BLUE BREEZE TRADING LLP ,DLEHI V. DCIT CENTRAL CIRCLE -27, DELHI

ITA 5056/DEL/2025

AI Insights

The case involves M/s. Blue Breeze Trading LLP, which appealed against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi. The appeal was initially dismissed ex parte due to the absence of the appellant's representation. The primary contention was the improper assessment under sections 153C and 144 of the Income Tax Act, 1961, following a search operation that linked the assessee to incriminating documents related to land transactions. The Tribunal found that the assessee was not given an effective opportunity of hearing, violating the principles of natural justice, and thus set aside the CIT(A)'s order and restored the matter to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792134 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 20-08-2025
• Other Referred Cases: PCIT vs. Ojjus Medicare (P) Ltd., CIT vs. Jasjit Singh, Shri B. N. Bhattacharjee and another, UOI v. M/s Ganpati Dealcom (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: LALIT MOHAN
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Unexplained investment; Principle of natural justice
• Section: 142(1); 132; 153A; 69; 234B

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER ITA No.5056/Del/2025, A.Y. 2013-14 M/s. Blue Breeze Trading LLP 268, Sukhdev Vihar, Delhi-110025 New Delhi PAN: AAPFB1574R Vs. Deputy Commissioner of Income Tax, Central Circle-27, Delhi (Appellant) (Respondent) Appellant by Sh. Lalit Mohan, CA Respondent by Ms. Ankush Kalra, Sr. DR Date of Hearing 08/12/2025 Date of Pronouncement 12/12/2025 O R D E R PER RAJ KUMAR CHAUHAN (J.M.): 1. This appeal is filed by the assessee /appellant against the order of Learned Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 2 referred to as “the Act”] dated 29.07.2025 for the A.Y. 2013-14, wherein the appeal was dismissed ex parte as the appellant/assessee has failed to respond to the notice issued on 5 dates and no one has attended the proceeding on behalf of the assessee but the ld. CIT(A) proceeded to decide the same on merit and the assessment order dated 30.03.2023 was upheld. 2. The facts in brief are that the assessee company was incorporated as a company but was converted into LLP on 24th April 2015 and is engaged in the business of providing helicopter and Aircraft services. The search action was conducted on a Rajasthan based land aggregator namely Shri Navin Mahipal on 16.10.2019. During the course of search action u/s 132 of the Act, various incriminating land deeds were seized which allegedly contained information related to Sh. Robert Vadra, Prop: M/s. Artex and various companies related to him including M/s. Blue Breeze Trading LLP (assessee). Hence, proceedings u/s 153C of the Act for A.Y. 2010-11 to 2019-20 were initiated in the case of assessee (LLP), accordingly, notice under section 153C of the Act was issued on 30.09.2021 asking the assessee to furnish return of income for the year under consideration. But the assessee has not filed return of income in compliance of notice under section 153C of the Act despite reminder Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 3 dated 04.11.2022. Subsequently, the statutory notice under section 142(1) of the Act along with questionnaire was issued to the assessee on 08.02.2023. The assessee has sought adjournment on various dates. On 04.03.2023, reply was filed by the assessee company to the notice dated 15.02.2023 raising objections to the proceedings initiated under section 153C of the Act. However, no specific details has been filed by the assessee. Again, notice under section 142(1) of the Act dated 06.03.2023 was issued to which part reply dated 13.03.2023 was filed. Further, show cause notice dated 16.03.2023 and 18.03.2023 were issued, to which reply were filed by the assessee. The Assessing Officer (‘AO’) concluded that the assessee company has sold the land purchased from the associates at high prices either to the 3rd parties or to associates and earned substantial profit. Therefore, added sum of Rs. 19,80,000/- under section 69 of the Act while passing the order under section 153C r.w.s 144 of the Act. 3. Aggrieved by the assessment order, assessee filed appeal before the Ld. CIT(A) who has dismissed the same ex parte but on merit observing that no one has attended proceedings on behalf of the assessee and appeal was therefore, liable to be dismissed. Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 4 4. Aggrieved by the impugned order, the assessee has filed appeal before the Tribunal raising following grounds: 1. “That the learned Commissioner of Income Tax (Appeals)-31, New Delhi bas grossly erred both in law and, on facts in upholding the determination of income made by the learned Deputy Commissioner of Income Tax, Central Circle-27, New Delhi at Rs. 5,01,02,130/- as against declared Income of Rs. 4,81,22,130 in an order of assessment dated 30.3.2023 u/s 153C/144 of the Act. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in disposing off the appeal ex-parte without granting any fair opportunity of being heard to the appellant. 2.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was reasonable cause for the appellant for not causing appearance on the dates fixed for hearing and as such disposal of the appeal without granting fair, meaningful and proper opportunity is untenable. 2.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that non-appearance of the appellant on the date of hearing was neither intentional nor deliberate and is not a case where appellant is not interested in prosecuting its appeal, particularly when appellant had appeared during the assessment proceedings. 2.3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that a notice u/s 250 of the Act was issued on 30.6.2025 for compliance on 4.7.2025; and appellant had filed an adjournment application on 4.7.2025 seeking time upto 7.7.2025. The aforesaid adjournment has neither been rejected nor there was Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 5 any communication to suggest any alternative date for compliance; and thus impugned order is a vitiated order. 