RAHUL ARUNKUMAR PANDIT,PUNE V. DCIT , CIRCLE 3, PUNE

ITA 1926/PUN/2025

AI Insights

The case involves Rahul Arunkumar Pandit, who appealed against the order of the Ld. CIT(A) confirming an assessed income of Rs. 55,36,400 for the assessment year 2017-18. The primary contention was the improper dismissal of the appeal ex-parte by the Ld. CIT(A) without adequate opportunity for the appellant to present his case, due to a transition issue between his consultants. Additionally, the appellant contested the disallowance of a deduction of Rs. 25,93,670 claimed under section 57 of the Income Tax Act, which was related to interest expenditure. The Tribunal found that the CIT(A) had not provided sufficient opportunity for the appellant to be heard, leading to the decision to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793485 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 13-08-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH KUMAR SINHA
• Keywords: Set aside
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1926/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year : 2017-18 Rahul Arunkumar Pandit, Flat No.-5, Gopadma No.39, Plot No.18, Prabhat Road, Lane No.9, Pune- 411004. PAN : ABYPP1142R Vs. DCIT, Circle-3, Pune. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 17.06.2025 passed by Ld. Addl./JCIT(A)-1, Kolkata [‘Ld. CIT(A)’] for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “1] The Ld. JCIT(A) has erred in confirming the assessed income of the appellant at Rs. 55,36,400/-. The additions made without considering the fact of the case are illegal and unsustainable in law and the same may please be deleted. 2] The Ld. JCIT(A) has erred in dismissing the case ex-parte without waiting for appellant to furnish the submission & evidences. The Ld. JCIT(A) ought to have appreciated that the appellant could not respond to the notices, as he has changed his Assessee by : None Revenue by : Shri Manishkumar Sinha Date of hearing : 18.09.2025 Date of pronouncement : 22.09.2025 Printed from counselvise.com ITA No.1926/PUN/2025 2 consultant in the past but appeal documents were not handed over by previous consultant to new consultant. 2.1] The Ld. JCIT(A) erred in dismissing contention of the appellant only on the ground that no submission was made without appreciating the facts explained in statement of facts and the evidences already furnished during the course of assessment proceedings. The matter may thus please be set aside at appropriate level as it involves verification of evidences etc. 3] The Ld. JCIT(A) erred in disallowing the deduction of Rs.25,93,670/- claimed u/s. 57 of the Act on account of interest expenditure alleging that the appellant has failed to establish the direct nexus between the interest expenditure and interest income earned. 3.1] The Ld. JCIT(A) failed to appreciate that the appellant had taken loan from HDFC bank which was in turn advance to Prarambh Realtors on which the appellant had earned interest and therefore the deduction was rightly claimed u/s. 57 in respect of interest paid. 4] The Ld. JCIT(A) erred in making disallowance of Rs. 25,93,670/-, being the deduction claimed u/s. 57 of the Act, only on the basis of presumptions and surmises without considering the genuineness of the transactions and the confirmation statement furnished during the course of assessment proceedings. 5] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.” 3. Facts of the case, in brief, are that the assessee is an individual and has furnished return of income on 31.10.2017 declaring income of Rs.29,40,730/-. The assessee is a partner in the firm Pandit Javdekar Associates and apart from above is also in receipt of income from house property and income from other sources i.e. interest from the parties. The case was selected for limited scrutiny under CASS for the reason of large deduction claimed u/s 57 of the IT Act. During the year under consideration, the assessee has Printed from counselvise.com ITA No.1926/PUN/2025 3 claimed deduction of interest expenses u/s 57 of the IT Act of Rs.25,93,670/- and therefore the Assessing Officer asked to furnish the details of above interest expenses. After considering the reply of the assessee, the Assessing Officer came to the conclusion that the assessee failed to establish the nexus between the expenditure claimed u/s 57(iii) and the interest earned. Accordingly, the Assessing Officer was of the view that the assessee could not prove in his submission that the deduction u/s 57 claimed by him is for the purpose of earning income from other sources, hence the deduction u/s 57 of interest payment of Rs.25,93,670/- was disallowed and added back to the total income of the assessee. Vide order dated 29.12.2019 the assessment was completed u/s 143(3) of the IT Act by determining total income at Rs.55,36,400/- as against the income returned by the assessee at Rs.29,42,730/-. 4. Aggrieved with the above assessment order, the assessee preferred an appeal before the Ld. CIT(A). Since the assessee remained absent, Ld. CIT(A) dismissed the appeal filed by the assessee and consequently confirmed the order passed by the Assessing Officer. 5. It is the above order against which the assessee is in appeal before this Tribunal. Printed from counselvise.com ITA No.1926/PUN/2025 4 6. When the appeal was called for hearing, neither anybody appeared nor any application for adjournment was filed despite the service of notice. Therefore, we proceed to decide the appeal on the basis of material available on the record and also after hearing Ld. DR. 7. In this regard, we find that Ld. CIT(A) has dismissed the appeal for want of prosecution since on the dates of hearing provided by Ld. CIT(A), the assessee neither appeared nor any adjournment was sought. We further find that only two notices of hearing were issued by Ld. CIT(A). The first notice was issued on 29.05.2025 and opportunity of hearing was given for 06.06.2025, since the assessee remained absent another notice of hearing was issued on 09.06.2025 for filing response within five days time. It is apparent that in a time span of only 16 days, two notices were issued by Ld. CIT(A) which cannot be said to be sufficient opportunity of hearing. Considering the totality of the above facts of the case and in the interest of justice and without going into merits of the case, we deem it appropriate to set-aside the impugned ex-parte order passed by Ld. CIT(A) and remand the matter back to his file with a direction to decide the appeal afresh as per fact and law after providing reasonable opportunity of hearing to the Printed from counselvise.com ITA No.1926/PUN/2025 5 assessee. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A) in this regard and to produce explanations/ submissions/ evidences and documents in support of grounds of appeal without taking any adjournment under any pretext, otherwise Ld. CIT(A) shall be at liberty to pass appropriate order as per law. Grounds of appeal raised by the assessee are partly allowed for statistical purposes 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 22nd day of September, 2025. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 22nd September, 2025. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Addl./JCIT(A)-1, Kolkata. 4. The Pr.CIT/CIT concerned. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “B” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "