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Facts
The assessee filed an appeal against the order of the CIT(A) which upheld the additions made by the AO treating unsecured loans as unexplained cash credits. The assessee argued that they sought adjournment before the CIT(A) to produce documents but it was denied, and now seeks to admit additional evidence.
Held
The Tribunal admitted the additional evidence sought by the assessee, acknowledging that the assessee was prevented by reasonable cause from producing it earlier. The matter was remanded back to the AO for de novo assessment.
Key Issues
Whether the assumption of jurisdiction under section 147 was valid, and whether the addition of unsecured loans as unexplained cash credits under section 68 and taxed under section 115BBE was justified. Additionally, whether the CIT(A) erred in not quashing the reassessment order barred by limitation and in charging interest under sections 234A, 234B, and 234C.
Sections Cited
147, 144B, 68, 115BBE, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DEHRADUN BENCH: DEHRADUN
(ASSESSMENT YEAR: 2017-18) Parasnath Fuels Pvt. Ltd., The DCIT, Circle 1(1), 28 Feet Road, Dehradun Vikas Nagar, Vs Dehradun - 248198 PAN-AAICP2190D Assessee Revenue Assessee by Dr. Rakesh Gupta, Adv., Shri Somil Agarwal, Adv. Revenue by Sh. Amar Pal Singh, JCIT SR. DR Date of Hearing 11.09.2025 Date of Pronouncement 28.11.2025 ORDER
PER MANISH AGARWAL, AM,
This appeal is filed by the assessee against the order of the National Faceless Appellate Centre [CIT(A), in short], dated 08.10.2024 in Appeal No. NFAC/2016-17/10104734 arising out of the order passed u/s 147 of the Income Tax Act, 1961 (‘the Act’) dt. 08.10.2024 for Assessment year 2017-18.
The assessee has raised following grounds of appeal:
1. That having regard to the facts and circumstances of the case, assumption of jurisdiction in initiating the proceedings u/s 147 and passing the impugned order u/s 147/144B and that too without complying with mandatory conditions u/s 147 to 151A as envisaged under the Income Tax Act, 1961, is bad in law and against the facts and circumstances of the case.
2. That in any case and in any view of the matter, assumption of jurisdiction u/s 147 and passing the impugned order u/s 147/144B, is illegal, bad in law and against the facts and circumstances of the case and the same is not sustainable on legal and factual grounds.
3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making aggregate addition of Rs.90,00,000/- on account of unsecured loan received from two entities as mentioned in the assessment order by treating it as alleged unexplained cash credit u/s 68 and taxing the same u/s 115BBE and that too by recording incorrect facts and findings and in violation of principles of natural justice and without appreciating considering the submissions and evidences filed by the assessee.
4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Id. AO in making aggregate addition of Rs.90,00,000/- on account of unsecured loan u/s 68/115BBE, is bad in law and against the facts and circumstances of the case.5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned reassessment order passed by La. AO which is barred by limitation.
6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 234B and 234C of Income Tax Act, 1961.
7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal
at the time of hearing and all the above grounds are without prejudice to each other.
3. The grounds of appeal No. 1 & 2 are not pressed thus are dismissed.
The Grounds of appeal 2 to 5 are with respect to the addition of Rs.90.00 lacs made u/s 68 r.w.s. 115BBE of the Act wherein the assessee also challenged the action of the AO and CIT(A) in confirming the additions by violating the principle of natural justice.
5. Before us, ld.AR of the assessee submits that before the AO, assessee had filed the confirmations of the loans taken and also filed their ITR’s wherein the interest paid by the assessee was duly offered for tax by the lender companies. Copies of the bank statements of both the lender companies were also filed. However, the AO in absence of their financial statements held the credits as unexplained and made the addition u/s 68 of the Act and further invoked the provisions of section 115BBE of the Act. As per ld. AR before ld. CIT(A), assessee sought time to file the relevant details however, the ld. CIT(A) has passed the order without providing sufficient opportunity to the assessee. Before us,vide letter dt. 08.09.2025, the ld. AR filed a prayer for the admission of additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, wherein following documents are requested to be admitted as additional evidences: i. Copy of Bank Statement of appellant-company for the period of 01.04.2017 to 31.03.2018 (PB). ii. Copy of audited financial statement along with all annexures of M/s Yogya Shippings Private Limited for the AY 2017-18. iii. Copy of acknowledgement of ITR, computation of income, audited financial statement along with all annexures of M/s Yogya Shippings Private Limited for the AY 2018-19. iv. Copy of audited financial statement along with all annexures of M/s Rajusha Textiles Private Limited for the AY 2017-18. v. Copy of acknowledgement of ITR, computation of income, audited financial statement along with all annexures of M/s Rajusha Textiles Private Limited for the AY 2018-19. 5.1 It is submitted by the ld. AR that total additions of Rs.90.00 lacs were made on account of loans taken from two parties namely M/s Yogya Shipping Pvt. Ltd. (Rs. 50.00 lacs) and from M/s Rajusha Textiles Pvt. Ltd. (Rs. 40.00 lacs). In the prayer, ld. AR stated the reasons for non-filing these evidences before the lower authorities and further placed reliance on various judicial pronouncements. The petition made reads as under:
1.