3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that assessment framed u/s 153C/144 of the Act is barred by limitation and therefore, deserve to be quashed as such in view of the Judgments of Hon'ble Delhi High Court in the case of PCIT vs. Ojjus Medicare (P) Ltd. reported in 465 ITR 101 and, Hon'ble Apex Court in the case of CIT vs. Jasjit Singh reported in 458 ITR 437 the limitation for issuance of notice u/s 153C of the Act under the old regime would be as under: 28.9.2021 FY 2021-22 AY 2022-23 Assessment Year 2022-23(1) 2021-22(2) 2020-21(3) 2019-20(4) 2018-19(5) 2017-18(6) ……….. ……….. ……….. ……………. 4. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the assumption of jurisdiction u/s 153C of the Act and, framing of assessment u/s 153C/144 of the Act. 4.1 That both the notice issued u/s 153C of the Act and assessment framed u/s 153C of the Act were without satisfying the statutory preconditions contained in the Act and therefore without jurisdiction and therefore deserves to be quashed as such. Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 6 4.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that assumption of jurisdiction u/s 153C of the Act was bad in law since satisfaction note recorded by Assessing Officer of the searched person relies on copies of sale deed seized as a result of search which do not constitute incriminating material therefore assumption of jurisdiction is illegal, invalid and void-ab- initio. 4.3 That while upholding the assumption of jurisdiction the learned Commissioner of Income Tax (Appeals) has failed to appreciate that since neither money, bullion, jewellery or other valuable article or thing belonging to the appellant and nor any books of accounts or documents pertaining to the appellant or any information contained therein relating to the appellant were seized as a result of search the assumption of jurisdiction u/s 153C of the Act was illegal, invalid and unsustainable. 4.4 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that notices issued u/s 153C of the Act without terminating earlier proceedings u/s 153A of the Act were illegal, and void-ab-initio. 4.5 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in issuing notice u/s 153C of the Act after six years have elapsed from the end of the assessment year in which search is conducted u/s 132(1) of the Act in absence of possession of books of account or other documents or evidence which reveal that the income chargeable to tax represent in the form of 'asset', which has escaped assessment amounting to or is likely to amount to fifty lakh rupees or more in the aggregate in the relevant assessment years in view of the conditions provided in fourth proviso of section 153A of the Act. 4.6 That satisfaction notes recorded were null and void as the same woes in violation of CBDT Circular No. 19/2019 requiring mandatory DIN and consequently assessment framed w/s 153C of Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 7 the Act was without Jurisdiction and therefore deserves to be quashed as such 5. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that since Document Identification Number (\"DIN\") is absent is the order of assessment dated 30.3.2023 u/s 153C/144 of the Act, the same was invalid and deserves to be quashed as such. Further, the assessment framed is on the PAN of the company which ceased to exist hence also the assessment is void ab initio and deserves to be quashed. 6. That since no valid approval has been obtained u/s 153D of the Act, order of assessment made u/s 153C/144 of the Act is invalid and deserves to be quashed as such. 6.1 That approval u/s 153D of the Act was null and void as the same is in violation of CBDT Circular No. 19/2019 requiring mandatory DIN and consequently assessment framed u/s 153C of the Act was without jurisdiction and therefore deserves to be quashed as such. 7. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the recording of satisfaction note together with initiation of proceedings u/s 153C of the Act was highly belated in as much as search on searched person was conducted on 16.10.2019 and notice was issued u/s 153C of the Act on 30.9.2021 8. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding an addition of Rs. 19,80,000/-representing alleged unexplained investment u/s 69 of the Act. 8.1 That while upholding the above addition, the learned Commissioner of Income Tax (Appeals) Tax has failed to appreciate that the factual substratum of the case, statutory provisions of law Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 8 and as such, addition so made is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 8.2 That the learned Commissioner of Income Tax (Appeals) Tax has also failed to appreciate that various adverse findings and conclusions recorded by the learned Assessing Officer in the order of assessment without confronting the material and, without providing cross-examination are vitiated in law and, hence illegal, invalid and untenable. 8.3 That the learned Commissioner of Income Tax (Appeals) Tax has further failed to appreciate that statement recorded behind the back of the appellant and without providing cross examination could not be relied upon to draw adverse inference against the appellant. 8.4 That even otherwise the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the appellant has discharged its onus then the learned Assessing Officer could not have mechanically proceeded to make the addition based upon the material received from Investigation Wing and without conducting any valid independent enquiries on his own. 8.5 That the learned Commissioner of Income Tax (Appeals) Tax has further failed to appreciate that addition made and upheld is identical to factual matrix in benami proceedings, which proceedings are under stay in light of judgment of Hon'ble Supreme Court in the case of UOI v. M/s Ganpati Dealcom (P) Ltd. reported in 447 ITR 108 8.6 That the learned Commissioner of Income Tax (Appeals) Tax has further failed to appreciate that in absence of certificate u/s 65(B) of the Indian Evidence Act such 'electronic evidence' is not inadmissible in the eye of law and additions made on assumptions or presumptions u/s 69A of the Act are also illegal, invalid and untenable. Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 9 9. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs. 1,09,209/-u/s 234A of the Act and, interest of Rs. 7,70,893/- u/s 234B of the Act which are not leviable on the facts of the appellant. Prayer: It is therefore, prayed that, it be held that assessment made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) be quashed. It be further held that addition made and sustained by the learned Commissioner of Income Tax (Appeals) alongwith interest levied be deleted and appeal of the appellant firm be allowed.” 5. We have heard the Ld. AR and Ld. DR and examined the record. The Ld. AR submitted that the impugned order is ex parte, as no effective opportunity of hearing was given for filing the submissions and response by the assessee, and the Ld. CIT(A) has proceeded to dismiss the appeal on merit in the absence of any submission made by the assessee. It is further argued that even the assessment order is liable to be set aside which has been passed under section 144 of the Act because the submissions made and the material submitted has not been correctly considered by the assessing officer. Ld. AR further submitted that the assessment order is also not tenable on the ground that it had resulted into double addition i.e. individual Robert Vadra and assessee LLP, hence, it is submitted that the impugned order and the assessment order be set aside and the matter be restored to the file of the AO for Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 10 deciding afresh and after giving effective opportunity of hearing by the Ld. AO. 6. The Ld. DR on behalf of revenue while opposing the contentions of assessee has submitted that the assessee itself has failed to avail the opportunity given on various dates by the Ld. CIT(A) and the Ld. CIT(A) has rightly dismissed the appeal after considering the written submissions available on record. Hence, the Ld. DR submitted that the appeal is liable dismissed, however the Ld. AR could not dispute the fact that the impugned order was issued ex parte. 7. Section 250 sub section 2(a) of \"the Act\" provides as under: “Section 250 (2) The following shall have the right to be heard at the hearing of the appeal: - a. The appellant, either in person or by an authorized representative;” 8. It is evident from the provision that the hearing to be given is not a formality but an effective hearing is sine qua non for the purpose of upholding the principal of natural justice. 9. We have considered the rival submissions. We have noticed that the impugned order has been passed without offering the opportunity of Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 11 hearing which is evident from para 6 of the impugned order extracted below as under: “6. During the course of appellate proceedings, several notices were issued as under: - Sr. No. Date of issue of notice Date of compliance Remarks 01 23.04.2024 30.04.2024 Adjournment Sought No submission filed 02. 29.10.2024 05.11.2024 Adjournment Sought No submission filed None attended 03 29.11.2024 05.12.2024 Adjournment Sought No submission filed None attended 04. 23.04.2025 30.04.2025 Adjournment Sought No submission filed None attended 05. 30.06.2025 04.07.2025 Adjournment Sought No submission filed As may be seen that during the appellate proceedings, the appellant was provided numerous opportunities as tabulated above. However, the appellant did not comply with the notices issued. The appellant has not come forward to effectively controvert the findings of the AO. It Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 12 may be worth noting that Hon'ble Supreme Court in the case of Shri B. N. Bhattacharjee and another (118 ITR 461) has held that the appeal does not mean only filing of memo of appeal but also pursuing it effectively. In view of persistent non-compliance to the notices issued to the appellant, I am constrained to presume that the appellant is not interested in pursuing this appeal, although a submission mentioned above has been filed on the ITBA Portal. These are not faceless appellate proceedings, yet no one has attended these proceedings. Therefore, in view of the foregoing, the appeal is liable to be dismissed. However, since the appellant has filed written submissions they are being dealt with on merit in subsequent paragraphs.” 9. The contents of assessment order contained in para 6.4 to 6.7 shows that the Ld. AO does not seems to be clear and convinced in returning the finding while making the addition of Rs. 19,80,000/-. 10. It is evident from the contents of the impugned order as well as the assessment order that no effective opportunity of hearing has been given to the assessee which violates the principle of natural justice has thus resulted into miscarriage of justice. We have noticed that the impugned order is ex parte and the assessment order has been passed under section 153C r.w.s 144 of the Act. It is thus clear that the Ld. Lower Authorities has passed the order without effective representation of the assessee and has thus failed in giving effective opportunity of hearing at the time of passing of the respective orders. For these reasons the impugned order is not sustainable and is accordingly set aside. The matter is accordingly restored to the file of Printed from counselvise.com ITA No. 5056/Del/2025 Blue Breeze Trading LLP, Delhi 13 the Ld. AO for deciding the matter de novo after giving an effective opportunity of hearing. 11. In the result, the appeal of the assessee is accordingly allowed in above terms for statistical purposes. Order pronounced in open Court on 12th December, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 12/12/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "