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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 03.11.2025 of ld. CIT(A)/NFAC passed u/s 250 of the Inco me T ax Act, 1961 (hereinafter referred to as “the Act”) wherein the addition made u/s 68 of the Act, vide assessment order dated 22.03.2024 were co nfirmed.
The facts of the case are that the assessee filed his return of income for A.Y. 2022-23 declaring total income of Rs.44,91,930/-. The case was selected for complete scr utiny under the CASS. Consequently , statutory not ice s under sections 143(2) and 142(1) of the Act along with var ious show cause notices, were issued by the Assessing Officer . As no response was filed by the appellant to the notices issued during the assessment proceedings, the Assessing Officer completed the assessment under section 143(3) read with section 144B of the Act vide order dated 22 .03.2024. W hile completing the assessment, the Assessing Officer determined the total income of the appellant after making, inter alia, the following additio ns:
Addition of Rs. 25,00,000/- under section 68 of the Act on account of alleged unexplained unsecured loan;
Addition o f Rs. 10,29,47,014/- under section 68 of the Act on acco unt o f alleged unexplained incre ase in sundry creditors; and
Addition of Rs. 2,32,213/- on account of alleged difference between tur nover reported in the GST returns and the Inco me Tax Return.
Aggrieved by the assessment order, assessee filed appeal before the ld. CIT(A) which was dismissed ex-pate on the ground that the appellant has failed to respond to the various notices sent as find mentioned in para 4 of the impugned order.
Aggrieved by the impugned appellate ex-parte order, the assesse is in ap peal before us and has raised the fo llowing grounds of appeal:
“1 . That the learned Commissioner of Income Tax (Appeals ) has er red both i n law and on facts, in upholdi ng the c ompleti on of asses sment under s ection 143(3) r.w.s 144B of t he Act, wit hout appr eciati ng that no sufficie nt opport uni ty was gr anted to the Appellant and the pri ncipl es of natural justic e w ere no t observed and henc e the same ought to be quashed as suc h.
2.1That the l ear ned Commissioner of Income Tax (Appeals ) er r ed i n confirming t he additi on of Rs. 25,00,000 on account of unsecur ed loans , by wrongfully invoki ng the provisi ons of S ecti on l 15BBE of the Inco me Tax Act and treati ng the same as unexplained cas h credits under Sect ion 68 of t he Income Tax Ac t.
2.2That the l ear ned Commissioner of Income Tax (Appeals ) er r ed i n confirming t he additi on of Rs. 10,29,47,014 on account of increase in Sundry cr edi tors, by wrongfully i nvo ki ng the provisio ns of Secti on 115BBE of the Income Ta x Act and treati ng the same as unex plained cas h credits under Sect ion 68 of the Inc ome Tax Act.
2.3That the l ear ned Commissioner of Income Tax (Appeals ) e1 Ted m confirmi ng the additi o n of Rs.2,32,213 by treati ng the s ame a escaped business income of the ass essee, bei ng the differ ence in turnov er reported i n the GS T retur n and the Inc ome Tax ret urn.
2.4That the entire additi ons are bas ed on s ur mises, conject ures and sus picion and ther efore illegal, invalid and unsust ai nable.”
We have heard the ld. AR and perused the material availab le on reco rd. The ld. AR would submit that the impugned order has resulted into miscarriage of justice as principle of natural justice has not been followed because no effective opportunity of hearing was given as the assessee had never received the notice after 04.09.2025 when ad journment was sought and there fore the matter may be restored to the file of the Ld. CIT( A) for deciding afresh.
We have co nsidered the rival submission and examined the record, Section 250(2)(a) lays down as under:
“250(2 ) The fol lo wing shall have the right to be heard at the heari ng o f the appeal-
(a)the appellant, either i n person or by an authori zed repres entative;”
Thus, the hear ing mandated by Section 250(2)(a) of the Act is no t a mere formality but a mandatory statutory requirement for following the principle of natur al justice by the quasi-judicial authority.
In view of the ab ove facts and circumstances, it is evident that the impugned order has been passed w ithout effective hearing and principle of natural justice has no t b een followed For these reaso ns, the impug ned order is not maintainable and according ly set aside. T he end of justice shall be met in case the matter is restored to the file of the Ld. CIT(A) for deciding the issue afresh by affording an effective o pportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Ld. CIT(A) w ithin the period of 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purposes.