1. It is respectfully submitted that the non-production of the aforesaid evidences at item no. (i) to (v) before the Ld. CIT(A) was on account of sufficient and bonafide cause. The appellant's authorized representative (CA) had specifically sought adjournment on 19.09.2024 (PB 47-48) on the ground that the appellant was in the process of collecting relevant evidences and information, and further, that the representative was pre-occupied with statutory September-end audit/reporting obligations. However, without granting adequate opportunity, Ld. CIT(A) proceeded to pass the impugned order on 08.10.2024. Thus, the appellant was prevented by reasonable cause from producing the evidences at the first appellate stage.
2. It is respectfully submitted that the evidences now being furnished are only supplementary in nature and are in continuation of, and in support of, the evidences already filed on record.
It is further submitted that the principles of substantial justice warrant that the matter be adjudicated on its merits. The case may not be decided merely on account of non-availability of certain evidences at an earlier stage, particularly when the assessee is fully prepared and willing to furnish all requisite evidences to facilitate an effective and fair adjudication of the appeal. In view of the above, it is submitted that these evidences could not be furnished before lower authorities for circumstances beyond the control of the assessee and therefore. is now being submitted before Your Honors and further Your Honors would appreciate that these evidences are crucial for the just and fair adjudication of the assessee's appeal and accordingly, it is humbly prayed that the same may please be admitted. Further it is submitted that the above-mentioned evidences are quite material and therefore it is requested that the same may please be admitted in view of the following judicial pronouncements: * Chakresh Kumar Jain vs DCIT, in ITA 37/Agra/2011, Date of order 02-03-2012. (ITAT, Agra) * Electro (Jaipur) (P) Ltd. vs Inspecting Assisting Commissioner, 26 ITD 236. (ITAT, Delhi) * Rajmoti Industries vs ITO 52 ITD 286 (ITAT, Ahmadabad) * Mahavir Prasad Gupta vs JCIT 101 TTJ 1078. (ITAT, Delhi) * CIT vs Mukta Metal Works, 336 ITR 555 (P&H) It is further submitted that Your Honours have ample powers in this regard under the law as explained by Jurisdictional Delhi Court in the case of CIT vs. Text Hundred India Pvt. Ltd., (2013) 351 ITR 0057, dated
14.1.2011, we humbly submit that in order to make substantial justice and to prevent failure of justice, the aforesaid evidence may please be admitted for consideration and my appeal may please be decided accordingly. 5.2 It is thus submitted by ld. AR that the additional evidences now filed by the assessee are crucial to decide the issues raised in the grounds of appeal taken by the assessee and there are sufficient reasons with the assessee for not filing the same before the lower authorities. He thus prayed for the admission of the additional evidences and prayed for the deletion of the additions made.
6. In reply, ld. Sr DR vehemently supported the orders of lower authorities and opposed the admission of additional evidences filed before us and submits that despite of ample opportunities provided, assessee has not filed any details before the lower authorities. He thus requested to confirm the orders of lower authorities.
Heard both the parties and perused the material available on records. A perusal of the impugned order of ld. CIT(A) it appears that assessee ash filed to submit any details in support of the grounds of appeal taken. It is true that the assessee has failed to make necessary compliance before the ld. CIT(A) and did not file the requisite details/documents however, solely for this reason he should not be deprived from the justice.
7.1 Considering the fact that the assessee has failed to make any representation before the AO and also considering the reasons stated in the prayed made for the admission of additional evidences and in the larger interest of justice by respectfully following the judgements of the hon’ble Jurisdictional high court in the case of CIT Vs. Virgin Securities & Credits Pvt. Ltd reported in (2011) 332 ITR 396(Delhi), we admit the additional evidences filed before us under Rule 29 of the ITAT Rules and remand the matter back to the file of the AO to consider the same and pass the order denovo afresh in accordance with law after affording reasonable opportunity of hearing to the assessee. Assessee is also directed to appear and filed any further details/evidences in support of his case. With this direction, all the grounds of appeal taken by the assessee are partly allowed for statistical purposes.
In the result, appeal of the assessee stands partly allowed for statistical purposes.
Order pronounced in the open court on 28.11. 2025.