DCIT, AGRA V. O.P. GUPTA CONTRACTORS P LTD, AGRA

MA 29/AGR/2020

AI Insights

The case involves the Deputy Commissioner of Income Tax, Circle-2(1)(1), Agra as the Revenue appellant and Sh. O.P. Gupta, Contractor Pvt. Ltd. as the respondent. The Revenue's M.A. was against the CIT(A)'s decision which had deleted an addition of Rs. 15,72,588 made by the Assessing Officer under section 154 of the Income Tax Act, 1961. The addition was initially made due to a discrepancy noticed during an audit, which was claimed to be a short computation of income. The CIT(A) reversed this addition, leading to the Revenue's appeal. The Tribunal dismissed the M.A. based on the applicability of the CBDT Circulars which did not support the Revenue's position that the case fell under an exception to the monetary threshold for appeals.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779302 (ITAT-AGRA)
• Duration Of Justice: 5 year(s) 3 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-10-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 24-06-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR
• Assessee Lawyers: RAJESH MALHOTRA
• Keywords: Opportunity of being heard; Tax effect; Audit objection
• Section: 143(3); 154

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, DB: AGRA (Through Physical / Virtual Hearing) BEFORE SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER M.A. No.- 29/Agr/2020 Arising Out of ITA No.- 252/Agr/2019 [Assessment Years: 2014-15] Dy. Commissioner of Income Tax, Circle-2(1)(1), Agra. VS Sh. O.P. Gupta, Contractor Pvt. Ltd., E-11, Nirbhay Nagar, Agra. PAN- AAACO7032P Revenue Assessee Assessee by Shri Rajesh Malhotra, CA Revenue by Shri Anil Kumar, Sr. DR Date of Hearing 18.07.2025 Date of Pronouncement 13.10.2025 ORDER PER BRAJESH KUMAR SINGH, AM, This Miscellaneous Application (hereinafter referred to as the ‘MA’) has been filed by the Revenue against the order dated 20.11.2019 in ITA No. 252/Agr/2019.This appeal of the assessee was dismissed by the Tribunal on the ground that the tax effect was Printed from counselvise.com MA No.- 29/Agr/2020 O.P. Gupta 2 less than Rs. 50 lakhs. In this case, the AO has made an addition of Rs.2 lakhs, and the assessment was completed at Rs. 2,24,54,140/. Thereafter, an order u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’)dated 14.08.2018 was passed wherein it was noticed that in P&L a/c net profit was shown Rs 2,41,82,947/-but in computation of income it was taken Rs 2,26,10,357/- and theomission resulted into short computation of income Rs 15,72,590/- involving tax effect of Rs.6,78,602/-.The AO further noted that to rectify the same, notice u/s 154 of I.T Act, 1961 dated 10.07.2018 was issued to the assessee for giving him an opportunity of being heard on or before 20.07.2018, wherein,the assessee did not furnish any reply in compliance to the notice. The AO noted thatas the mistake pointed out by RAP was apparent from record, hence the assessment was revised u/s 154 of I.T. Act, 1961 at a total income Rs. 2,40,26,728/- by making an addition of Rs.15,72,588/-. 2. Aggrieved with said order, the assessee filed an appeal before the Ld. CIT(A), who deleted the said addition by observing in para 6 of this order, as under: Printed from counselvise.com MA No.- 29/Agr/2020 O.P. Gupta 3 “ 6. I have carefully considered the appellant's submissions and facts of the case. I have called for, and gone through the copies of the Balance Sheet of the appellant company and the return of the AOP in which it is a member. I notice that during the impugned year, the appellant company was a member of an A.O.P. by the name of \"SMS OPG JV\". The said AOP has filed its return of income for A.Y. 2014-15 оп 10.11.2014 and its PAN is AAJAS6487P. Total income of Rs. 32,05,080/- has been disclosed by it. The appellant's consolidated Balance Sheet as on 31.03.2014 confirms that the accounts of the said AOP are consolidated and presented as such in that Balance Sheet. Hence, in light of these facts, I am convinced that the A.O. had correctly adopted the figure of net profit of the appellant company while assessing its income in the assessment order passed under section 143(3) and no mistake has crept in it in respect of that figure. The enhancement of income by way of the impugned order passed under section 154 is accordingly not sustainable and reversed. Accordingly ground no. 1.1 is allowed. Grounds no. 1.2, 1.3 and 1.4 become infructuous as a result, while ground no. 1.5 is consequential in nature. Hence, none of these grounds are adjudicated.” 3. In the Miscellaneous application (hereinafter referred to as the ‘M.A’) it has been submitted that even though the tax effect which is less than Rs. 50 lakhs, but the case was covered by an exception,as the order u/s 154 of the Act was passed as a consequence of audit observation. It is, therefore, requested that the Tribunal may kindly recall its earlier order dismissing the appeal and restore the appeal for a fresh hearing on merits Printed from counselvise.com MA No.- 29/Agr/2020 O.P. Gupta 4 4. We have heard both the parties and perused the material available on record. We have considered the facts of the case. The para 3(c) of the amended para 10 of CBDT Circular No. 03/2018, dated 20.08.2018 relied upon by the department is reproduced as under: “(c) Where Revenue Audit objection in the case has been accepted by the Department, or” 4.1 However, the CBDT has issued two recent Circulars u/s 268A of the Act, - Circular no. 5/2024 dated 15.03.2024 and Circular no. 9/2024 dated 17.09.2024. The Circular no. 5/2024 dated 15.03.2024, has been issued in supersession of Circular no. 3/2018 dated 11.07.2018 which has been relied upon by the department in its present M.A. We further note that in these two circulars, the exception clause relating to issues arising out of audit objections does not find place. Further, para 5 of the Circular no. 9/2024, dated 17.09.2024 states that the circular no. 5/2024, dated15.03.2024 shall apply to the SLPs/ appeals pending before the Supreme Court / High Court/ Tribunal, which may accordingly be withdrawn. Printed from counselvise.com MA No.- 29/Agr/2020 O.P. Gupta 5 4.2 In view of the above Circulars dated 15.03.2024 and 17.09.2024, issued by the CBDT, this M.A. of the Revenue is not maintainable and the same is dismissed. 5. In the result, M.A. of the Revenue is dismissed. Order pronounced in the open court on 13th October, 2025. Sd/- Sd/- [SUNIL KUMAR SINGH] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 13.10.2025. Pooja Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra, Printed from counselvise.com "