ACIT CIRCLE-7(1), DELHI V. EBRO INDIA PVT.LTD., DELHI

MA 86/DEL/2025

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The case involves a miscellaneous application by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT) which had decided in favor of the assessee, Ebro India Pvt. Ltd., without allowing the Revenue to argue on merits. The Revenue contended that the ITAT had only addressed jurisdictional and technical issues during the hearing and had not provided an opportunity to argue on the merits, leading to an unbalanced decision. The assessee opposed the recall, citing a Supreme Court decision that the ITAT cannot recall the entire order for fresh adjudication on merits. However, the Tribunal found that it had indeed adjudicated on merits without proper hearing for the Revenue, thus recalling the order for a limited purpose of re-evaluating the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707089 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-07-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2018-2019
• Appeal Filed On: 27-03-2025
• Other Referred Cases: CIT vs. Reliance Communications Ltd. (2022) 440 ITR 1 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: ROHIT JAIN
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER MA No.86/Del/2025 (in ITA No.1291/DEL/2022) (Assessment Year: 2018-19) ACIT, Circle 7 (1), vs. Ebro India Pvt. Ltd., Delhi. 807, New Delhi House, Barakhamba Road, Connaught Place, New Delhi – 110 001. (PAN : AAECT5502H) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Rohit Jain, Advocate Shri Deepesh Jain, Advocate Shri Abhishek Singh, Advocate APPLICANT/REVENUE BY : Shri Om Prakash, Sr. DR Date of Hearing : 04.07.2025 Date of Order : 09.07.2025 O R D E R PER S.RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. This misc. application is filed by the Applicant/Revenue against the order of the Tribunal in ITA No.1291/Del/2022 dated 09.09.2024 for AY 2018-19 for recalling of the said order and deciding the appeal on merits. 2. At the time of hearing, ld. DR of the Revenue submitted that the original appeal preferred by the assessee vide order dated 29.04.2022 was disposed off by the ITAT vide order dated 09.09.2024 wherein assessee has raised jurisdictional/technical issues along with the issue on merits. He submitted 2 MA No.86/DEL/2025 that in the abovesaid order, Hon’ble Tribunal has decided the jurisdictional/ technical issues in favour of the Department. However, Hon’ble Tribunal has decided the issue in para 19 wherein the Bench has observed that instead of remitting back the case, they are inclined to adjudicate the issues on merits. Eventually, they have decided the case on merits in favour of the assessee without giving Department an opportunity to argue the case on merits. He brought to our notice the relevant written submissions and also referring to the date of hearing, ld. DR of the Revenue has actually argued the case only on jurisdictional/technical issues and it was submitted that in case the issue of jurisdiction is decided against the assessee, proper opportunity of being heard be given to the Revenue and he prayed that the order under consideration may be recalled and proper opportunity of being heard be given to the Revenue. 3. On the other hand, ld. AR of the assessee objected to the submissions of the ld. DR and brought to our notice page 5 of the case law paper book submitted during the present hearing and brought to our notice the facts and findings of the Hon’ble Supreme Court in the case of CIT vs. Reliance Communications Ltd. (2022) 440 ITR 1 (SC). He submitted that on the similar facts available on record, it was held that the Tribunal has reheard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the ld. CIT (A). In exercise of powers u/s 254(2) of the Income-tax Act, 1961 3 MA No.86/DEL/2025 (for short ‘the Act’), the Appellate Tribunal may amend any order passed by it u/s 254(1) of the Act with a view to rectify any mistake apparent on record only. Therefore, while considering the applications u/s 254(2) of the Act the Appellate Tribunal is not required to revisit its earlier order and to go into the detail on merits, he submitted that even in this case, the whole case cannot be recalled on merits to adjudicate the issue under consideration and he prayed that the misc. application filed by the Revenue may be dismissed. 4. Considered the rival submissions and material placed on record. We observe that the hearing was held on 11.06.2024 as per the record brought to our notice that the jurisdictional issue was decided in favour of the Revenue and on merits, decided in favour of the assessee, and also we cross verified the Log Book for the date of hearing, we observe that the Bench has heard only the issue relating to jurisdictional/technical grounds only, there is no record to specify that we have heard anything on merits. It is normal practice in similar situation that the Bench will hear the issue exclusively on jurisdictional issue and if the decision is taken against the appellant then the matter will be reheard after giving proper opportunity of being heard to both the parties on the issue of merit. In the given case, we observe that the issue under consideration was to be adjudicated as per the reasons given at para 19 of the order wherein we have taken a call to adjudicate the issue under consideration for the reason that the issue under consideration is the share 4 MA No.86/DEL/2025 capital issued to its AE and disallowed the same by the AO u/s 68 of the Act. We observe that this relevant issue was already considered in the TP stage itself and TPO has not passed any adverse comments and accepted that there is no variation. Based on the above observation, we carried away to adjudicate the issue on merits. Considering the arguments of the ld. DR, there is merit in his argument. At the same time, ld. AR has objected to that effect. He brought to our notice decision of Hon’ble Supreme Court in the case of Reliance Communications Ltd. (supra) wherein the Hon’ble Supreme Court has held that ITAT cannot recall the entire order for fresh adjudication on merits. It is distinguishable to the facts of the present case wherein we are not recalling the entire order for fresh adjudication rather we have adjudicated the issue without giving proper opportunity of being heard to the respondent in this case. Therefore, there is mistake apparent on record, we are inclined to recall this order with limited purpose to adjudicate the issue on merits only. We direct the Registry to fix the case for hearing in due course. 5. In the result, the misc. application filed by the Revenue is allowed as indicated above. Order pronounced in the open court on this 9th day of July, 2025. Sd/- sd/- (YOGESH KUMAR U.S.) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 09.07.2025 TS 5 MA No.86/DEL/2025 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "