HAJARIA SOFT SERVICES PRIVATE LIMITED,LUCKNOW V. INCOME TAX OFFICER-3(2), LUCKNOW

ITA 74/LKW/2025

AI Insights

The case involves Hajaria Soft Services Pvt Ltd, the appellant, contesting an order from the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, which confirmed additions made by the Assessing Officer for the assessment year 2017-18. The additions included disallowed deductions and unexplained investments. The Tribunal noted the appellant's failure to provide sufficient evidence or attend hearings, leading to the dismissal of the appeal. The Tribunal emphasized the appellant's lack of interest in prosecuting the appeal and upheld the additions made by the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126889 (ITAT-LUCKNOW)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: REVENUE DID NOT EXPRESS ANY; REVENUE WAS HEARD. HE; SANJEEV KRISHNA SHARMA
• Keywords: Condonation of delay; Opportunity of being heard; Corroborative evidences; Unexplained investment; Onus to prove; Principle of natural justice
• Section: 142(1); 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW Įी अनाǑद नाथ ͧमèĮा, लेखा सदèय क े समछ BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER आयकर अपील सं/ ITA No.74/LKW/2025 Ǔनधा[रण वष[/ Assessment Year: 2017-18 Hajaria Soft Services Pvt Ltd A-1462, Sec-1, LDA Colony, Kanpur Road Ashiyana, Lucknow-226012. v. Income Tax Officer-3(2) Lucknow-New Pratyaksh Kar Bhawan, 57, Ram Tirath Marg, Hazratganj, Lucknow- 226001. PAN:AADCH6101R अपीलाथȸ/(Appellant) Ĥ×यथȸ/(Respondent) अपीलाथȸ ͩक और से/Appellant by: None Ĥ×यथȸ ͩक और से /Respondent by: Shri Sanjeev Krishna Sharma, Addl. CIT(DR) आदेश / O R D E R PER ANADEE NATH MISSHRA, A.M.: The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 05/08/2024 for the assessment year 2017-18. The grounds of appeal of the assessee are as under: - “1. Because on the facts and in the circumstances of the case the order of Ld CIT(A) is bad in law and deserves to be quashed being illegal. 2. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law in not allowing deduction of Rs.30,32,824/- u/s 80JJA in the revised ITR filed by the assessee. 3. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law in not justified in confirming Adhoc addition of Rs.49,75,133.00 which was calculated at 10 percent on other expenses aggregating to Rs.49,75,133.00 is not justified and against all settled principles of law and natural justice and thus may kindly be deleted. ITA No.74/LKW/2025 Page 2 of 7 4. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law in confirming addition of Rs.21,00,000.00 u/s 69 of the Income Tax Act, 1961 is based wholly on wrong and incorrect facts is not valid and against all settled principles of law and natural justice and thus may kindly be deleted. 5. Because on the facts and in the circumstances of the case, the order of assessment has been passed in absolute violation of the principles of Natural Justice, without providing adequate opportunity of being heard and therefore deserves to be declared a nullity. 6. The appellant craves for leave to add, modify, amend or delete any other and further grounds of appeal with permission.” (2) The appeal is barred by limitation by 92 days. The assessee has filed an application seeking condonation of delay in filing of this appeal. The application for condonation of delay is supported by an affidavit of the assessee. The Ld. Sr. Departmental Representative for Revenue did not express any objection to the delay being condoned. Therefore, the delay in filing of this appeal is condoned and the appeal is admitted for decision on merits. (2.1) In this case, assessment order dated 13/12/2019 was passed by the Assessing Officer (“AO”) whereby the assessee’s total income was determined at Rs.38,74,773/- as against returned income of Rs.12,77,260/-. In the aforesaid assessment order, an addition of Rs.4,97,513/- was made by the AO. Further, an addition of Rs.21,00,000/- was also made on account of unexplained investment under section 69 of the Income Tax Act, 1961 (“the Act”, for short). The assessee filed appeal against the aforesaid assessment order wherein the aforesaid additions of Rs. 4,97,513/- and of Rs.21,00,000/- were disputed. Vide impugned appellate order dated 05.08.2024 of the Ld. CIT(A), the aforesaid addition was confirmed by the Ld. CIT(A) and the assessee’s appeal was dismissed. The relevant ITA No.74/LKW/2025 Page 3 of 7 portion of the impugned order of the Ld. CIT(A) is reproduced as under: - “It is clear from the above that the appellant