UMASHANKER SHIWAPRASAD MODI,THANE V. CIRCLE 19(3), MUMBAI, MUMBAI

ITA 5074/MUM/2025

AI Insights

The case involves Mr. Umashanker Modi, who appealed against the order of the Commissioner of Income-tax (Appeals) at the National Faceless Appeals Centre, Delhi, for the assessment year 2018-19. The primary issues in the appeal were the addition of 11,10,93,681 as unexplained cash credit under section 68 of the Income Tax Act, 1961, and the disallowance of interest of 46,00,926. The Assessing Officer had completed the assessment under section 144 due to non-compliance with statutory notices, and the CIT(A) upheld these additions. The Tribunal noted the assessee's failure to comply with statutory notices during both assessment and appellate proceedings but decided to grant a final opportunity to the assessee to present his case, emphasizing the importance of natural justice.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829547 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Mumbai
• Assessment Year: misc
• Appeal Filed On: 18-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK PERAMPURNA
• Assessee Lawyers: FENIL BHATT
• Keywords: Condonation of delay; Set aside; Reasonable cause; Corroborative evidences; Unexplained cash credit; Principle of natural justice; Non compliance
• Section: 144; 142(1); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 5074/MUM/2025 Assessment Year: 2018-19 Mr. Umashanker Modi Office No. D, 12th Floor, MBC Park, D Building, Near Hypercity, Ghodbunder Road, Kasarvadavali, Thane West, Thane- 400615. Vs. Income Tax Department, National Faceless Appeals Centre (NFAC), Delhi. PAN NO. AABPM 8785 D Appellant Respondent Assessee by : Mr. Fenil Bhatt Revenue by : Mr. Vivek Perampurna, CIT-DR Date of Hearing : 17/11/2025 Date of pronouncement : 13/01/2026 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 03.01.2024 passed by the Ld. Commissioner of Income-tax (Appeals)-National Faceless Appeal Centre- Delhi [in short ‘the Ld.CIT’] for assessment year 2018-19, raising following grounds:- “1. That the Learned Commissioner of Income Tax (Appeals) erred in law and on facts in passing the order under section 250 of the Income Tax Act, 1961 without considering the genuine and reasonable cause for non-compliance during appellate proceedings. Printed from counselvise.com 2. That the Learned Assessing Officer erred in law and on facts in treating the unsecured loans amounting to 11,10,93,681/ unexplained cash credit under section 68 without giving adequate opportunity to the appellant to substantiate the same with documentary evidence. 3. That the Learned Assessing Officer further erred in disallo interest of ₹46,00,926/ appreciating the factual matrix and supporting details, some of which were already available and others co if opportunity was granted. 4. That the assessment orde was ex parte and in violation of the principles of natural justice, as the appellant did not receive or was unable to access the statutory notices due to old age, ill health, and technological constraints. 5. That the appellant prays for condonation of delay in filing the present appeal before the Hon'ble ITAT, as the appellant came to know of the CIT(A)'s order only upon receipt of a recovery notice from the Jurisdictional Assessing Officer. The delay is neither delib nor due to negligence but is attributable to his advanced age (80 years), poor health, and lack of access to electronic communication. The delay may kindly be condoned in the interest of substantial justice. 6. That the authorities below have failed submissions in proper perspective and have passed orders based merely on non-compliance without examining the merits. 7. That the orders passed are bad in law, arbitrary, and in violation of the principles of natural justice. 8. The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at the time of hearing.” 2. At the outset, the Ld. Counsel for the assessee invited our attention to the delay of was submitted that the delay was occasioned due to the assessee’s advanced age, ill health, and lack of computer literacy. Reliance was 2. That the Learned Assessing Officer erred in law and on facts in unsecured loans amounting to 11,10,93,681/ unexplained cash credit under section 68 without giving adequate opportunity to the appellant to substantiate the same with documentary evidence. 3. That the Learned Assessing Officer further erred in disallo 46,00,926/-on such unsecured loans without properly appreciating the factual matrix and supporting details, some of which were already available and others could have been furnished if opportunity was granted. 4. That the assessment order passed under section 144 r.w.s. 147 was ex parte and in violation of the principles of natural justice, as the appellant did not receive or was unable to access the statutory notices due to old age, ill health, and technological constraints. appellant prays for condonation of delay in filing the present appeal before the Hon'ble ITAT, as the appellant came to know of the CIT(A)'s order only upon receipt of a recovery notice from the Jurisdictional Assessing Officer. The delay is neither delib nor due to negligence but is attributable to his advanced age (80 years), poor health, and lack of access to electronic communication. The delay may kindly be condoned in the interest of substantial 6. That the authorities below have failed to consider the appellant's submissions in proper perspective and have passed orders based compliance without examining the merits. 7. That the orders passed are bad in law, arbitrary, and in violation of the principles of natural justice. 8. The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at the time of hearing.” At the outset, the Ld. Counsel for the assessee invited our attention to the delay of 536 days in filing the present appeal. It was submitted that the delay was occasioned due to the assessee’s advanced age, ill health, and lack of computer literacy. Reliance was Umashankar Shiwaprasad Modi 2 ITA No. 5074/MUM/2025 2. That the Learned Assessing Officer erred in law and on facts in unsecured loans amounting to 11,10,93,681/- as unexplained cash credit under section 68 without giving adequate opportunity to the appellant to substantiate the same with 3. That the Learned Assessing Officer further erred in disallowing on such unsecured loans without properly appreciating the factual matrix and supporting details, some of uld have been furnished r passed under section 144 r.w.s. 147 was ex parte and in violation of the principles of natural justice, as the appellant did not receive or was unable to access the statutory notices due to old age, ill health, and technological constraints. appellant prays for condonation of delay in filing the present appeal before the Hon'ble ITAT, as the appellant came to know of the CIT(A)'s order only upon receipt of a recovery notice from the Jurisdictional Assessing Officer. The delay is neither deliberate nor due to negligence but is attributable to his advanced age (80 years), poor health, and lack of access to electronic communication. The delay may kindly be condoned in the interest of substantial to consider the appellant's submissions in proper perspective and have passed orders based compliance without examining the merits. 7. That the orders passed are bad in law, arbitrary, and in violation 8. The appellant craves leave to add, alter, amend or withdraw any of the above grounds of appeal at the time of hearing.” At the outset, the Ld. Counsel for the assessee invited our in filing the present appeal. It was submitted that the delay was occasioned due to the assessee’s advanced age, ill health, and lack of computer literacy. Reliance was Printed from counselvise.com placed on the affidavit sworn by the assessee, wherein it has been averred, inter alia, that the assessee does not personally operate electronic modes of communication, that emails were handled by assistants whose frequent changes resulted in important communications remaining unattended, and that the order of the Ld. CIT(A) came to the ass recovery notice from the Assessing Officer in July 2025. It was further stated that the delay was neither deliberate nor intentional, but arose due to circumstances beyond the assessee’s control. relevant part of his affidavit is reproduced as under: “4. That due to my advanced age and ill health, I do not operate email or digital communication channels personally. My email account is generally checked by my assistants, who thereafter print out important emails f 5. That over the relevant period, there had been frequent changes in my assistants, owing to which my emails remained unchecked and unattended. Consequently, the intimation of the CIT(A)'s order was never brought to my notice. 6. That I came to know about the passing of the CIT(A)'s order only when I received a demand recovery notice from the Jurisdictional Assessing Officer in July 2025. Immediately thereafter, I took steps to obtain copies of the order and initiate the appeal process befo this Hon'ble Tribunal. 7. That the delay in filing the appeal is neither deliberate nor intentional, but solely due to the above genuine reasons beyond my control. 8. That I respectfully submit that I am a senior citizen suffering from chronic ailments including diabetes, high blood pressure, and restricted mobility, and pray for sympathetic consideration of my request. placed on the affidavit sworn by the assessee, wherein it has been , that the assessee does not personally operate electronic modes of communication, that emails were handled by assistants whose frequent changes resulted in important communications remaining unattended, and that the order of the Ld. CIT(A) came to the assessee’s knowledge only upon receipt of a recovery notice from the Assessing Officer in July 2025. It was further stated that the delay was neither deliberate nor intentional, but arose due to circumstances beyond the assessee’s control. his affidavit is reproduced as under: 4. That due to my advanced age and ill health, I do not operate email or digital communication channels personally. My email account is generally checked by my assistants, who thereafter print out important emails for my perusal. 5. That over the relevant period, there had been frequent changes in my assistants, owing to which my emails remained unchecked and unattended. Consequently, the intimation of the CIT(A)'s order was never brought to my notice. me to know about the passing of the CIT(A)'s order only when I received a demand recovery notice from the Jurisdictional Assessing Officer in July 2025. Immediately thereafter, I took steps to obtain copies of the order and initiate the appeal process befo this Hon'ble Tribunal. 7. That the delay in filing the appeal is neither deliberate nor intentional, but solely due to the above genuine reasons beyond my 8. That I respectfully submit that I am a senior citizen suffering from ailments including diabetes, high blood pressure, and restricted mobility, and pray for sympathetic consideration of my Umashankar Shiwaprasad Modi 3 ITA No. 5074/MUM/2025 placed on the affidavit sworn by the assessee, wherein it has been , that the assessee does not personally operate electronic modes of communication, that emails were handled by assistants whose frequent changes resulted in important communications remaining unattended, and that the order of the essee’s knowledge only upon receipt of a recovery notice from the Assessing Officer in July 2025. It was further stated that the delay was neither deliberate nor intentional, but arose due to circumstances beyond the assessee’s control. The 4. That due to my advanced age and ill health, I do not operate email or digital communication channels personally. My email account is generally checked by my assistants, who thereafter print 5. That over the relevant period, there had been frequent changes in my assistants, owing to which my emails remained unchecked and unattended. Consequently, the intimation of the CIT(A)'s order was me to know about the passing of the CIT(A)'s order only when I received a demand recovery notice from the Jurisdictional Assessing Officer in July 2025. Immediately thereafter, I took steps to obtain copies of the order and initiate the appeal process before 7. That the delay in filing the appeal is neither deliberate nor intentional, but solely due to the above genuine reasons beyond my 8. That I respectfully submit that I am a senior citizen suffering from ailments including diabetes, high blood pressure, and restricted mobility, and pray for sympathetic consideration of my Printed from counselvise.com 9. That in view of the above circumstances, I humbly pray that this Hon'ble Tribunal may kindly be pleased to condone the dela filing the appeal in the interest of justice. 3. We have carefully considered the submissions of both the parties and perused the affidavit placed on record. Keeping in view the age, health condition, and technological limitations of the assessee, and applying a liberal interpretation to the expression “sufficient cause”, we are of the considered view that the assessee has satisfactorily explained the delay. 3.1 It is well settled that when substantial justice and technical considerations are pitted substantial justice deserves to be preferred. Guided by this salutary principle, and in the absence of any mala fide or deliberate negligence, we condone the delay of 536 days in filing the appeal and admit the same for ad 4. The principal grievance of the assessee in the present appeal is against the addition of the Income-tax Act, 1961, along with disallowance of interest of ₹46,00,926/-, allegedly without granting substantiate the supporting documentary evidence. 4.1 The assessment was completed under section 144 of the Act on account of non-compliance with statutory notices. Before the first appellate authority also, the assessee failed to r 9. That in view of the above circumstances, I humbly pray that this Hon'ble Tribunal may kindly be pleased to condone the dela filing the appeal in the interest of justice.” We have carefully considered the submissions of both the parties and perused the affidavit placed on record. Keeping in view the age, health condition, and technological limitations of the and applying a liberal interpretation to the expression , we are of the considered view that the assessee has satisfactorily explained the delay. It is well settled that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Guided by this salutary principle, and in the absence of any mala fide or deliberate negligence, we condone the delay of 536 days in filing the appeal and admit the same for adjudication. The principal grievance of the assessee in the present appeal is against the addition of ₹11,10,93,681/- made under section 68 of tax Act, 1961, along with disallowance of interest of , allegedly without granting adequate opportunity to substantiate the supporting documentary evidence. The assessment was completed under section 144 of the Act compliance with statutory notices. Before the first appellate authority also, the assessee failed to r Umashankar Shiwaprasad Modi 4 ITA No. 5074/MUM/2025 9. That in view of the above circumstances, I humbly pray that this Hon'ble Tribunal may kindly be pleased to condone the delay in We have carefully considered the submissions of both the parties and perused the affidavit placed on record. Keeping in view the age, health condition, and technological limitations of the and applying a liberal interpretation to the expression , we are of the considered view that the assessee It is well settled that when substantial justice and technical against each other, the cause of substantial justice deserves to be preferred. Guided by this salutary principle, and in the absence of any mala fide or deliberate negligence, we condone the delay of 536 days in filing the appeal The principal grievance of the assessee in the present appeal is made under section 68 of tax Act, 1961, along with disallowance of interest of adequate opportunity to The assessment was completed under section 144 of the Act compliance with statutory notices. Before the first appellate authority also, the assessee failed to respond to Printed from counselvise.com multiple opportunities granted for filing submissions and evidence. Consequently, the Ld. CIT(A), after recording detailed reasons, upheld the additions and dismissed the appeal, observing that the assessee had not discharged the onus cast upon h remained non-cooperative throughout the proceedings. The relevant finding of Ld. CIT(A) is reproduced as under: “4.1. The order of the Ld. AO passed u/s 144 dated 11/05/2021 as well as the grounds of appeal and statement of facts filed by the appellant have been carefully considered. In essence, all the substantial grounds taken by the appellant relate to the action of the Ld. AO regarding addition of Rs. 11,10,93,681/ unexplained cash deposit under section 68 of the Income Tax Act 1961 and addition Rs. 46,00,926/ unsecured loans. 4.2. During the course of appellate proceedings, the appellant assessee was given several opportunities by fixing hearing on 21/11/2023 and 27/11/2023, to represent the ca written submission along with supporting document(s) if any. notice u/s 250 dated 23/11/2023, fixing the case of hearing dt. 27/11/2023, it is mentioned; \"What if we do not hear from you? If no submissions/information/documents is/ar stipulated time period, it will be presumed that you have nothing to say in this matter. The Department may proceed ahead based on material available on record.\" Further a show cause letter was issued to the appellant on 13.12.2023 re 22.12.2023 as to why appeal of the appellant should not be dismissed due to repeated non did not avail the opportunities to counter the findings of the Ld. AO and hence appellant's reluctanc presumption that he has either nothing to explain in this regard or is not interested to continue the appellate proceeding and thus has no objection at present regarding addition made by the Ld. AO in the impugned assessment order. The reason for the addition was specifically mentioned in detail in the assessment order but the appellant failed to upload any evidence or submission in support of the grounds of appeal. multiple opportunities granted for filing submissions and evidence. Consequently, the Ld. CIT(A), after recording detailed reasons, upheld the additions and dismissed the appeal, observing that the assessee had not discharged the onus cast upon h cooperative throughout the proceedings. The relevant finding of Ld. CIT(A) is reproduced as under: 4.1. The order of the Ld. AO passed u/s 144 dated 11/05/2021 as well as the grounds of appeal and statement of facts filed by the pellant have been carefully considered. In essence, all the substantial grounds taken by the appellant relate to the action of the Ld. AO regarding addition of Rs. 11,10,93,681/- unexplained cash deposit under section 68 of the Income Tax Act 1961 and addition Rs. 46,00,926/- on account of interest paid on unsecured loans. 4.2. During the course of appellate proceedings, the appellant assessee was given several opportunities by fixing hearing on 21/11/2023 and 27/11/2023, to represent the case by uploading written submission along with supporting document(s) if any. notice u/s 250 dated 23/11/2023, fixing the case of hearing dt. 27/11/2023, it is mentioned; \"What if we do not hear from you? If no submissions/information/documents is/are received within the stipulated time period, it will be presumed that you have nothing to say in this matter. The Department may proceed ahead based on material available on record.\" Further a show cause letter was issued to the appellant on 13.12.2023 requesting for an explanation 22.12.2023 as to why appeal of the appellant should not be dismissed due to repeated non-compliance. However, the appellant did not avail the opportunities to counter the findings of the Ld. AO and hence appellant's reluctancy to comply to the notices leads to the presumption that he has either nothing to explain in this regard or is not interested to continue the appellate proceeding and thus has no objection at present regarding addition made by the Ld. AO in the sessment order. The reason for the addition was specifically mentioned in detail in the assessment order but the appellant failed to upload any evidence or submission in support of the grounds of appeal. Umashankar Shiwaprasad Modi 5 ITA No. 5074/MUM/2025 multiple opportunities granted for filing submissions and evidence. Consequently, the Ld. CIT(A), after recording detailed reasons, upheld the additions and dismissed the appeal, observing that the assessee had not discharged the onus cast upon him and had cooperative throughout the proceedings. The relevant 4.1. The order of the Ld. AO passed u/s 144 dated 11/05/2021 as well as the grounds of appeal and statement of facts filed by the pellant have been carefully considered. In essence, all the substantial grounds taken by the appellant relate to the action of the - on account of unexplained cash deposit under section 68 of the Income Tax Act, on account of interest paid on 4.2. During the course of appellate proceedings, the appellant assessee was given several opportunities by fixing hearing on se by uploading written submission along with supporting document(s) if any. In the notice u/s 250 dated 23/11/2023, fixing the case of hearing dt. 27/11/2023, it is mentioned; \"What if we do not hear from you? If no e received within the stipulated time period, it will be presumed that you have nothing to say in this matter. The Department may proceed ahead based on material available on record.\" Further a show cause letter was issued questing for an explanation by 22.12.2023 as to why appeal of the appellant should not be compliance. However, the appellant did not avail the opportunities to counter the findings of the Ld. AO y to comply to the notices leads to the presumption that he has either nothing to explain in this regard or is not interested to continue the appellate proceeding and thus has no objection at present regarding addition made by the Ld. AO in the sessment order. The reason for the addition was specifically mentioned in detail in the assessment order but the appellant failed to upload any evidence or submission in support of Printed from counselvise.com 4.3. It is the well DORMENTIBUS, JURA SUBVENIUNT\" help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim once right she/he must be watchful of his/her rights. Only those persons, who a careful of using his/her rights, are eligible for the benefits of the law. Law confers rights on persons who are vigilant of their rights. In this connection, the various be cited. In the case o Commissioner of Wealth Tax (1997) (223 ITA 480 MP) the Hon'ble M.P. High Court held that, \"If the party, at whose instance the reference is made, fails to appear at the hearing, or falls in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference.\" Similarly, Hon'ble Punjab & Haryana High Court in the case of New Dewan Oil Mills Vs. CIT reported in (2008) 296/TR495 (P&H) had returned the reference unanswered, since the assessee remained absent and there was no assistance from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 ITR 461) (Pages 477, 478), the Hon'ble Supreme Court held that appeal does not mean, the mere filing of the the appeal but effectively pursuing the same\". The Hon'ble Delhi High Court in the case of CIT vs Gold Leaf Capital Corporation Ltd on 02.09.2011 in ITA No.798 of 2009 held that a negligent appellant should not be given many opportunities just bec the amount involved is high. The necessary course of action is to draw an adverse inference, otherwise, it would amount to giving a premium to the appellant for his negligence. When the appellant is non cooperative, it can safely be con want to adduce evidence as it would expose the falsity and non genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/ 2011 dated 19.12.2011) has dismissed the appeal inferring that the appellant is not effectively pursuing the appeal. 