M/S AS HOUSING COMPANY, RAIPUR,RAIPUR V. DCIT, CIRCLE-1(1), BHILAI, BHILAI

ITA 699/RPR/2025

AI Insights

The case involves M/s A S Housing Company, a partnership firm engaged in building and development, which appealed against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, for the Assessment Year 2018-19. The primary contention was regarding the dismissal of their appeal by the CIT(A) due to non-prosecution, and the additions made by the Assessing Officer (AO) under section 68 of the Income Tax Act, treating the capital introduced by the partners as unexplained cash credits. The Tribunal found that the CIT(A) had not addressed the merits of the case and had dismissed the appeal solely on the grounds of non-compliance by the appellant, which was deemed inappropriate.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826465 (ITAT-RAIPUR)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 18-11-2025
• Other Referred Cases: CIT v. Prem Kumar Arjundas Luthra (HUF), CIT vs. B.N. Bhattacharya, M/s. Chemipol vs. Union of India, Nandramdas Dwarkadas vs. Shankar, Dr. P. Nala Thampy vs. Shankar, New India Assurance vs. Srinivasan, CIT vs. Gold Leaf Capital Corporation Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Principle of natural justice
• Section: 143(3); 68; 131; 63

Judgement Text

"1 आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR Įी पाथ[ सारथी चौधरȣ, Ɋाियक सद˟ एवं ŵी अवधेश क ुमार िमŵा, लेखा सद˟ क े समƗ । BEFORE SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI AVDHESH KUMAR MISHRA, AM आयकर अपील सं. / ITA No: 699/RPR/2025 (िनधाŊरण वषŊ Assessment Year: 2018-19) M/s A S Housing Company, Amar Golf Greens, Sejbahar, Besides Govt. Engg. College, Raipur-492001, C.G. vs The Deputy Commissioner of Income Tax, Circle-1(1), Bhilai, 18/32 Bunglow, Sector-6, Bhilai- 490006, C.G. PAN: AASFM6353J (अपीलाथȸ/Appellant) : (Ĥ×यथȸ / Respondent) Ǔनधा[ǐरती कȧ ओर से / Assessee by : None (Petition filed) राजèव कȧ ओर से / Revenue by : Shri Ram Tiwari, CIT- DR सुनवाई कȧ तारȣख / Date of Hearing : 06.01.2026 घोषणा कȧ तारȣख / Date of Pronouncement : 08.01.2026 आदेश / O R D E R Per Avdhesh Kumar Mishra, AM: The appeal for Assessment Year (‘AY’) 2018-19 filed by the assessee is directed against the order dated 09.09.2025 passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi [‘CIT(A)’]. 2. The assessee has raised following grounds of appeal: - “1. That the Appellate Order passed by the Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as \"Ld. CIT(A)\") under section 250 of the Act is highly unjustified, bad in law, passed without providing reasonable opportunity of being heard, against the principles of natural justice and not in accordance with the provisions of law since, the Ld. CIT(A) has grievously Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 2 erred in summarily dismissing the appeal by not rendering any decision on merits which is contrary to the law laid down by the Hon'ble Bombay High Court in the case of CIT v. Prem Kumar Arjundas Luthra (HUF) (2017) 297 CTR 614 (Born.). It is prayed that the Appellate Order passed under section 250 of the Act may please be cancelled/set-aside on this ground alone. 2. That the Assessment Order framed u/s.143(3) r.w.s. 263 r.w.s. 144B of the Act dated 22.03.2025 by the Ld. AO and affirmation of the same by the Ld. CIT(A) is highly illegal, invalid, void ab initio, bad in law in and suffers from various legal infirmities and it is earnestly prayed that the Assessment Order passed u/s.143(3) r.w.s 263 of the Act may please be quashed and cancelled. 3. (i) On the facts and circumstances of the case as well as in law, the Ld. CIT(A) has grievously erred in affirming the action of the Ld.AO in making an addition of Rs.3,39,73,298/- treating the capital introduced by the partners of the appellant firm as Unexplained cash credits thereby invoking the rigors of the deeming fiction engrafted under section 68 r.w.s 115BBE which is highly unjustified, unwarranted, uncorroborated, untenable, not proper on facts, not in accordance with the provisions of law. (ii) That, the Ld. CIT(A) further erred in affirming the finding of Ld. AO without appreciating that the appellant firm had discharged its initial onus cast upon it under section 68 by filing elaborate details in the form of Confirmations, their returns of income, Computation, bank statements etc. as regards the identity of the partners, their creditworthiness and the genuineness of the transactions within the purview of section 68 so as to discharge the initial onus cast on the appellant. Further, the Ld. AO has failed to appreciate that even the source of source of the said capital was also proved beyond doubt by the appellant. (iii) That, the Ld. CIT(A) further erred in affirming the addition made by Ld. AO which was made solely by following the dictates of the brazen observations in the revision order, & without conducting any independent enquiry or investigation under section 131 or 133' (6) of the Act in view of plenary powers bestowed on the AO, hence, invocation of deeming fiction under section 68 is highly unjustified, unwarranted, uncorroborated, untenable and not in accordance with the provisions of law in this regard. Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 3 (iv) That, the Ld. CIT(A) further erred in affirming the action of Ld. AO in making addition under section 68 in respect of the capital contributions made by the partners of the appellant firm as it is a settled legal position that the capital introduced by the partners represents their own funds and the burden, if any, to explain the source thereof lies upon the individual partners and not upon the firm. Even assuming, without admitting, that the explanation offered by the appellant firm was not found to be satisfactory, no addition could be made in the hands of the firm under section 68 and at the most, the same could be assessed in the hands of the respective partner. Hence, it is earnestly requested that the addition made of Rs.3,39,73,298/- under section 68 may please be deleted.” 3. The relevant facts giving rise to this appeal, as evident from the record, are that the appellant assessee, a partnership firm, is a builder developer. It filed its Income Tax Return (‘ITR’) declaring income of Rs.49,05,880/-. The case was scrutinized and the consequential assessment was completed by accepting the income declared in the ITR vide order dated 20.04.2021 passed under section 143(3) r.w.s. 144B of the Income Tax Act (‘Act’). Later, the case was reviewed by the Ld. Principal Commissioner of Income Tax (“Ld. PCIT”) under section 263 of the Act, who set aside the assessment order dated 20.04.2021 and remanded the issue of partners’ capital for fresh investigations. In pursuance of the order under section 263 of the Act, the Ld. AO completed the assessment under section 143(3) r.w.s. 263 r.w.s. 144B of the Act on 22.03.2025 determining the income at Rs.3,88,79,178/-; wherein the Ld. AO treated capital introduced by various partners; namely, Shri Surendra Rathi- Rs.1,00,00,000/-, Shri Jagjeet Singh Bhatia- Rs.16,97,288/- and Shri Ashish Paliwal- Rs.2,34,26,208/- as unexplained and taxed the same under sections 68 r.w.s. 115BBE of the Act. Aggrieved with the assessment under section 143(3) r.w.s. 263 Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 4 r.w.s. 144B of the Act, the appellant assessee filed appeal before the Ld. CIT(A), who dismissed the appeal due to non-prosecution/compliance as under: “4. During the course of appeal proceedings, the following notices/letters for hearing were issued to the appellant, but till date the appellant has neither filed any response nor filed any submissions in support of grounds of appeal. The details of the notices issued are as under: S. N. Date of Notice sent Compliance Date Remarks 1 01.05.2025 - Issued Enablement of Communication Window.. No response from the appellant. 2 25.06.2025 10.07.2025 No response from the appellant 3 14.07.2025 18.07.2025 No response from the appellant. 4 28.07.2025 12..08.2025 No response from the appellant 5. 13.08.2025 28.08.2025 No response from the appellant 4.1 Thus in this case, the appellant has not effectively pursued the appellate proceedings and failed to respond to various notices issued by this office. It is important to delve into the judicial pronouncements on this issue which are elaborated below: 4.1.1 In the case of CIT vs. B.N. Bhattacharya reported at 118 ITR 461, it was held by the Hon'ble Supreme Court that “......appeal does not mean merely filing of appeal but effectively pursuing it.” 4.1.2 The decision of the Hon'ble High Court of Mumbai in the case of M/s. Chemipol vis. Union of India, Law Ministry, Aayakar Bhawan, Mumbai and The Commissioner of Central Excise, Mumbai (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. Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 5 4.1.3 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 the case of Nandramdas Dwarkadas AIR 1958 MP 260, is reproduced below: “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.” 4.1.4 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. Na/la Thampy Vs. Shankar (1984(Supp) sec 63 and the case of New India Assurance vs. Srinivasan (2000) 3SCC 242. In the latter case, the Apex Court has held as under:- “'That every court or judicial body or authority, which has a duty to decide a list between two parties, 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, therefore, the court will be well within its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisdiction to restore the complaint on good cause being shown for the non-appearance of the complainant.” 4.1.5 The Hon'ble Bombay High Court has also laid down the proposition that where the appellant in spite of notice is persistently absent and the Tribunal on facts of the case is of the view that the appellant is not interested in prosecuting the appeal, it can in exercise its inherent power to dismiss the appeal for non-prosecution. 4.1.6 The Hon'ble ITAT Delhi (ITA No. 2006/Del/2011 dtd. 19.12.2001) in the case of Whirlpool of India Ltd v. DCIT had dismissed appeal for non-attendance at hearings, inferring that assessee was not interested in prosecuting of appeal. Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 6 Thereafter in another decision in the case of Chadha Finlease Ltd. V. ACIT (ITA No. 3013/Del/2011 date of order 20.12.2011) the Hon'ble ITAT had dismissed the appeal for non-attendance at hearings. 4.1.7 In a 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. 5. The facts of the case as noted above are that the appellant has not pursued the appeal despite being granted several opportunities as elaborated supra. No details, documents or submissions have been provided to come to any conclusion other than those arrived at by the assessing officer in the order. The notices have been duly served upon the assessee via e-mail. Regrettably no response whatsoever was forthcoming on the appointed date. Thus, nothing has been placed on record to substantiate as to why the additions made by the AO should not be sustained. 6. In view of the above, the undersigned is left with no option but to decide the case on the basis of material on record. Bare perusal of the facts shows that the appellant has not pursued the appeal despite being granted several opportunities as elaborated supra. The assessee has further jeopardized its case by not responding despite several opportunities that were provided. I am constrained to agree with the approach adopted by the AO in making the additions. The AO has passed a reasoned and speaking order considering all the facts and the circumstances of the case and no interference with the order of the AO is called for. The grounds of appeal are therefore dismissed.” Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 7 4. Before us, none attended on behalf of the appellant assessee. Therefore, we heard the Ld. Senior Departmental Representative (“Sr. DR”). With the help of facts mentioned in the impugned order, she submitted that reasonable opportunities of being heard were provided to the appellant assessee by the Ld. CIT(A). However, the appellant assessee tactfully ensured noncompliance. Hence, she prayed for dismissal of this appeal and upholding of orders of the authorities below. She argued the case vehemently. However, on our specific query, the Ld. DR appeared in admittance of remanding the matter to the Ld. CIT(A) for adjudication on merit after setting aside the impugned order as the same had been decided against the appellant assessee for its failure to ensure compliance. 5. We take note of the fact that the Ld. CIT(A) has not decided each ground of appeal after discussing the issues in detail and his/her reasons for agreeing with the assessment order though he/she, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen for his/her consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues which arise from the impugned order before him/her, whether or not these issues have been raised by the assessee before him/her. On cumulative consideration of the provisions of section 250(6) of the Act read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, the Ld. CIT(A) is not empowered to dismiss the appeal for non-prosecution/non-compliance and is Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 8 obliged to dispose of the appeal on merit. Further, we have also taken note of the fact that the appellant assessee has not ensured any effective compliance before the Ld. CIT(A). 6. We heard both parties and perused the material available on the record. We take note of the fact that the Ld. CIT(A) has decided the case ex-parte and not on the merit. In view of the above, we are of the considered view that the appellant assessee deserves reasonable opportunity of being heard to make shortcomings or non-compliances as the appellant assessee has not ensured any compliance before the Ld. CIT(A). Therefore, considering all the facts and without offering any comment on merit of the case, we, in the interest of justice, deem it fit to set aside the impugned order and to remit the matter back to the Ld. CIT(A) to decide this case on merit. Ordered accordingly. Needless to say that the appellant assessee should ensure compliances during the remitted appellate proceeding before the Ld. CIT(A). Further, we direct the Ld. CIT(A) to decide the case on merit afresh/denovo, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee. 7. In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 08/01/2026. Sd/- (PARTHA SARATHI CHAUDHURY) Sd/- (AVDHESH KUMAR MISHRA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर / Raipur; िदनांक Dated 08/01/2026 Printed from counselvise.com ITA No. 699/RPR/2025 M/s A S Housing Company vs DCIT, Circle-1(1), Bhilai 9 Vaibhav Shrivastav, Stenographer आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur 1. अपीलाथŎ/ The Appellant- M/s A S Housing Company 2. ŮȑथŎ/ The Respondent-DCIT, Circle-1(1), Bhilai 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. // सȑािपत Ůित True copy // Printed from counselvise.com "