AASHKA HOSPITALITY PVT. LTD.,GANDHINAGAR V. THE INCOME TAX OFFICER, WARD-1(1)(1), AHMEDABAD

ITA 715/AHD/2023

AI Insights

Aashka Hospitality Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals), which upheld the addition of Rs. 5,80,85,164 on account of Long Term Capital Gain (LTCG) for the Assessment Year 2014-15. The original assessment was exparte due to the assessee's failure to respond to multiple notices. The ITAT noted that the assessee was not provided an opportunity to rebut the Remand Report from the Assessing Officer, which led to the decision to set aside the matter for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790388 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 20-09-2023
• Other Referred Cases: Pankajbhai Jaysukhlal Shah vs. Assistant Commissioner of Income-tax Circle 2 & 1, Gk Business Centre (P) Ltd vs. ITO Ward -10(4), New Delhi, Manoj Kumar vs. ACIT, circle - 62(1), New Delhi
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Capital Gains
• Section: 148; 144; 143(3); 142(1); 132; 153A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member Aashka Hospitality Pvt. Ltd. Ground Floor Shreyashram, B/H, DA-IICT Sargasan Road, Sargasan, Gandhinagar Gujarat-382421 PAN: AADCA9008Q (Appellant) Vs Income Tax Officer Ward-1(1)(1), Ahmedabad (Respondent) Assessee Represented: Shri M S Chhajed, A.R. Revenue Represented: Shri Rameshwar P Meena, Sr. D.R. Date of hearing : 10-11-2025 Date of pronouncement : 25-11-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 21.08.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 144 r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2014-15. ITA No: 715/Ahd/2023 Assessment Year: 2014-15 Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 2 2. Brief facts of the case is that the assessee is a company engaged in the business of hospitality business and filed its Return of Income on 31-03-2016 declaring total income of Rs.1,71,78,580/- after setting off current year business loss of Rs.18,85,927/-. The assessee filed the above return before ITO Ward-1(1)(1), Ahmedabad. The return was taken for scrutiny assessment and notice u/s. 142(1) issued on 26-10-2016 along with the detailed questionnaire calling for certain details and documents through Speed Post. There was no response. Hence further notices were issued between 03-08-2016 to 19-12-2016, however the assessee failed to response to any of the notices which has resulted in passing exparte assessment order and making addition on account of Long Term Capital Gain of Rs.5,80,85,164/-. . 3. Aggrieved against the exparte assessment order, assessee filed an appeal before Ld. CIT(A) wherein he filed additional documents. The Ld. CIT(A) called for Remand Report from the Assessing Officer which was submitted by the A.O. vide its letter dated 22-01-2018. Considering the submissions of the A.O., Ld. CIT(A) upheld the addition of Rs. 5.8 crores by observing as follows: “6.2 I have considered the arguments of the appellant and perused the finding of the Ld AO both at the assessment stage and in remand report. The AO at the remand stage thoroughly examined the issue and given his finding point by point and demonstrated with detailed facts which the appellate failed to counter. The appellant on the other hand put forward some explanation which are on weak footing and without any cogent materials. The Appellant has produced different types of information before the AO which are not acceptable. No supporting evidence could be furnished for total additions in fixed assets during the previous year and year under consideration. Whatever documents it submitted devoid of any cogent explanation as to how these expenses/additions could be attributable to fixed asset addition/construction/improvement. The appellant has failed to demonstrate with cogent evidence of addition of Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 3 fixed assets and its payments for the same. No bank statement was also furnished leave apart proper bills and voucher for such addition. The dates and figures, as observed from the remand report are varying. Thus, looking at the detailed factual remand report submitted by the AO, copy of which the appellant is in its possession and no proper comment was offered for such discrepancies, I do not find and reason to differ with the recommendation made by the AO in his remand report which is reproduced here - Hence, it is requested that the deduction claimed for addition in a building may not be allowed as claimed by the assessee because the assessee has failed to furnish all the supporting documentary evidence for large addition made during the year.\" There was no effort to counter point by point rebuttal on the findings of the AO by the appellant. Thus, in my considerate view the addition of Rs.5,80,85,164/- is justified and accordingly confirm the same. In view of the above the grounds No. 1 and 2 of appeal are dismissed.” 4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal and Additional Grounds of Appeal: [1] The order passed by Ld. CIT(A) is against law, equity & justice. [2] The assessment order passed by the Ld. A.O. is without jurisdiction and hence assessment order is bad & illegal [3] The Ld. CIT(A) has erred in law and on facts in passing order without providing appellant opportunity to rebut remand report. [4] The Ld. CIT(A) has erred in law and facts in upholding the addition of Rs.5,80,85,164/- on account of Capital gain. [5] The appellant Craves liberty to add, amend alter or modify all or any grounds of appeal before final appeal. Additional Grounds: 1. The assessment order passed by the Ld. A.O. is bad, illegal, without jurisdiction and contrary to instruction No. 01/2011 of CBDT. 5. At the outset, ld. Counsel appearing for the assessee in support of the Additional Ground submitted that the assessment order passed by the A.O. is bad, illegal and without jurisdiction and contrary CBDT Instruction No. 1/2011. Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 4 6. We have considered the submissions of the Ld. Counsel for the assessee and also perused the materials available on record including the Return of Income filed by the assessee. It is seen that the assessee filed the original Return of income on 31-03-2016 with Acknowledgement number, Ward–1(1)(1), Gujarat. When the assessee was first issued with a notice u/s. 143(2) dated 03-08- 2016 duly served by Speed Post, the assessee failed to response to the notice. Further notices u/s. 142(1) dated 26-10-2016, 10-11- 2016 and 02-12-2016 which were sent by Speed Post not replied by the assessee. Therefore notice u/s. 274 r.w.s. 271 was served through Notice Server on 19-12-2016. However the assessee being a Company failed to response to any of the notices which has resulted in passing exparte assessment order. The assessee’s reliance on CBDT Circular No. 1/2011 in our considered opinion does not arise. Since the assessee itself filed the Return of Income before ITO Ward-1(1)(1). Further Section 124 of the Act deals with the jurisdiction of the assessing officer. Sub-section (3) clearly talks about jurisdiction of assessing officer when can be questioned and time limits prescribed in the provisions. For ready reference, Sub- section (3) and Sub-section (4) of Section 124 are reproduced as follows: 3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer— (a) where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section 143 or after the completion of the assessment, whichever is earlier; (b) where he has made no such return, after the expiry of the time allowed by the notice under sub-section (2) of section 115WD or sub-section (1) Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 5 of section 142 or under sub-section (1) of section 115WH or under section 148 for the making of the return or by the notice under the first proviso to section 115WF or under the first proviso to section 144 to show cause why the assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier; (c) where an action has been taken under section 132 or section 132A, after the expiry of one month from the date on which he was served with a notice under sub-section (1) of section 153A or sub-section (2) of section 153C or after the completion of the assessment, whichever is earlier. (4) Subject to the provisions of sub-section (3), where an assessee calls in question the jurisdiction of an Assessing Officer, then the Assessing Officer shall, if not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2) before the assessment is made. 6.1. The assessee filed the Return of Income therefore Clause (a) of Section 124(3) is applicable to the facts of the case. The assessee is not entitled to question the jurisdiction of the assessing officer after the expiry of one month from the date on which he was served with the notice under section 142(1) or Section 143(2) or after the completion of assessment, whichever is earlier. In this case, the first notice u/s. 143(2) was served on the assessee through Speed Post on 03-08-2016 which was not replied by the assessee company. Thereafter A.O. issued 142(1) notices on 26-10-2016, 10- 11-2016 and 02-12-2016 which were also not responded by the assessee and resulted in passing exparte assessment order. Thus the assessee has no locus stande to raise the jurisdiction of the assessing officer at this juncture. If at all, such objection ought to have been raised by the assessee before 03-09-2016 before the assessing officer himself. Admittedly the assessee has neither raised the jurisdiction issue neither before the assessing officer nor before the First Appellate Authority but for the first time before this Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 6 Tribunal by way of raising as additional grounds with the reliance of following case laws: 1. Hon'ble Gujarat High court in the case of Pankajbhai Jaysukhlal Shah vs. Assistant Commissioner of Income-tax Circle 2 & 1 [2019] 110 taxmann.com 51 (Gujarat) Hon'ble Supreme Court has dismissed the SLP filed by Assistant Commissioner of Income-tax Circle-2 v. Pankajbhai Jaysukhlal Shah [2020] 120 taxmann.com 318 (SC)[14-02-2020] 2. Hon'ble ITAT Delhi Bench 'C' in the case of Gk Business Centre (P) Ltd vs. ITO Ward -10(4), New Delhi I.T.A. No. 828/DEL/2020 on 2 February, 2021 3. Hon'ble ITAT Delhi 'C' in the case of Manoj Kumar vs. ACIT, circle - 62(1), New Delhi ITA No. 1627/Del./2016 6.2. We have carefully considered the submission of the assessee as well as case laws relied by the assessee. None of the case laws deals with the provisions of Section 124 more particularly Sub- section (3) of the Act. If the assessee have objected to the jurisdiction of the assessing officer as prescribed under Clause (a) of Sub-section (3), then the assessing officer is bound to refer the matter to the higher ups to determine the correct jurisdiction of the assessing officer as per Sub-section (2) of Section 124. Thus in our considered view, Section 124 is a self contained mechanism available under the Act. Therefore the case laws relied by the assessee, has not made any reference to the above provisions of Section 124 of the Act. There is no ambiguity in the provisions of law, therefore the Additional ground raised by the assessee does not merit consideration and the same is hereby dismissed. Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 7 7. Regarding Ground No. 3 & 4 raised by the assesse namely not providing the assessee opportunity to rebut the Remand Report and upholding the addition of Rs.5.8 crores on account of capital gains. There is considerable force in the submissions of the assessee. Perusal of Ld. CIT(A) makes it clear Remand Report is being sought from the assessing officer and Ld. CIT(A) satisfied with the remand report given by the A.O. and no opportunity for rebuttal given to the assessee. Therefore in the interest of justice, we deem it fit to set-aside the matter back to the file of Jurisdictional Assessing Officer to give one more opportunity of hearing to the assessee to substantiate his claim and LTCG. Needless to state that the assessee should make use of this final opportunity to pass order on merits of the case. 8. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 25 -11-2025 Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : Dated 25/11/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) Printed from counselvise.com I.T.A No. 715/Ahd/2023 A.Y. 2014-15 Page No Aashka Hospitality Pvt. Ltd. vs. ITO 8 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "