Jusbinder Kour vs ITO, Ward 3(1)(2)

PER RAMIT KOCHAR, AM: .

This appeal is filed by the assessee against the appellate order passed by the learned Commissioner of Income Tax, Appeal, NFAC, Delhi [‘CIT(A)’ in short] dated 29.01.2026 u/s 250 of the Income Tax Act, 1961(DIN & Order No. ITBA/NFAC/S/ 250 / 2025-26/1085289894(1)), which appeal in turn has arisen from the assessment order dated 16.01.2025 passed by the learned Assessing Officer u/s 147 r.w.s. 144 r.w.s. 144B of the 1961 Act (DIN No. ITBA/AST/S/147/2024-25/1072237455(1)).

It is observed that this appeals is filed belatedly by assessee with the Tribunal with delay of 23 days beyond the time stipulated under Section 253(3) of the 1961 Act. It is averred that there was time taken to search counsel who can represent assessee before the Tribunal, there was delay of 23 days in filing this appeal with the Tribunal . The affidavit dated 15.04.2026 is filed by the assessee,which is placed on record in n file. Prayers are made by assessee to condone this delay of 23 days in filing this appeal belatedly with the Tribunal. Keeping in view sufficient cause shown by assessee, we condone the aforesaid delay of 23 days in filing this appeal belatedly by assessee with Tribunal, and proceed to adjudicate this appeal on merits in accordance with law. When technicalities are pitted against the substantive justice, the Courts will lean towards advancement of substantial justice, unless malice is at writ large or there is a gross negligence. We donot find any malice or gross negligence on the part of assessee in filing this appeal belatedly with the Tribunal. Sufficient cause is shown by assessee in filing this appeal belatedly, hence delay stand condoned. Reference is drawn to the judgment and order of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. 1987(2) SCC 107.

Brief facts of the case are that the assessee is an individual having filed return of income declaring income of Rs.10,41,800/-, on 04.01.2021.The assessee has declared salary income. Information was received by the AO for verification wrt cash deposits to the tune of Rs. 21,90,000/- and purchase of immovable property for the sum of Rs. 74,00,000/-. As per Revenue, the said transactions were not in commensurate with the income declared by the assessee in return of income filed with department. The assessee was asked by the AO to explain the same, but there was no response from the assessee. The AO initiated proceedings against the assessee u/s 148 of the 1961 Act . Statutory notices u/s 148, 142(1) , 144 and SCN were issued from time to time by the AO to the assessee during the course of reassessment proceedings, the details are recorded in assessment order, but there was no response/reply from the assessee. During the reassessment proceedings, the AO called for information u/s 133(6) directly from the banks viz. Punjab and Sind Bank and Union Bank of India, wrt bank accounts maintained by the assessee in the said banks, and it transpired that total cash deposits and other credits were to the tune of Rs. 80,94,750/-(excluding receipt on account of loan of Rs.34,00,000/- availed by the assessee) .There were no explanation by the assessee despite several opportunities granted by the AO, and hence the same was added by the AO to the income of the assessee as the assessee failed to explain the nature and source of cash deposits and other deposits to the tune of Rs. 80,94,750/-in her bank account and the same were considered unexplained money and added to the income of the assessee by the AO as per provisions of Section 69A of the 1961 Act. Further, the assessee has purchased immovable property to the tune of Rs. 74,00,000/- , and the assessee could not explain the source of investment in the aforesaid property despite several opportunities granted by the AO, which led AO to make additions to the income of the assessee to the tune of Rs. 74,00,000/- u/s 69 of the 1961 Act.

Aggrieved, the assessee filed first appeal with ld. CIT(A) . Despite as many as four notices issued by the ld. CIT(A) during the course of appellate proceedings, the assessee did not responded to any of the notices issued by ld. CIT(A), which led to dismissal of the appeal of the assessee by ld. CIT(A) because as per ld. CIT(A) , the assessee is not interested in pursuing its appeal, and the assessment order passed by ld. AO was confirmed.

Still Aggrieved , the assessee filed second appeal with ITAT. The ld. Counsel for the assessee submitted that an ex-parte order was passed by ld. CIT(A) without deciding the issues on merits in violation of Section 250(6) of the 1961 Act. The counsel for the assessee filed bank statements , and submitted that loan availed from bank need to be excluded, for which verification can be done by the authorities. It was submitted that due to health conditions , the assessee could not comply before AO. It was submitted that the assessee availed home loan for buying property as well availed amounts from relatives for said acquisition, which can be verified by the authorities. It is prayed that if one more opportunity is provided, the assessee will submit all relevant details .The ld. Sr. DR has relied upon the appellate order passed by ld. CIT(A), while the assessee has prayed that the matter may be restored back to the file of ld. CIT(A) for fresh adjudication of the appeal of the assessee.

