VIJAY ISRANI,DELHI V. DCIT,CENTRAL CIRCLE-6, DELHI

ITA 752/DEL/2025

AI Insights

The case involves Vijay Israni, the appellant, who contested the order of the Commissioner of Income Tax (Appeals)-24, New Delhi, which confirmed an addition of Rs.1,01,00,000 as unexplained cash credits under section 68 of the Income Tax Act, 1961. The original assessment was reopened under section 148 due to doubts about the genuineness of the credits/loans in the hands of the assessee. The CIT(A) dismissed the appeal due to non-prosecution after multiple opportunities were given to the appellant. The Tribunal found that the CIT(A) had not adjudicated the case on merits and was not empowered to dismiss the appeal for non-prosecution without addressing the issues on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712256 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2013-2014
• Other Referred Cases: CIT vs. Premkumar Arjundas Luthra HUF, MARC Laboratories Ltd. in ITA No.2731, 2732, 2733, 2730, 2734 & 2735/DEL/ 2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Principle of natural justice; Source of fund
• Section: 147; 148; 143(3); 68

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.752 /Del./2025, A.Y. 2013-14 Vijay Israni S-12, Green Park Main, Green Park Market, New Delhi-110016 PAN: AABPI1192E Vs. Dy. Commissioner of Income Tax, Central Circle-6, 2nd Floor, ARA Centre, Jhandewalan Extn., New Delhi (Appellant) (Respondent) Appellant by None Respondent by Shri Om Prakash, Sr. DR Date of Hearing 28/07/2025 Date of Pronouncement 28/07/2025 ORDER PER AVDHESH KUMAR MISHRA, AM The appeal for the Assessment Year (‘AY’) 2013-14 filed by the assessee is directed against the order dated 12.12.2024 of the Commissioner of Income Tax (Appeals)-24, New Delhi [‘CIT(A)’]. 2. The assessee has raised following grounds of appeal: - “1. That on the facts and circumstances of the case the Ld. CIT(A) has grossly erred in not quashing the impugned order passed u/s 147 of the Act as the is not only bad in law and nature but it also whimsical as: (a) the Ld. AO has wrongly assumed jurisdiction under section 148 whereas the assessment should have been made under the provisions of section 153C of the Income Tax Act; and/or (b) the reasons have been recorded for verification of information, and/or Printed from counselvise.com ITA No.752/Del/2025 Vijay Israni 2 (c) the reasons to believe were colored in the nature of reasons to suspect rather than the reasons to believe; and/or (d) the information available with the Ld.AO was already recorded in the books and accounts of the assessee; and/or (e) arbitrary information held in piecemeal has been used by the Ld. AO to frame the assessment ignoring the facts of the case; and/or (f) the reasons have been recorded without making any enquiry and without applying independent mind; and/or (g) the approval has been given by higher authorities in a mechanical manner. 2. That the order passed by the Ld. CIT(A) is bad in law and nature and liable to be quashed as a) The assessee was deprived of the legitimate right of making submission during the appellate proceedings against the additions made in the assessment order. b) The Ld. CIT(A) while passing the appellate order did not follow the principle of natural justice. c) The Ld. CIT(A) has re-iterated the finding of the AO and opinion has been formed through the already available facts d) The Ld. CIT(A) has passed a non-speaking order as repetitions of facts do not form basis of any opinion. 3. That on the facts and circumstances of the case the Ld. CIT(A) has grossly erred in confirming the addition of Rs.1,01,00,000/- on account of unsecured loans received from the group company of the assessee made under section 68 on account of unexplained cash credits. 4. That on facts and circumstances of the case the Ld. CIT(A) has grossly erred in confirming the addition made on account of unexplained cash credit wherein the assessee being an individual was not required to prove the source of source of the loans received for the year under consideration under the provisions of section 68 of the Income Tax Act, 1961. On the contrary the assessee had duly explained the source of the money received which was not considered. Printed from counselvise.com ITA No.752/Del/2025 Vijay Israni 3 5. That on the facts and circumstances of the case the Ld. CIT(A) has grossly erred in confirming the additions made in the assessment order because, a) The income added to the total income of the assessee was already part of the books of accounts represented in the form of unsecured loans; b) The arbitrary list of the shareholders of the creditor company was looked into whereas the actual shareholders were not considered and the identity of the shareholders was already established through the statement of the common director under oath. c) the source of funds received by the assessee has been overlooked and the same was beyond the time frame as per law. 6. The appellant craves leave for addition, modification, alteration, amendment of any of the grounds of appeal.” 2.1 Vide above-mentioned grounds, the assessee has challenged not only the validity of reopening of the assessment order but also the genuineness of addition of Rs.1,01,00,000/- under section 68 of the Income Tax Act, 1961 (‘Act’). 3. The relevant facts giving rise to this appeal are that the assessee filed his original Income Tax Return (‘ITR’) on 31.03.2015 declaring income of Rs.52,61,420/-. The case was scrutinized and consequential assessment was completed at income of Rs.1,00,12,660/- under section 143(3) of the Act. Thereafter, the case was reopened under section 148 of the Act on the reasoning that the credit/loan in the hands of the assessee were not genuine. The reopening challenged by the assessee vide writ petition was dismissed by the Hon’ble Delhi High Court (as detailed in para-7 of the assessment order). Consequential assessment was completed at income of Printed from counselvise.com ITA No.752/Del/2025 Vijay Israni 4 Rs.2,01,12,660/- by making addition of Rs.1,01,00,000/- under section 68 of the Act. Aggrieved, the assessee filed appeal before the CIT(A), who dismissed the appeal due to non-prosecution after providing 10 opportunities of being heard to the appellant assessee. (as detailed in para 4.2.1 of the impugned order). 4. Before us, none appeared on behalf of the assessee. Therefore, we heard the Ld. Sr. Departmental Representative (‘Sr. DR’). With the help of facts mentioned in orders of the Authorities below, the Ld. Sr. DR submitted that sufficient opportunities of being heard were provided to the appellant assessee not only by the AO but also by the Ld. CIT(A) but in vain. He submitted that the appellant assessee tactfully ensured noncompliance to avoid proper investigations. Hence, he prayed for dismissal of the appeal. On specific query by us, the Sr. DR admitted that the issue in dispute had not been decided on merit by the Ld. CIT(A). 5. We have heard Ld. Sr. DR and have perused the material available on the record. We take note of the fact that the Ld. CIT(A) has dismissed the appeal ex-parte due to non-prosecution and has not adjudicated the case on merits. Moreover, the Ld. CIT(A) has not decided each ground of appeal after discussing the issues in detail and his reasons for agreeing with the assessment order though he, 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 consideration. It is evident from Printed from counselvise.com ITA No.752/Del/2025 Vijay Israni 5 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. 6. Section 251(1)(a) of the Act provides that while disposing of an appeal against assessment order, the Ld. CIT(A) shall have the power to confirm, reduce, enhance or annul the assessment. Similarly, the section 251(1) (b) of the Act provides that in disposing of an appeal against an order imposing a penalty, the Ld. CIT(A) may confirm or cancel such orders or vary it so as to either to enhance or to reduce the penalty. 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, it is concluded that the Ld. CIT(A) is not empowered to dismiss the appeal for non-prosecution of appeal and is obliged to dispose of the appeal on merits. In this regard, the finding of the coordinate bench in the case of MARC Laboratories Ltd. in ITA No.2731, 2732, 2733, 2730, 2734 & 2735/DEL/ 2022 is worth extracting as under: “5. We straightway refer to Section 250(6) of the Act which enjoins that the CIT(A) shall state the points for determination before it and the decision shall be rendered on such points along with reasons for the decision. Thus, it is incumbent upon the CIT(A) to deal with the grounds on merits even in ex parte order. In view of Section 250(6) of the Act, the CIT(A) has no power to dismiss an appeal on account of non-prosecution. This view is also taken by the Hon'ble Bombay High Court in case of CIT vs. Premkumar Arjundas Luthra HUF, (2017) 291 CTR 614 (Bom.). A bare glance of the order of the CIT(A) shows that CIT(A) has not addressed itself on various Printed from counselvise.com ITA No.752/Del/2025 Vijay Israni 6 points placed for its determination at all and dismissed the appeal of assessee for default in non-appearance. Needless to say, the CIT(A) plays role of both adjudicating authority as well as appellate authority. Thus, the CIT(A) could not have shunned the appeal for non-compliance without addressing the issue on merits. 6. In the totality of the circumstances, we consider it just and expedient to restore the matter back to the CIT(A) in the larger interest of justice with a view to enable the assessee to avail proper opportunity for disposal of appeal by the CIT(A) on various points. The assessee is cautioned to extend full co-operation to the CIT(A) without any demur, failing which, the CIT(A) shall be at liberty to conclude the appellate proceedings in accordance with law. Hence, the order of the CIT(A) appealed against, is set aside and all the issues raised in the impugned appeal are restored back to the file of the CIT(A) for fresh adjudication in accordance with law after giving reasonable opportunity of hearing to the assessee.” 7. In view the above, without offering any comment on merit of the case, we deem it fit to set aside the impugned order and remit the matter back to the file of the CIT(A) for deciding the case afresh, in accordance with law, after providing adequate opportunity of being heard to the appellant assessee. Ordered accordingly. The appellant assessee, no doubt, shall cooperate in remitted appellate proceedings. 8. In the result, the assessee’s appeal is allowed for statistical purposes. Order pronounced in open Court on 28th July, 2025 Sd/- Sd/- (SATBEER SINGH GODARA) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:28/07/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant Printed from counselvise.com ITA No.752/Del/2025 Vijay Israni 7 2. Respondent 3. PCIT/CIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "