DEPUTY COMMISIONER OF INCOME TAX CIRCLE 3(1)(1) AHMEDABAD, AHMEDABAD V. AADINATH DEVELOPERS, AHMEDABAD

ITA 689/AHD/2025

AI Insights

The case involves the Deputy Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad as the appellant and Aadinath Developers as the respondent. The Department appealed against the order of the CIT(A), which set aside the assessment order and referred the case back to the Assessing Officer for a fresh assessment. The original assessment included disallowances and additions to the income of Aadinath Developers, which were contested. The CIT(A) found that the assessee was not given sufficient opportunity to present their case, leading to the decision to remand the case for a de-novo assessment. The Tribunal agreed with the CIT(A)'s decision, emphasizing the need for a fair hearing and proper examination of the assessee's submissions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771863 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Unexplained expenditure; Principle of natural justice
• Section: 144; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.689/Ahd/2025 (Assessment Year: 2022-23) Deputy Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad Vs. Aadinath Developers, Plot No. 30/3, Sub Plot No. 1, B/h. Patel Rice Mill, Deriyapara Road, New Vatva, Ahmedabad-382440 [PAN No.ABPFA9033R] (Appellant) .. (Respondent) Appellant by : Shri Abhijit, Sr. DR Respondent by: None Date of Hearing 12.08.2025 Date of Pronouncement 25.08.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Department against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 10.01.2025 passed for A.Y. 2022-23. 2. The Department has raised the following grounds of appeal: “(a) The Ld. CIT(A) has erred in law and on facts in setting aside the order to the file of AO for fresh assessment u/s. 251(1)(a) of the IT Act holding that the assessment order was passed ex parte u/s 144 of the Act by ignoring the fact that during the assessment proceedings, the assessee has responded on 15.02.2024 in response to show cause notice issued on 07.02.2024 which is clearly mentioned in Para 2 of the assessment order. This indicate that this order was not ex-parte and case does not fall under Section 251(1)(a) of IT Act. (b) The Ld. CIT(A) has erred in law and on facts in not deciding the appeal on merits of the case. Printed from counselvise.com ITA No. 689/Ahd/2025 DCIT vs. Aadinath Developers Asst.Year –2022-23 - 2– (c) The appellant craves leave to add, alter and / or to amend all or any the ground before the final hearing of the appeal.” 3. The brief facts of the case are that assessee filed it’s return of income for A.Y. 2022-23 on 04.10.2022, declaring “NIL” income. During the course of assessment proceedings, the Assessment Officer observed that the assessee had claimed deduction under Section 80-IBA of the Act amounting to Rs. 28,20,121/-, however, the assessee had not filed Form 10CCB alongwith return of income. Hence, the Assessing Officer disallowed the deduction claimed under Section 80-IBA of the Act. Further, the Assessing Officer noticed that the assesee had taken unsecured loan of Rs. 1,43,82,420/-, however, out of the same, unsecured loans amounting to Rs. 1,37,90,033/- remained unexplained. Accordingly, the same were added as income of the assessee under Section 68 of the Act. Further, the Assessing Officer also added a sum of Rs. 8,24,023/- as unexplained expenditure in the hands of the assessee. The Assessing Officer completed assessment proceeding on ex-parte basis under Section 144 of the Act and against “NIL” income declared by the assessee, the Assessing Officer determined the total income of the assessee at Rs. 2,53,34,177/-. 4. In appeal, CIT(A) observed that the assessment order was passed by the Assessing Officer under Section 144 r.w.s. 144B of the Act and the order was passed on ex-parte basis due to non-compliance on the part of the assessee in response to various notices issued by the Assessing Officer. During the appellate proceedings, the assesee submitted before CIT(A) that sufficient opportunity was not provided by the Assessing Officer to the assessee to produce their submissions. Further, the assessee requested for admission of additional evidences under Rule 46A of the Income Tax Rules, 1961. In light of these facts and in view of amendment to Section 251 vide Finance Act, 2024, the CIT(A) set-aside the assessment order and referred the case back to the file of Assessing Printed from counselvise.com ITA No. 689/Ahd/2025 DCIT vs. Aadinath Developers Asst.Year –2022-23 - 3– Officer for making fresh assessment. While passing the order the Ld. CIT(A) made the following observations: “5.2 As per Amendment to Section 251 vide Finance Act, 2024, with effect from 1st day of October, 2024, the CIT (A) may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment, where such appeal is against an order of assessment made under section 144. 5.3 Considering the facts and circumstances of the case and the submissions of the assessee, the assessment order passed by the AO u/s. 144 r.w.s. 144B of the Income tax Act, 1961 is set aside and is referred back to the AO for making a fresh assessment. Needless to add, the AO shall afford adequate opportunity of being heard to the assessee before passing the assessment order de novo. In view of this, grounds no. 1, 5 & 6 are ALLOWED FOR STATISTICAL PURPSOE.” 5. The only grievance of the Department before us is that in the order passed by the Assessing Officer, though he had mentioned that such order was passed under Section 144 r.w.s. 144B of the Act, however, on perusal of the assessment order, it is seen that the assessee had in fact filed response dated 14.02.2024 before the Assessing Officer for his consideration. The Assessing Officer had passed the assessment order after considering the reply of the assessee, as discussed at Paragraph 4 of the assessment order. Therefore, this indicates that the assessment in case was not passed on ex-parte basis and the case of the assessee does not fall under Section 251(1)(a) of the Act. Therefore, it was submitted that Ld. CIT(A) erred in relying on the new amendment to Section 251(1)(a) of the Act and had incorrectly set-aside the case of the assessee to the file of Assessing Officer for de-novo consideration. 6. On going through the case records, we find that grievance raised by the Department is purely academic in nature. In the present case, substantial additions have been made by the Assessing Officer and the income of the assessee has been determined at Rs. 2,53,34,177/- and consequently, a tax demand of Rs. 1,77,65,600/- has been raised upon the assessee. The CIT(A)’s Printed from counselvise.com ITA No. 689/Ahd/2025 DCIT vs. Aadinath Developers Asst.Year –2022-23 - 4– order does not cause any prejudice to the interest of the Revenue, as the assessment has only been set aside for fresh consideration. It is also evident from the order that the CIT(A) has restored the matter back to the AO on the basis that the documentary evidence and submissions furnished by the assessee were not properly examined or appreciated by the AO at the assessment stage. Therefore, the intent and effect of the CIT(A)’s direction is to ensure proper adjudication after affording due opportunity, which is in line with the principles of natural justice. The appeal filed by the Department, in substance, does not challenge the merit or rationale of the CIT(A)'s decision to remand the matter for de-novo assessment. In view of the above discussion, and considering that no prejudice is caused to the Revenue due to the remand of the case to the file of AO, we hold that the appeal filed by the Department is infructuous and order of CIT(A) does not require any interference. 7. In the result, the appeal filed by the Department is dismissed. This Order pronounced in Open Court on 25/08/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 25/08/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "