Case Law Details
Sanjay Kejriwal Vs DCIT/ACIT (ITAT Ranchi)
The Income Tax Appellate Tribunal (ITAT), Ranchi, allowed the assessee’s appeal for statistical purposes by restoring the matter to the Assessing Officer (AO) for fresh adjudication after holding that the addition had been made without proper verification and without giving the assessee an opportunity of being heard. The Tribunal also condoned a delay of 106 days in filing the appeal after accepting the assessee’s explanation that he was unaware of the appellate proceedings before the National Faceless Appeal Centre (NFAC) and became aware of the order only upon receipt of a penalty show cause notice.
The assessment for Assessment Year 2016-17 was completed under Section 143(3), determining total income at ₹57,00,866 as against the returned income of ₹27,91,480. The AO disallowed ₹29,09,386 claimed as bank charges and interest against income from other sources, holding that the same expenditure had already been claimed in the Profit and Loss Account and therefore amounted to a double deduction.
The assessee challenged the disallowance, contending that no double deduction had been claimed and that the AO had made the addition without verifying the records, including the Profit and Loss Accounts of the assessee in his individual capacity and proprietary concern. The appeal before the Commissioner of Income Tax (Appeals) was dismissed ex parte due to the assessee’s non-appearance despite several opportunities.
Before the Tribunal, the assessee submitted that he had not appeared before the CIT(A) because he was unaware of the proceedings. The Tribunal observed that the assessment order indicated that the AO had made the addition without confronting the assessee, which was contrary to the principles of natural justice. It therefore restored the matter to the AO for fresh consideration after providing the assessee with a reasonable opportunity of being heard. The Tribunal also directed the assessee to appear before the AO and furnish all relevant details required for completing the assessment. Accordingly, the appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT RANCHI
This appeal by the assessee is directed against the order of the learned Addl./JCIT(A), NFAC, [in short, the ld. CIT(A)] dated 09/01/2025 for the Assessment Year (AY) 2016-17. The assessee has raised following grounds of appeal:
“1 For that Learned. CIT(A) was not justified in dismissing the appeal of the assessee ex parte without appreciating the facts and grounds of appeal.
2. For that the AO was not justified in disallowing the deduction of Rs. 29,25,691/-which was claimed as interest expenses against the income from other sources. The allegation made that double deduction is being claimed in factually incorrect and vague. The Ld. AO made the addition without verifying the documents on record and as such, the addition made is fit to be deleted.
3. For that no double deduction has been claimed by the assessee. The Profit & Loss A/c of the assessee in his individual capacity as well as of his Proprietorship concern was on record. The AO has vaguely mentioned that this claim of assessee is a double deduction without actually verifying the records and specifying the allegation made. As such, the disallowance made is fit to be deleted.
4. For that any other grounds in detail shall be argued at the time of hearing.”
2. From perusal of record, we noticed that there is a delay of 106 days in filing this present appeal before this Tribunal, for which the assessee has filed an application for condonation of delay. The assessee in his condonation application has stated as under:
“We understand that there is a delay of about 4 months in filing of this impugned appeal. This delay was caused due to the fact that the assessee was unaware of any such appellate proceedings, noticves issued and order passed by CIT(A) National Faceless Appeal Centre, Delhi [the learned CIT (A)] It is only around 11th June, 2025 when a penalty show cause notice was issued to the assessee and the office of the JAO contacted the assessee, that we came to know about any such order passed and thereafter ensued to file the appeal as per the directions of the Authorised Representative.
The delay caused in unintentional and incidental, beyond the control of the assessee. As such, it is prayed that the delay may kindly be condoned and the appeal of the assessee be admitted for adjudication of legal issues.
We shall be obliged for your kind consideration on the above.”
3.On the other hand, the learned Sr. Departmental Representative has submitted that the Bench may take an appropriate view. Considering the submissions made by the assessee, we condone the delay of 106 days in filing appeal before this Tribunal and admit the same for hearing on merit.
4. The facts of the case, in brief, are that the assessment was completed under Section 143(3) of the Income Tax Act, 1961 (in short, the Act) on a total income of ₹57,00,866/- as against the returned income of ₹ 27,91,480/-. The Assessing Officer in the assessment order has made addition of ₹ 29,09,386/-on the ground that the assessee had shown its income out of income from other sources at ₹ 17,49,565/- after claiming deduction of ₹ 29,09,386/-being the bank charges and interest on loan. However, on verification of Profit & Loss Account of the assessee, it was observed that the assessee has already claimed the above expenditure and therefore, the interest expenditure claimed in the computation of total income against the other sources incomes is double claim of expenditure and therefore, not allowable.
5. Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. CIT(A), who vide the impugned order, dismissed the appeal of the assessee on the ground that despite given several opportunities of being heard to the appellant, no explanation was ever offered before him.
6. Aggrieved by the order of the ld. CIT(A), the assessee has filed present appeal before this Tribunal.
7. During the appellate proceedings before us, it was submitted that the appellant could not appear before the ld. CIT(A) as the assessee was not aware of any such proceedings going on before the ld. CIT(A), NFAC and that was the reason when the assessee did not appear before him. Further, it is found from the assessment order that the Assessing Officer without confronting the assessee, has made the addition, which is against the principles of natural justice, therefore, we think it proper to restore the matter back to the file of the Assessing Officer to decide the issue afresh after giving a reasonable opportunity of being heard to the assessee. The assessee is also directed to appear before the Assessing Officer and submit all the relevant details required for the purpose of making assessment.
8. In the result, this appeal of assessee is allowed for statistical purposes only.
Order announced in open court on 23/04/2026.
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