4.4. In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/S Chemipolvs Union of India, Central Excise Appeal No.62 of 2009 may furt clearly held that every court, judicial Body or Authority, which has a duty to decide a case between two parties, inherently power to dismiss the case in default 4.5. On merits also, the appellan taken by the appellant relates to addition of of 4.3. It is the well-settled dictum of law \"VIGILENT DORMENTIBUS, JURA SUBVENIUNT\" which means the law will help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim once right she/he must be watchful of his/her rights. Only those persons, who a careful of using his/her rights, are eligible for the benefits of the law. Law confers rights on persons who are vigilant of their rights. In this connection, the various judicious decisions of the Hon'ble Courts may be cited. In the case of the Estate of Late TukojiraoHolkarvs Commissioner of Wealth Tax (1997) (223 ITA 480 MP) the Hon'ble M.P. High Court held that, \"If the party, at whose instance the reference is made, fails to appear at the hearing, or falls in taking steps for n of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference.\" Similarly, Hon'ble Punjab & Haryana High Court in the case of New Dewan Oil Mills Vs. CIT reported in (2008) 296/TR495 (P&H) had returned the ference unanswered, since the assessee remained absent and there was no assistance from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 ITR 461) (Pages 477, 478), the Hon'ble Supreme Court held that appeal does not mean, the mere filing of the the appeal but effectively pursuing the same\". The Hon'ble Delhi High Court in the case of CIT vs Gold Leaf Capital Corporation Ltd on 02.09.2011 in ITA No.798 of 2009 held that a negligent appellant should not be given many opportunities just because the quantum of the amount involved is high. The necessary course of action is to draw an adverse inference, otherwise, it would amount to giving a premium to the appellant for his negligence. When the appellant is non cooperative, it can safely be concluded that the appellant did not want to adduce evidence as it would expose the falsity and non genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/ 2011 dated 19.12.2011) has dismissed the appeal for non-attending hearing inferring that the appellant is not effectively pursuing the appeal. 4.4. In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/S Chemipolvs Union of India, Central Excise Appeal No.62 of 2009 may further be referred to wherein the Hon'ble Court clearly held that every court, judicial Body or Authority, which has a duty to decide a case between two parties, inherently power to dismiss the case in default 4.5. On merits also, the appellant has no case. The main ground taken by the appellant relates to addition of of Rs. 11,10,93,681/ Umashankar Shiwaprasad Modi 6 ITA No. 5074/MUM/2025 \"VIGILENTIBUS, NO which means the law will help only those who are vigilant. Law will not assist those who are careless of his/her right. In order to claim once right she/he must be watchful of his/her rights. Only those persons, who are watchful and careful of using his/her rights, are eligible for the benefits of the law. Law confers rights on persons who are vigilant of their rights. In this judicious decisions of the Hon'ble Courts may f the Estate of Late TukojiraoHolkarvs Commissioner of Wealth Tax (1997) (223 ITA 480 MP) the Hon'ble M.P. High Court held that, \"If the party, at whose instance the reference is made, fails to appear at the hearing, or falls in taking steps for n of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference.\" Similarly, Hon'ble Punjab & Haryana High Court in the case of New Dewan Oil Mills Vs. CIT reported in (2008) 296/TR495 (P&H) had returned the ference unanswered, since the assessee remained absent and there was no assistance from the assessee. In the case of CIT vs B. N. Bhattacharya. (118 ITR 461) (Pages 477, 478), the Hon'ble Supreme Court held that appeal does not mean, the mere filing of the memo of the appeal but effectively pursuing the same\". The Hon'ble Delhi High Court in the case of CIT vs Gold Leaf Capital Corporation Ltd on 02.09.2011 in ITA No.798 of 2009 held that a negligent appellant ause the quantum of the amount involved is high. The necessary course of action is to draw an adverse inference, otherwise, it would amount to giving a premium to the appellant for his negligence. When the appellant is non- cluded that the appellant did not want to adduce evidence as it would expose the falsity and non- genuineness of his claim. The Hon'ble ITAT, Delhi in the case of Whirlpool India Ltd vs DCIT (ITA No.2006/Del/ 2011 dated attending hearing inferring that the appellant is not effectively pursuing the appeal. 4.4. In this regard, the decision of the Hon'ble High Court of Mumbai in the case of M/S Chemipolvs Union of India, Central Excise Appeal her be referred to wherein the Hon'ble Court clearly held that every court, judicial Body or Authority, which has a duty to decide a case between two parties, inherently -possesses the t has no case. The main ground Rs. 11,10,93,681/- on Printed from counselvise.com account of unexplained cash deposit under section 68 of the Income Tax Act, 1961 and addition Rs. 46,00,926/ paid on unsecured loan the appellant filed a return of income declaring total income Rs. 60,43,310/- for the AY 2018 issued but not responded. The assessee in this regard said that the notices were received by the accountant of the appellant, however, the said accountant resigned and the assessee was not able to submit response. Consequently, due to non the national e-assessment center proceeded with the information available on records and completed the assessment under section 144 of the income tax act. While completing the assessment of the appellant additions were made under section 68 wherein the loans taken from the related parties were added as unexplained cash cre which amounting to Rs 11,10,93,681/ the assessment order that the assessee had failed to respond to notices and proved that the assessee had nothing to explain in the matter regarding addition of interest disallowed of Rs. 4.6. During the course of appellate proceeding, the appellant failed to explain the grounds taken against the issues. The reason for addition was mentioned in the assessment order. However, the appellant made no effort to counter the findings uploading relevant document(s) or explaining the matter in detail and chose to remain silent about the issue. It is seen from the assessment order that The auditor in form 3CD had reported unsecured loan raised during the year whic Table 1 S No. Name of the lender or