ITAT Remands Rs 2.20 Crore Addition Under Section 69C for Fresh Examination:

The assessee challenged the order dated 16 March 2026 passed by the CIT(A) under Section 250 of the Income Tax Act, 1961, for Assessment Year 2017–18. The AO had made an addition of Rs 2,20,50,000 under Section 69C of the Act by treating the amount as unexplained expenditure, allegedly relating to management fees, professional fees, and transactions described in the assessee’s submissions as unsecured loans. An additional amount of Rs 44,000 was also added as undisclosed interest income on an income tax refund.

The CIT(A) sustained the additions and dismissed the assessee’s appeal. Before the Tribunal, the assessee sought admission of additional evidence under Rule 18(4) read with Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. It was submitted that the earlier authorised representative had not adequately represented the case and that the assessee became aware of the adverse outcome upon receiving the appellate order.

The assessee contended that the relevant supporting documents could not be procured and produced before the lower authorities owing to the circumstances and the inadequate time available to gather the necessary evidence. The assessee argued that it should not suffer prejudice because of the earlier representative’s failure. Accordingly, the assessee requested that the matter be remanded to the Assessing Officer for examination of the additional evidence and fresh adjudication. The Department defended the orders of the AO and the CIT(A), contending that the addition had been made and sustained because of the assessee’s non-compliance and failure to furnish supporting evidence.

After considering the submissions, the Tribunal held that, in the interest of justice and proper assessment, the CIT(A)’s order deserved to be set aside and the matter restored to the AO. The AO was directed to fix a date of hearing and obtain all relevant details and supporting documents from the assessee to examine the claim that adequate own funds or borrowed funds were available for the payments treated as unexplained expenditure or unsecured loans.