ITAT Sets Aside Ex-Parte Order for Lack of Reasoned Findings by CIT(A)

Veena Singh Vs ITO (ITAT Agra)

The Income Tax Appellate Tribunal (ITAT), Agra Bench, in the case of Veena Singh Vs ITO, allowed the assessee’s appeal for statistical purposes, setting aside an ex-parte order passed by the Commissioner of Income-tax (Appeals) [CIT(A)]. The Tribunal’s core holding was that even when an appellant repeatedly fails to appear, the first appellate authority is mandated under Section 250(6) of the Income-tax Act, 1961, to pass a reasoned order that addresses the points of determination and the merits of the case, rather than simply dismissing the appeal for non-prosecution.

Factual Background and Assessment

The case pertained to the assessment year 2015-16. The assessee filed a belated return of income, which was subsequently selected for scrutiny under the Computer Assisted Scrutiny Selection (CASS) system due to a mismatch in contract receipts and Tax Deducted at Source (TDS) credits.

During the assessment proceedings, the assessee filed a revised return, but the Assessing Officer (AO) rejected it because the original return was filed belatedly under Section 139(4) of the Act, rendering the subsequent revision invalid. Following the assessee’s failure to respond to a detailed questionnaire, the AO proceeded to make substantial additions to the income, including:

• ₹10,12,930/- for mismatch in gross receipts and net profit as per Form 26AS.
• ₹1,63,575/- as undisclosed income from other sources.
• ₹94,29,470/- as unexplained opening capital under Section 68.
• ₹1,13,000/- as unexplained unsecured loan under Section 68 read with Section 115BBE.

The total assessed income was ultimately determined at a significantly increased figure of ₹1,09,52,440/-.