depositor 1 Overseas Packing Industries Pvt Ltd 2 Pancheel plastic Pvt Ltd account of unexplained cash deposit under section 68 of the Income Tax Act, 1961 and addition Rs. 46,00,926/-on account of interest paid on unsecured loans. It is seen from the assessment order that the appellant filed a return of income declaring total income Rs. for the AY 2018-2019. Notices under section 142(1) were issued but not responded. The assessee in this regard said that the ere received by the accountant of the appellant, however, the said accountant resigned and the assessee was not able to submit response. Consequently, due to non-compliance of the notices assessment center proceeded with the information lable on records and completed the assessment under section 144 of the income tax act. While completing the assessment of the appellant additions were made under section 68 wherein the loans taken from the related parties were added as unexplained cash cre amounting to Rs 11,10,93,681/-. The Ld.AO had mentioned in the assessment order that the assessee had failed to respond to notices and proved that the assessee had nothing to explain in the matter regarding addition of interest disallowed of Rs. 4.6. During the course of appellate proceeding, the appellant failed to explain the grounds taken against the issues. The reason for addition was mentioned in the assessment order. However, the appellant made no effort to counter the findings of the Ld. AO either by uploading relevant document(s) or explaining the matter in detail and chose to remain silent about the issue. It is seen from the assessment The auditor in form 3CD had reported unsecured loan raised during the year which was mentioned in table Name of the lender or PAN No. Amount of loan or deposit taken Or accepted Industries Pvt AAAC00576G 10,86,82,105/ Pancheel plastic AAACP0521C 14,11,576/- Umashankar Shiwaprasad Modi 7 ITA No. 5074/MUM/2025 account of unexplained cash deposit under section 68 of the Income on account of interest It is seen from the assessment order that the appellant filed a return of income declaring total income Rs. 2019. Notices under section 142(1) were issued but not responded. The assessee in this regard said that the ere received by the accountant of the appellant, however, the said accountant resigned and the assessee was not able to compliance of the notices assessment center proceeded with the information lable on records and completed the assessment under section 144 of the income tax act. While completing the assessment of the appellant additions were made under section 68 wherein the loans taken from the related parties were added as unexplained cash credit . The Ld.AO had mentioned in the assessment order that the assessee had failed to respond to notices and proved that the assessee had nothing to explain in the matter regarding addition of interest disallowed of Rs. 46,00,926/-. 4.6. During the course of appellate proceeding, the appellant failed to explain the grounds taken against the issues. The reason for addition was mentioned in the assessment order. However, the appellant of the Ld. AO either by uploading relevant document(s) or explaining the matter in detail and chose to remain silent about the issue. It is seen from the assessment The auditor in form 3CD had reported unsecured loan Amount of loan or deposit taken Or Maximum amount outstanding in the account at any time during the year previous 0,86,82,105/- 94121021 1411576 Printed from counselvise.com 3 Kaushal Kumar Modi 4 R G Chawada sons HUF and Total Only one lender i.e. Kushal Kumar Modi copy of ledger account pertaining to the assessee, copy of ITR of A.Y 2018-19 and bank statement; thus unsecured loan extended by Kushal Kumar Modi of Rs. 28,78,180/ while others did not respond, t could not be ascertained to the satisfaction of AO, hence unsecured loan amounting of Rs. 11,10,93,681/ 28,78,180) was treated as unexplained cash credit u/s. 68 of the Income Tax Act. 1961 and ad also seen from the assessment order that, on perusal of ITR, it was found that the assessee paid year. The assessee reported to have raised unsecured loan amounting to Rs. 11, mention here that both the assessee and lenders had failed to respond to notices issued which showed their gross non the statutory notices and proved that neither the assessee nor the lenders had nothing to submit/explain in the matter. The assessee in the ITR had claimed an expense on account of 46,82,747/-. However, as the unsecured loans were treated as unexplained cash credit in the hands of the assessee, interest expense on the same could not be allowed. The lender Kushal Kumar Modi confirmed the loan and submitted that the interest of Rs. 81,821/- was received on the loan during the year. The same was allowed out of total interest component of 46,82,747/ Rest of the interest amount of Rs. 46,00,926/ disallowed and added to the total income of the appellant. The assessee failed to meet the onus of providing documentary evidence to establish the genuineness, creditworthiness and identity of lenders, leading to the inclusion of unsecured loan amount in the assessee's income. Although in the statement of facts, the appellant stated that various unforeseen situations such as resignation of the accountant and pandemic related situation refrained him from complying, the appellant offered no explanation or supporting evidence about the nature and source of the money. During the appellate proceedings, in spite of filing elaborate grounds of appeal and being provided adequate opportunities of filing explanatio supporting documents the appellant preferred to remain silent by not Kaushal Kumar AFJPM2298G 28,78,180/- R G Chawada sons HUF and 10,00,000/- Rs. 11,39,71,861 Only one lender i.e. Kushal Kumar Modi submitted confirmation letter, copy of ledger account pertaining to the assessee, copy of ITR of A.Y 19 and bank statement; thus unsecured loan extended by Kushal Kumar Modi of Rs. 28,78,180/- was verified and accepted, while others did not respond, the genuineness of the unsecured loan could not be ascertained to the satisfaction of AO, hence unsecured loan amounting of Rs. 11,10,93,681/-(Rs. 11,39,71,861 