ACIT CENTRAL CIRCLE 1 RAIPUR, RAIPUR V. UBV INFRASTRUCTURES LIMITED, RAIPUR

ITSSA 18/RPR/2025

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The case involves an appeal by the Assistant Commissioner of Income Tax, Central Circle-1, Raipur against UBV Infrastructures Limited, concerning the assessment year 2018-19. The appeal challenges the order of the Commissioner of Income Tax (Appeals), Raipur-3, which had quashed the earlier assessment order under section 153A of the Income Tax Act, 1961. The tribunal noted that the issues in this appeal were similar to those in a related case (IT(SS)A No. 25/RPR/2025), where it was decided to restore the matter to the CIT(A) for re-examination. The tribunal found that the assessee was not given a proper opportunity of hearing before the assessment order was passed, which is a violation of the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705840 (ITAT-RAIPUR)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Maneka Gandhi Vs. Union of India (UOI) and Ors. AIR 1978 SC 597, State of Orissa Vs. Dr. (Miss) Binapani Dei, 1967 AIR 1269
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: B. SUBRAMANYAM
• Keywords: Opportunity of being heard; Question of law; Rejection of books of accounts; Principle of natural justice
• Section: 153A

Judgement Text

"आयकरअपीलीयअिधकरण, रायपुर Ɋायपीठ,रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR Įी पाथ[ सारथी चौधरȣ, Ɋाियक सद˟ एवं ŵीअŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / IT(SS)A No: 18/RPR/2025 (िनधाŊरण वषŊ Assessment Year: 2018-19) Assistant Commissioner of Income Tax, Central Circle-1, Raipur v s UBV Infrastructures Limited, Surya Complex, Civil Lines, Raipur PAN: AABCR0696P (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से / Assessee by : Shri B. Subramanyam, CA राजˢ की ओर से / Revenue by : Shri Ram Tiwari, Sr. DR सुनवाई की तारीख / Date of Hearing : 27.06.2025 घोषणा की तारीख / Date of Pronouncement : 30.06.2025 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal of the department is directed against the order of the Commissioner of Income Tax (Appeal), Raipur-3, [in short “Ld. CIT(A)”], passed on 31.01.2025, u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the Assessment Year 2018-19, which in turn arises from the order of Assistant Commissioner of Income Tax, Central Circle-1, Raipur (in short “Ld. AR”), u/s 153A of the Act, dated 28.09.2021. 2 IT(SS) No. 18/RPR/2025 ACIT, Central Circle-1, Raipur vs. UBV Infrastructures Limited 2. The grounds of appeal raised by the revenue are as under: 1. The order of Ld. CIT(A) -3, Raipur is not in accordance with the laws and facts of the case. 2. The Ld. CIT(A)-3, Raipur has erred in quashing the order passed u/s 153A of the Act dated 28.09.2021. 3. Any other ground that may be raised during the course of appellate proceeding. 3. In the aforesaid matter, the assessee had also filed an appeal vide IT(SS)A No. 25/RPR/2025 pertaining to AY 2018-19, for which an order is passed by this tribunal on 26.06.2025 and the matter is restored back to the file of Ld. CIT(A) with the following observations: 6. The parties herein conceded that the facts and circumstances in all these appeals and the issue involved are similar and identical. Having heard the parties, the matters are taken up together and disposed of vide this consolidated order. 7. That even without going into the merits of the matters, the Ld. Counsel for the assessee submitted that they had taken legal ground even before the Ld. CIT(Appeals)/NFAC through “Grounds of appeal No.1 & 2” as per Form 35 wherein it was contended that during the assessment proceedings, the A.O while making addition of 15% of the alleged discrepancies found during the such proceedings had not provided any show cause notice i.e. no opportunity of hearing was accorded to the assessee. In this regard, the Ld. CIT(Appeals)/NFAC has held and observed as follows: “During the course of appeal proceedings, I have carefully perused the assessment order and also perused the submission of the assessee and find that the assessee has challenged in ground no.1 & 2 that the assessee was not provided proper opportunity before passing assessment order and making an addition ©15%. The assessee vide its reply dated 31.12.2024 has also submitted that the Assessing Officer has rejected the books of accounts without giving a reasonable 3 IT(SS) No. 18/RPR/2025 ACIT, Central Circle-1, Raipur vs. UBV Infrastructures Limited opportunity of being heard and without any specific finding. Therefore, the Assessing Officer did not follow the procedure as per section 145(3) of the Act. I find in the assessment order that the assessee itself rejected its books of accounts after search & seizure operation. I find that when the assessee itself has not relied upon its books of accounts and has rejected them then certainly in any case the books of accounts of the assessee cannot be relied upon. In my view no specific finding is required to reject the books of accounts in the case of assessee, since the assessee itself has not relied on its own books of accounts. The question of law is how is it possible for the Assessing Officer to rely on the books of accounts of the assessee when the assessee itself does not rely on its books of accounts and their accuracy. This question is the answer of the assessee's claim. Thus, ground nos. 1 and 2 of appeal are dismissed as having no merit.” 8. That as evident from afore-stated, the “Grounds of appeal No.1 & 2” raised by the assessee stating that the A.O had not provided proper opportunity of hearing before passing assessment order and making addition of 15%, whereas, the Ld. CIT(Appeals)/NFAC in its entire findings on these grounds has only adjudicated and deliberated upon the rejection of books of account and applicability of Section 145(3) of the Act but is absolutely silent whether principles of natural justice were violated in respect of the case of the assessee or not for which essentially these grounds were assailed before the Ld. CIT(Appeals)/NFAC. In absence of any such findings, the adjudication on legal ground by the Ld. CIT(Appeals)/NFAC becomes perverse and is vitiated as grounds disposed off summarily. That, the principles of natural justice forms the foundation for dispensing justice and is mandatory for the quasi-judicial authorities to determine whether the same were followed or not. 9. The Hon’ble Supreme Court has consistently emphasized the importance of adequate natural justice in the judicial and quasi-judicial proceedings. This principle ensures fairness, reasonableness and due process preventing arbitrary action and upholding fundamentality of the legal process. In the case of Maneka Gandhi Vs. Union of India (UOI) and Ors. AIR 1978 SC 597, 4 IT(SS) No. 18/RPR/2025 ACIT, Central Circle-1, Raipur vs. UBV Infrastructures Limited the Hon’ble Apex Court expanded the scope of natural justice holding that any action violating fairness, reasonableness and due process is arbitrary and unconstitutional. In the case of State of Orissa Vs. Dr. (Miss) Binapani Dei, 1967 AIR 1269, the Hon’ble Apex Court has established that even administrative orders affecting a person’s rights must adhere to the principles of natural justice. There are certain principles ensuring within the parameters of natural justice, one of them is “audi alterm partem” which mandates that before taking any action against the party, they must be given an opportunity to be heard and present their case. 10. The right to be heard is the cornerstone of natural justice and in this regard in the case before the Hon’ble Uttarakhand High Court in 2022 regarding a practising advocate, Dushyant Mainali (CLR No.22/2022) wherein the Hon’ble High Court had observed that the said advocate Mainali was accused of professional misconduct for allegedly misleading the litigant and causing the delay in filing revisional petition. The Hon’ble High Court directed the Bar Counsel of Uttarakhand to initiate disciplinary proceedings against the lawyer. Mainali challenged these remarks before the Hon’ble Supreme Court, contending that he was neither a party to the case before the High Court nor was involved in any capacity. The remarks, therefore, not only tarnished his professional reputation but were also made in clear violation of the principles of natural justice. The Hon’ble Apex Court in Civil Appeal No.15191/2022, arising out of a Special Leave Petition filed by Dushyant Mainali examined the Hon’ble High Court’s order and found the approach to be legally untenable. Hon’ble Justice Gavai (as he was at that time) speaking for the bench, noted that “we are of the considered view that the approach of the High Court in making the observations against the appellant without giving him any opportunity of being heard is totally unsustainable in law.” The bench went on to delete the entire portion of the high court’s order that contained the contentious remarks and directives against Mainali, holding that such a move violates the fundamental principles of fairness and due process. 5 IT(SS) No. 18/RPR/2025 ACIT, Central Circle-1, Raipur vs. UBV Infrastructures Limited 11. Thus, as per the binding judgment afore-stated and applying it to the facts of the captioned appeals, we are of the considered view that the Ld. CIT(Appeals)/NFAC had not passed order in terms with Section 250(4) & (6) of the Act and has not spelled out any findings whether principles of natural justice were violated by the A.O while framing the assessment in the case of the assessee. That all throughout, it has been vehemently contended by the Ld. Counsel that such opportunity was not given to the assessee by the A.O. The Ld. Sr. DR also could not place on record any evidence to show that opportunity of hearing was provided by the A.O. In absence of any submission from Ld. Sr. DR the issue in effect remains unaltered as claimed by the assessee that the principles of natural justice were not followed at the assessment stage. Therefore, balancing scales of justice, these matters need to be adjudicated before the Ld. CIT(Appeals)/NFAC on the very premise of determining the validity of the claim raised in the legal ground that no show cause notice for hearing were issued by the A.O before completing the assessment in the case of the assessee. That after due enquiry, the Ld. CIT(Appeals)/NFAC shall pass a speaking order as per law while complying with the principles of natural justice. At the same time, it is also mandatory for the assessee to respond to the hearing notices from the office of the Ld. CIT(Appeals)/NFAC and represent on merits. 12. As per the above terms grounds of appeal raised by the assessee are allowed for statistical purposes. 4. Since the appeals of assessee in IT(SS)A No. 20-25 /RPR/2025 for the AY 2013-14 to 2018-19 are already disposed of by us with the directions to restore the same to the file of Ld. CIT(A) for revisit in terms of observations (extracted supra) vide order dated 26.06.2025, therefore, on the same parity, for the sake of completeness, the issues in the present appeal of the revenue pertaining to AY 6 IT(SS) No. 18/RPR/2025 ACIT, Central Circle-1, Raipur vs. UBV Infrastructures Limited 2018-19 for the same assessee emanating from the same impugned order of Ld. CIT(A) merits to be restored back to the file of the Ld. CIT(A) for fresh adjudication, accordingly, we direct to do so. 5. In result, IT(SS)A 18/RPR/2025 of the revenue has been rendered as allowed for statistical purposes, in terms of our aforesaid observations. Order pronounced in the open court on 30/06/2025. Sd/- (PARTHA SARATHI CHAUDHURY) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 30/06/2025 Vaibhav Shrivastav आदेशकी Ůितिलिप अŤेिषत / Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ/ The Appellant- ACIT, Central Circle-1, Raipur 2. ŮȑथŎ/ The Respondent- UBV Infrastructures Limited 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. // सȑािपत Ůित True copy // "