has been granted several opportunities to represent its case during appellate proceedings but has failed to make any submissions in support of the appeal filed by it. Appellant is not interested in prosecuting the appeal filed by it. In the appellate proceedings, burden of proof lies on the appellant to prove that the facts and the findings of the Assessing Officer are incorrect. However in the instant case, appellant has chosen not to attend the hearings even after issuing number of notices. Appellant has not furnished any evidence/written submission in support of grounds of appeal raised by it. 6. As mentioned in Para 4 & 5 of this appeal order, this office has issued several letters/notices to assessee to file written submission. However, neither any adjournment was sought nor any written submissions were filed. The notices were issued on email available in the ITBA Module of the Income Tax Department. 6.1 From the above conduct of the appellant, it is evident that the appellant is not interested in pursuing its appeal. The Hon’ble Supreme Court in the case of CIT Vs BLN. Bhattacharjee & Others [1979] 10 CTR 354 (SC) observed that preferring an appeal, means effectively pursuing it. The Hon’ble M.P. High Court in the case of Estate of Late Tukojirao Holkar Vs CWT [1979] 223 ITR 480 (MP) dismissed the reference filed at the instance of the assessee for default and for not taking Necessary steps. Considering the conduct of the appellant in the present proceeding, I am of the view that the appellant is not interested in pursuing the appeal. 6.2. The Hon'ble Supreme Court in the decision pronounced on October 25, 2019 in the case of PCIT vs. NRA Iron & Steel Pvt. Ltd in Civil Appeal No. of 2019 (Arising out of SLP (Civil) No. 29855 of 2018) has held that if a notice is duly Served upon the litigant through its authorized representative, and it was provided Sufficient opportunity to appear before the Court and contest the matter but the litigant chooses to let the matter proceed ex- parte, the order cannot be recalled. 6.3 The decision of the Hon’ble High Court of Mumbai in the case of M/s. Chemipol vis. Union of India [Central Excise Appeal No.62 of 2009] clearly States, that every court judicial body or authority, which has a duty to decide a matter between two parties, inherently possesses the power to dismiss the case in default. For the sake of reference, the relevant extract of the judicial pronouncement rendered by the Hon'ble High Court of Mumbai quoting decision of Hon’ble Supreme Court in case of Nandramdas Dwarkadas, AIR 1958 MP 260, is reproduced herewith: “Now the Act does not give any power of dismissal. But it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses.” 6.4 The principle that every court that is to decide on a matter of dispute, inherently possesses the power to dismiss the case for default, has been upheld by the Hon’ble Supreme Court in case of Dr. P. NallaThampy Vs. Shankar (1984 (Supp) SCC 63 and the case of New India Assurance vs. ITA No.74/LKW/2025 Page 4 of 7 Srinivasan (2000) 3 SCC 242. In the latter case, the Apex Court has held that, “That every court or judicial body or authority, which has a duty fo decide a list between two patties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant who had instituted the proceedings. That is not the function of the court or, for that matter of a judicial or quasi-judicial body.” 6.5 In its decision in the case of CIT v. Gold Leaf Capital Corporation Ltd. On 02.09.2011 (ITA No.798 of 2009), the Hon'ble High Court of Delhi had held that a Negligent assessee should not be given many opportunities just because that Quantum of amount involved is high. Necessary course of action is to draw adverse Inference; otherwise it would amount to give premium to the assessee for his Negligence. When the assessee is non- cooperative, it can naturally be safely Concluded that the assessee did not want to adduce evidence as it would expose falsity and non-genuineness. 6.6 In view of the above facts and the judicial pronouncements, the appeal of the appellant is liable to be dismissed. 7. However, the case is being decided on merits and on the basis of available facts on record. On perusal of Form-35, it is seen that appellant has only attached/uploaded copy of Assessing Officer (AO)'s order dated 14.12.2019 vide Which the AO has disallowed deduction u/s 80JJAA, made addition of Rs. 4,97,513/- on account of disallowance of other expenses and of Rs 21,00,000/- as unexplained investment u/s 69. 8. During the appeal proceedings the appellant has been provided more than sufficient opportunities but appellant failed to submit any submission or evidence in support of grounds of appeal as well as statement of facts and remained completely non-compliant and non-response. Thus, in view of the above-mentioned facts, I am constrained to uphold the order of the AO in absence of any supporting evidence, document presented by the appellant. Accordingly, grounds of appeal are decided against the appellant.” (2.2) The present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 05.08.2024 of the Ld. CIT(A). (2.3) The hearing was initially fixed on 06.03.2025. A letter dated 05.03.2025 was filed by Shri Samrat Chandra, FCA, seeking adjournment on the ground that he was recently appointed by the assessee and power of attorney was still awaited. The hearing was adjourned to 15.04.2025 Shri Samrat Chandra, FCA, once again sought for adjournment on the ITA No.74/LKW/2025 Page 5 of 7 ground that he had been recently appointed by the assessee and power of attorney was still awaited. From the aforesaid, it is obvious that Shri Samrat Chandra, FCA sought adjournments even in the absence of proper authorization from the appellant assessee. (2.4) When the appeal came up for hearing on 15.04.2025, there was no representation from the assessee’s side. Neither the assessee himself attended in person, nor was any Authorized Representative present on behalf of the appellant assessee. In the absence of any representation from the assessee’s side, the Ld. Departmental Representative for Revenue was heard. He relied on the orders of the Assessing Officer and the Ld. CIT(A). In particular, he drew our attention to the relevant portion of the assessment order which is reproduced below for the ease of reference: - “10. The assessee has claimed other expenses in the profit and loss account for Rs.49,75,133/- but has not furnished the evidence of expenses claimed in profit and loss account. The assessee could not produce any evidences regarding bill and voucher of the expenses except the ledger account. As the assessee has failed to produce proper and accurate bills and vouchers for verification, the same was not verifiable. I have no option left but to make an addition Rs.4,97,513/- ie. @ 10% of Rs.49,75,133/- to plug the possibilities of any manipulation to exaggerate the expenditure. 11. The assessee was required vide this office notice u/s 142(1) dated 31.10.2019 to furnish the details with supporting evidence of investment of Rs.51,00,000/- made in M/s Zilion Infra Projects. The assessee has furnished a copy of ledger account but has not furnished any confirmatory letter. From the ledger account, it is observed that amount of Rs.17,00,000/- has been invested by M/s Hajaria Security Services and Rs.4,00,000/- has been invested by M/s Synergy Service. It is clear that the assessee has not invested these amounts but claimed as investment in the balance sheet. The amount of Rs.21,00,000/- (Rs.17,00,000 + 4,00,000) is treated as unexplained investment u/s 69 of the I.T. Act, 1961. Penalty proceedings u/s 271AAC of the I.T. Act, 1961 are being initiated separately.” ITA No.74/LKW/2025 Page 6 of 7 (3) On perusal of the records, it is found that the order of the Ld. CIT(A) is in accordance with law; having regard to the specific facts and circumstances of the present case. The relevant portion of the impugned order of the Ld. CIT(A) has already been reproduced in foregoing paragraph no. 2 of this order, which has also been considered along with assessment order. No material has been brought for consideration to make a case for any interference with the impugned order of the Ld. CIT(A) wherein he confirmed the additions made by the Assessing Officer. Therefore, it is held that the impugned order of the Ld. CIT(A) does not warrant any interference, having regard to the specific facts and circumstances of the present case and applicable law. Accordingly, the aforesaid additions of Rs.4,97,513/- and Rs.21,00,000/- are confirmed and the assessee’s appeal is dismissed. All grounds of appeal are treated as disposed of in accordance with the aforesaid directions. 4. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 23/04/2025. [क ुल भारत, उपाÚय¢] Sd/- [अनाǑद नाथ ͧमèĮा] [KUL BHARAT] [ANADEE NATH MISSHRA] उपाÚय¢/VICE PRESIDENT लेखा सदèय/ACCOUNTANT MEMBER Ǒदनांक/DATED: 23/04/2025 Vijay Pal Singh, (Sr. PS) ITA No.74/LKW/2025 Page 7 of 7 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order // True Copy// Assistant Registrar "