28,78,180) was treated as unexplained cash credit u/s. 68 of the Income Tax Act. 1961 and added to the income of the appellant. It is also seen from the assessment order that, on perusal of ITR, it was found that the assessee paid Rs. 46,82,747/- as interest during the year. The assessee reported to have raised unsecured loan amounting to Rs. 11,39,71,861, during the year. It is quite pertinent to mention here that both the assessee and lenders had failed to respond to notices issued which showed their gross non the statutory notices and proved that neither the assessee nor the nothing to submit/explain in the matter. The assessee in the ITR had claimed an expense on account of . However, as the unsecured loans were treated as unexplained cash credit in the hands of the assessee, interest on the same could not be allowed. The lender Kushal Kumar Modi confirmed the loan and submitted that the interest of Rs. was received on the loan during the year. The same was allowed out of total interest component of 46,82,747/ Rest of the rest amount of Rs. 46,00,926/- (46,82,747 disallowed and added to the total income of the appellant. The assessee failed to meet the onus of providing documentary evidence to establish the genuineness, creditworthiness and identity of leading to the inclusion of unsecured loan amount in the assessee's income. Although in the statement of facts, the appellant stated that various unforeseen situations such as resignation of the accountant and pandemic related situation refrained him from the appellant offered no explanation or supporting evidence about the nature and source of the money. During the appellate proceedings, in spite of filing elaborate grounds of appeal and being provided adequate opportunities of filing explanatio supporting documents the appellant preferred to remain silent by not Umashankar Shiwaprasad Modi 8 ITA No. 5074/MUM/2025 1756038 1000000 11,39,71,861 submitted confirmation letter, copy of ledger account pertaining to the assessee, copy of ITR of A.Y- 19 and bank statement; thus unsecured loan extended by was verified and accepted, he genuineness of the unsecured loan could not be ascertained to the satisfaction of AO, hence unsecured (Rs. 11,39,71,861- Rs. 28,78,180) was treated as unexplained cash credit u/s. 68 of the ded to the income of the appellant. It is also seen from the assessment order that, on perusal of ITR, it was as interest during the year. The assessee reported to have raised unsecured loan It is quite pertinent to mention here that both the assessee and lenders had failed to respond to notices issued which showed their gross non-compliance to the statutory notices and proved that neither the assessee nor the nothing to submit/explain in the matter. The assessee in interest of Rs. . However, as the unsecured loans were treated as unexplained cash credit in the hands of the assessee, interest on the same could not be allowed. The lender Kushal Kumar Modi confirmed the loan and submitted that the interest of Rs. was received on the loan during the year. The same was allowed out of total interest component of 46,82,747/ Rest of the (46,82,747-81,821) was disallowed and added to the total income of the appellant. The assessee failed to meet the onus of providing documentary evidence to establish the genuineness, creditworthiness and identity of leading to the inclusion of unsecured loan amount in the assessee's income. Although in the statement of facts, the appellant stated that various unforeseen situations such as resignation of the accountant and pandemic related situation refrained him from the appellant offered no explanation or supporting evidence about the nature and source of the money. During the appellate proceedings, in spite of filing elaborate grounds of appeal and being provided adequate opportunities of filing explanations and supporting documents the appellant preferred to remain silent by not Printed from counselvise.com availing the opportunities provided. The appellant did not comply to the departmental notices both during assessment proceedings as well as during appellate proceedings. 4.6 In view of this, I find no reason to interfere into the order of the Ld. AO and the same is upheld accordingly. Therefore, substantial grounds taken by the appellant are dismissed 5. Before us, the Ld. Counsel for the assessee prayed for one final opportunity to substantiate the claims on merits and to place relevant material on record. The Ld. Departmental Representative strongly opposed the request, contending that repeated non compliance at both assessment and appellate stages disentitled the assessee from any further indulgence. 6. We have thoughtfully considered the rival submissions and examined the record. comply with the statutory notices issued during the assessment proceedings as well as during conduct cannot be approved and ordinarily disentitles a litigant from seeking repeated indulgence. 6.1 At the same time, it is equally well settled that the principles of natural justice are not empty formalities but that no person is condemned unheard, particularly where the determination entails serious civil consequences. The additions made in the present case are substantial in nature and pertain to alleged unexplained unsecured loans and con availing the opportunities provided. The appellant did not comply to the departmental notices both during assessment proceedings as well as during appellate proceedings. ew of this, I find no reason to interfere into the order of the Ld. AO and the same is upheld accordingly. Therefore, substantial grounds taken by the appellant are dismissed Before us, the Ld. Counsel for the assessee prayed for one portunity to substantiate the claims on merits and to place relevant material on record. The Ld. Departmental Representative strongly opposed the request, contending that repeated non compliance at both assessment and appellate stages disentitled the see from any further indulgence. We have thoughtfully considered the rival submissions and examined the record. It is not in dispute that the assessee failed to comply with the statutory notices issued during the assessment proceedings