit as per section 250(6) of the Act.
Learned DR has pointed out that sufficient opportunities were afforded to the assessee, but for no avail. Ld. DR has supported the impugned order.
It transpires from the perusal of the impugned order that the assessee did not file any submission in response to various notices issued by the first appellate authority on 09.04.2024, 13.03.2025 and 3 | P a g e 21.03.2025 for compliance on or before 24.04.2024, 20.03.2025 and 26.03.2025 respectively. Such an irresponsive and reluctant attitude of the assessee has compelled the first appellate authority to pass impugned order ex parte. It is, however, noticed that learned CIT(Appeals) passed ex-parte impugned order without any substantial discussion on the merits of the case, whereas learned CIT(Appeals) was expected to state the points for determination, decision thereon and the reasons for the decision as provided u/s. 250(6) of the Act, more particularly when the appellant assessee had raised 8 grounds before ld. CIT(Appeals), challenging the addition made by Assessing Officer.
It is well settled principle that the ‘reason’ is the life of law. It is that filament that injects soul to the order. Absence of analysis, not only evinces non-application of mind but also mummifies the core spirit of the order. Keeping in view the well settled principle that no litigant should be condemned unheard, we deem it just and appropriate to remit the matter back to the file of learned CIT(A) for adjudication afresh on merits after affording opportunity of hearing to the assessee. The ld. CIT(Appeals) is directed to pass speaking and reasoned order. We direct the assessee to be cooperative in attending the hearings and making submissions before the learned CIT(A) for the expeditious and effective disposal. Needless to 4 | P a g e say, that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation in respect of the merits of the case. The appeal is, thus, liable to be allowed for statistical purposes.
In the result, appeal is allowed for statistical purposes.
Order pronounced in the open court on 29.09.2025.