We have considered the entire material on records and heard rival parties. The facts in brief are enumerated above , and are not repeated. We have observed that the ld. CIT(A) dismissed the appeal of the assessee ex-parte without deciding the issues arising in the appeal on merits by passing a non speaking cryptic order. The ld. CIT(A) has claimed to have issued as many as four notices during the course of appellate proceedings , but the assessee did not responded to these notices nor adjournment were sought. The ld. CIT(A) simply dismissed the appeal of the assessee ex-parte by affirming the reassessment order passed by the AO , without deciding the issues arising in the appeal on merits, mainly on account of non compliance by the assessee to the four notices issued by ld. CIT(A) by holding that the assessee is not interested in pursuing its appeal. The appellate order passed by ld. CIT(A) is a non speaking order passed ex-parte in limine without deciding the issue arising in the appeal on merits. The ld. CIT(A) is required and obligated to pass appellate order in compliance with the provisions of section 250(6) of the 1961 Act(Now Section 359(4) of the Income-tax Act, 2025), as ld. CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. Reference is drawn to provisions of Section 250(6) of the 1961 Act (Now Section 359(4) of the Income-tax Act, 2025), wherein ld.CIT(A) has to state point for determination, his decision and reasons thereof. The ld.CIT(A) even did not made any enquiry, and even assessment records were not called by ld.CIT(A). The ld. CIT(A) did not made any enquiry to unravel the truth as it is claimed by the assessee that she took home loan from bank to buy property apart from availing amounts from relatives for said acquisition . The appellate order passed by ld. CIT(A) is subject to further appeal with ITAT u/s 253 of the 1961 Act (Now Section 362 of the 2025 Act). The appellate order passed by ITAT is subject to further appeal before Hon’ble High Court u/s 260A(Now Section 365 of the 2025 Act). The judgment and order passed by Hon’ble High Court is also subject to challenge before Hon’ble Supreme Court. Thus, the appellate order passed by ld. CIT(A) is not a final order, as it is subject to challenge before higher appellate authority. Thus, Reasons which weighed in the minds of the adjudicating authority while adjudicating appeal on merits of the issues are cardinal as the higher appellate authority can then adjudicate appeal on the issues arising in appeal before them, based on decision and reasoning of ld. CIT(A) in deciding the issues. If the ld. CIT(A) simply dismiss the appeal merely because the assessee did not comply with the notices issued by ld. CIT(A) in limine without adjudicating issues arising in the appeal on merits , such order is not sustainable in the eyes of law keeping in view provisions of Section 250(6) (Now Section 359(4) of the 2025 Act) , and also higher appellate authorities will be deprived to see what weighed in the mind of the ld. CIT(A) while adjudicating appeal as it will be an order passed without reasoning on the issues on merits . The appellate order of the CIT(A) is clearly in violation of section 250(6) of the 1961 Act(Now Section 359(4) of the 1961 Act), and liable to be set aside. Merely stating the reassessment order passed by AO is upheld, and that the assessee has not submitted details/documents/evidences before ld. CIT(A) or that the assessee is not interested in pursuing its appeal , is not sufficient. The ld. CIT(A) is not toothless as his powers are co-terminus with the powers of the AO, which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) during appellate proceedings, and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes as the assessee did not comply with the notices issued by the ld. CIT(A). Keeping in view the entire factual matrix as culled out above in the preceding para’s of this order, it will be fair to both the parties as well in the interest of justice, that the appellate order of ld. CIT(Appeals) be set aside and the matter be remanded back to the file of ld. CIT(Appeals) for fresh adjudication after giving proper opportunity of being heard to both the parties w.r.t. the issues arising in the appeal. The assessee is directed to comply with the notice issued by ld. CIT(Appeals) during the appellate proceedings in set aside remand proceedings, otherwise ld. CIT(A) shall be free to decide the appeal ex-parte on merits in accordance with law, after complying with provisions of Section 250(6) of the 1961 Act (Now Section 359(4) of the 2025 Act). We clarify that we have not commented on merits of the issues. Thus, the appellate order passed by ld. CIT(A) is set aside and matter is restored back to the file of ld. CIT(A) for fresh adjudication. The appeal of the assessee is allowed for statistical purposes. We order accordingly.

In the result, the appeal filed by the assessee is allowed for statistical purposes.