ITAT Confirms ₹4.10 Cr Addition U/s 69, Upholds Courts’ Authority to Dismiss Defaulted Cases [Read Order]
The ITAT held that the court has the inherent power to dismiss a case in default when a party fails to appear, without being obligated to pursue the matter on their behalf
![ITAT Confirms ₹4.10 Cr Addition U/s 69, Upholds Courts’ Authority to Dismiss Defaulted Cases [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/04/ITAT-ITAT-Surat-Section-69-Income-tax-act-TAXSCAN.jpg "ITAT Confirms ₹4.10 Cr Addition U/s 69, Upholds Courts’ Authority to Dismiss Defaulted Cases [Read Order]")
In a recent judgment, the Income Tax Appellate Tribunal (ITAT) of Surat upheld the addition made by the Assessing Officer (AO) under section 69 of the Income Tax Act, 1961, as the assessee failed to appear and respond despite repeated notices being issued. Sureshbhai Raghubhai Thorat (assessee-appellant) failed to file the income tax return for the Financial Year (FY) 2017-18. Due to...
In a recent judgment, the Income Tax Appellate Tribunal (ITAT) of Surat upheld the addition made by the Assessing Officer (AO) under section 69 of the Income Tax Act, 1961, as the assessee failed to appear and respond despite repeated notices being issued.
Sureshbhai Raghubhai Thorat (assessee-appellant) failed to file the income tax return for the Financial Year (FY) 2017-18. Due to this non-compliance, a survey was conducted by the Income Tax Department. During the survey, the authorities discovered a notarized agreement indicating the assessee’s ₹4.10 crore investment in a project.
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Thus, the AO initiated reassessment proceedings under section 147 of the Income Tax Act, 1961, and issued repeated notices to the assessee. However, the assessee failed to respond to any of the notices. As a result, the AO passed an order classifying the amount as unexplained income u/s 69 of the Income Tax Act, 1961.
Aggrieved by the AO's order, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) upheld the AO’s decision on both procedural non-compliance (non-prosecution) and the merits of the case.
The matter was then brought before the ITAT. The counsel for the assessee, due to a lack of response and direction from the assessee, sought to withdraw from the case and did not make any arguments.
On the other hand, the counsel for the respondent, Ravi Kant Gupta, reiterated the order of the CIT(A). He pointed out that the assessee failed to respond at any stage of the case, even after sending notices repetitively under Sections 148 and 142(1) of the Income Tax Act, 1961.
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After hearing both sides, the bench comprising Pawan Singh (Judicial Member) and Bijayananda Pruseth (Accountant Member) upheld the CIT(A)'s decision.
The Tribunal observed that the assessee had failed to participate in the proceedings at any stage and did not provide any explanation for the ₹4.10 crore investment. In the absence of supporting material or submissions, the AO was justified in treating the amount as unexplained income under section 69 of the Income Tax Act, 1961.
The Tribunal referred to Chemipol v. UOI (2009) and CIT v. B.N. Bhattacharjee (1979), holding that no court or tribunal is required to continue proceedings on behalf of the party who initiated the proceedings when the party fails to appear or show interest. The appeal was thus dismissed by the tribunal.
To Read the full text of the Order CLICK HERE
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