as well as during the first appellate proceedings. Such conduct cannot be approved and ordinarily disentitles a litigant from seeking repeated indulgence. At the same time, it is equally well settled that the principles of natural justice are not empty formalities but are intended to ensure that no person is condemned unheard, particularly where the determination entails serious civil consequences. The additions made in the present case are substantial in nature and pertain to alleged unexplained unsecured loans and con Umashankar Shiwaprasad Modi 9 ITA No. 5074/MUM/2025 availing the opportunities provided. The appellant did not comply to the departmental notices both during assessment proceedings as well ew of this, I find no reason to interfere into the order of the Ld. AO and the same is upheld accordingly. Therefore, all the substantial grounds taken by the appellant are dismissed.” Before us, the Ld. Counsel for the assessee prayed for one portunity to substantiate the claims on merits and to place relevant material on record. The Ld. Departmental Representative strongly opposed the request, contending that repeated non- compliance at both assessment and appellate stages disentitled the We have thoughtfully considered the rival submissions and It is not in dispute that the assessee failed to comply with the statutory notices issued during the assessment the first appellate proceedings. Such conduct cannot be approved and ordinarily disentitles a litigant At the same time, it is equally well settled that the principles of are intended to ensure that no person is condemned unheard, particularly where the determination entails serious civil consequences. The additions made in the present case are substantial in nature and pertain to alleged unexplained unsecured loans and consequential Printed from counselvise.com disallowance of interest, which strike at the very root of the assessment and directly affect the civil rights of the assessee. 6.2 The appellate process is ultimately intended to advance the cause of justice, and where an assessee expresses wil comply and substantiate the claim, a final opportunity may be granted, subject to safeguards, so that the matter is decided on merits rather than on technical defaults. 6.3 Considering the totality of facts and circumstances, and in the interest of justice, we deem it appropriate to order of the Ld. CIT(A) and Assessing Officer for fresh adjudication, after granting adequate opportunity to the assessee to furnish evidence and explanati support of the unsecured loans and related interest. 6.4 However, having regard to the past non indulgence is made subject to payment of costs of shall be deposited by the assessee in the Fund within one month from the date of receipt of this order. The assessee is further directed to strictly comply with all notices issued by the Assessing Officer within the time prescribed, failing which the Assessing Officer shall be at liberty to proceed in with law. 6.5 Accordingly, the ground No allowed. The other grounds raised on the merits of the issue are not disallowance of interest, which strike at the very root of the assessment and directly affect the civil rights of the assessee. The appellate process is ultimately intended to advance the cause of justice, and where an assessee expresses wil comply and substantiate the claim, a final opportunity may be granted, subject to safeguards, so that the matter is decided on merits rather than on technical defaults. Considering the totality of facts and circumstances, and in the t of justice, we deem it appropriate to set aside order of the Ld. CIT(A) and restore the matter to the file of the for fresh adjudication, after granting adequate opportunity to the assessee to furnish evidence and explanati support of the unsecured loans and related interest. However, having regard to the past non-compliance, this subject to payment of costs of ₹11,000/ shall be deposited by the assessee in the Prime Minister’s Relief within one month from the date of receipt of this order. The assessee is further directed to strictly comply with all notices issued by the Assessing Officer within the time prescribed, failing which the Assessing Officer shall be at liberty to proceed in the ground Nos. 1 and 2 of the appeal are allowed. The other grounds raised on the merits of the issue are not Umashankar Shiwaprasad Modi 10 ITA No. 5074/MUM/2025 disallowance of interest, which strike at the very root of the assessment and directly affect the civil rights of the assessee. The appellate process is ultimately intended to advance the cause of justice, and where an assessee expresses willingness to comply and substantiate the claim, a final opportunity may be granted, subject to safeguards, so that the matter is decided on Considering the totality of facts and circumstances, and in the set aside the impugned restore the matter to the file of the for fresh adjudication, after granting adequate opportunity to the assessee to furnish evidence and explanations in compliance, this 11,000/-, which Prime Minister’s Relief within one month from the date of receipt of this order. The assessee is further directed to strictly comply with all notices issued by the Assessing Officer within the time prescribed, failing which the Assessing Officer shall be at liberty to proceed in accordance . 1 and 2 of the appeal are allowed. The other grounds raised on the merits of the issue are not Printed from counselvise.com required to be adjudicated at this stage back to the file of the 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on Sd/- (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 13/01/2026 Disha Raut, Stenographer Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// to be adjudicated at this stage as the matter is restore back to the file of the ld AO. appeal of the assessee is allowed for statistical nounced in the open Court on 13/0 Sd/ SANDEEP GOSAIN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Umashankar Shiwaprasad Modi 11 ITA No. 5074/MUM/2025 the matter is restored appeal of the assessee is allowed for statistical /01/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "