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Judgment
The captioned appeals are filed by the assessee challenging the ex parte orders of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act', for short), relevant to assessment years 2010-11, 2013-14, 2015-16, 2016-17, 2019-20 & 2020-21 (in the case of Rishi Sehdev) and 2010-11 to 2012-13, 2012-13, 2013-14 & 2015-16 (in the case of M/s Dewsoft Overseas Pvt. Ltd.).
As the facts are identical, we hereby pass a consolidated order by taking ITA No.3010/Del/2026 relevant to AY 2010-11 as a lead case.
It is observed that the present appeal has been belatedly filed with a delay of 174 days beyond the period of limitation for which the assessee has filed application for condoning the said delay along with an affidavit. Upon considering the same and hearing the rival contentions, we deem it fit to hold that the assessee had ‘sufficient cause’ for filing the appeal belatedly. Hence, the delay is hereby condoned.
The assessee has raised the following grounds of appeal:-
“1.That the Ld. CIT(A) has erred on facts and in law in disposing the appeal ex-parte without affording proper lawful opportunity and without complying with the principles of equity, natural justice and fair-play. The order of the Ld. CIT(A) is liable to be quashed or set-aside.
1.1That otherwise too, the order of the Ld. CIT(A) is a non-speaking order which does not properly consider the specific grounds of appeal, statement of facts and records. He has not properly discussed the appellant's contentions and submissions. A non-speaking order has been passed rejecting the appeal summarily simply following the views of the Ld. AO in the assessment order.
2.That the Ld. AO has erred on facts and in law in assessing the appellant at an income of Rs.6,55,22,300/- as against returned income of Rs.1,55,33,761/-. The Ld. CIT(A) has erred in sustaining the same.
3.That the Ld. AO has erred on facts and in law in treating an amount of Rs.4,99,88,535/- (being turnover from software exports) as alleged unexplained income u/s 68 of the Act and in not allowing deduction u/s 10A out of the same. Ld. CIT(A) erred in sustaining the same.
4.That the Ld. CIT(A) has erred on facts and in law in not admitting the additional evidences filed by the assessee under rule 46A which are crucial for disposal of the issues involved.
5.That the additions/ disallowances as made are based on suspicion, conjectures, assumptions and presumptions without any substantive basis or cogent material and without due opportunity to the assessee. As such the addition as made deserved to be deleted. Moreover, the addition as made by the Ld. A.O. and sustained by the Ld. CIT(A) are based on erroneous views and / or non-appreciation of the facts and law involved which is highly arbitrary, unjustified, uncalled for and bad in law.
6.That the total income, tax and interest as assessed and computed are erroneous.
7.That the assessment, as made and the order of the Ld. CIT(A) are against law and facts of the case involved.
8.That the grounds of Appeal as herein are without prejudice to each other.
9.That the appellant respectfully craves leave to add, amend, alter and/or forego any ground(s) at or before the time of hearing.”
Brief facts are that the assessee is an individual engaged in the business of software manufacturing and export under the proprietorship concern M/s Dewsoft Overseas Pvt. Ltd.. The assessee filed his return of income dated 15.10.2010 declaring total income at Rs.1,55,33,761/- after claiming a deduction of Rs.4,76,92,039/- under Section 10A of the Act on profits earned on software export. The assessee’s case was selected for scrutiny and the Ld. AO issued notices under Section 143(2) and 142(1) of the Act which were duly served upon the assessee. After considering the assessee’s submission, the Ld. AO passed the assessment order dated 20.03.2013 under Section 143(3) of the Act determining the total income at Rs.6,55,22,292/- after making an addition of Rs.4,99,88,535/-under Section 68 of the Act as unexplained credit.
Aggrieved, the assessee was in appeal before the First Appellate Authority, who, vide order dated 31.07.2025, dismissed the appeal filed by the assessee on the ground that the assessee has failed to substantiate his claim with cogent documentary evidences. Aggrieved by the said order, the assessee is in appeal before us.
We have heard the rival submissions and perused the material available on record. It is observed that the assessee has declared income of Rs.4,76,92,039/- as income from business and profession of software manufacturing and had claimed the same as deduction under Section 10A of the Act. The Ld. AO observed that the assessee had only incurred expenditure of Rs.22,96,495 for manufacturing and export of software amounting to Rs.4,99,88,535/- which expenditure also includes exchange loss of Rs.11,05,669, audit fees of Rs.7,500/-, bank charges of Rs.655/-and depreciation of Rs.1,290/-. The ld. AO further observed that in the balance sheet filed by the assessee, there was no machinery, computer or even the basic amenities for the purpose of running its business. The assessee’s contention that it was granted deductions/exemption under Section 10A of the Act for the earlier year was rejected by the lower authorities. The Ld. AO proceeded to disallow the deductions claimed under Section 10A and made an addition of the said amount under Section 68 of the Act stating that the source of the deposit in assessee’s bank account was not established by the assessee with supporting documentary evidences.
Before the First Appellate Authority, the assessee is said to have filed additional evidences under Rule 46A of the Act for which the Ld.CIT(A) has sought for the remand report from the Ld. AO. The Ld. AO in the remand report had made a recommendation to reject the additional evidences filed by the assessee stating that the assessee has failed to comply with the remand proceedings and that since the assessee has failed to establish that there was sufficient cause for the assessee to have not produced the evidences before the Ld. AO, the additional evidences filed by the assessee was rejected by the Ld. CIT(A).
Before us, the Ld. AR for the assessee contended that the assessee be given one more opportunity to present its case before the First Appellate Authority for the reason that the assessee has filed all documentary evidences to substantiate its claim which were arbitrarily rejected by the lower authorities.
The ld. DR vehemently opposed to remanding the issue to the file of the Ld. CIT(A) for the reason that the assessee has not filed all the evidences before the Ld. AO during the assessment proceedings and has not made compliance during the remand proceedings as well. The Ld. DR stated that the lower authorities have rightly rejected the admission of the additional evidences. The Ld. DR prayed that the order of the Ld. CIT(A) be upheld.
On the above facts of the case, it is noted that the assessee has failed to make proper compliance before the lower authorities for which the Ld. AR stated that he had sufficient cause for the same. In order to extend the assessee with one more opportunity to present his case before the First Appellate Authority by adhering to the principles of natural justice and in the interest of justice dispensation, we deem it fit to remand this issue back to the file of the Ld.CIT(A) with the direction to the assessee that the assessee shall strictly comply with the proceedings before the Ld.CIT(A) without any undue delay from his side. The Ld. CIT(A) is also directed to adjudicate this issue afresh by admitting the additional evidences proposed to be filed by the assessee and to decide the issues on the merits and in accordance with the law, after giving sufficient opportunity of hearing.. Hence, the grounds of appeal raised by the assessee are hereby allowed for statistical purpose.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.
The findings given in this appeal apply mutatis mutandis to other appeals of the assesses as well.
In the result, all the appeals of the assesses are allowed for statistical purpose.