DHARAM NATH,YAMUNA NAGAR V. INCOME TAX OFFICER WARD-1, YAMUNA NAGAR

ITA 1164/CHANDI/2025

AI Insights

The case involves Shri Dharam Nath, a small labor contractor, who appealed against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.7.88 Lacs to his income for the Assessment Year 2010-11. The addition was initially made by the Assessing Officer on the basis of best judgment assessment under sections 144 and 147 of the Income Tax Act, due to non-filing of income tax return by the assessee and the receipt of contract receipts amounting to Rs.79.40 Lacs from Haryana Distillery, Yamuna Nagar. The Tribunal admitted the appeal despite a delay of 143 days, acknowledging the assessee's lack of awareness of the order due to miscommunication with his counsel. The Tribunal, considering the nature of the business and the principles of natural justice, decided to reduce the profit rate applied to the assessee's receipts from 12.375% to 3%.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788668 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 11-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN LD.
• Assessee Lawyers: VIRENDRA BHATIA LD
• Keywords: Principle of natural justice
• Section: 144

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH HYBRID HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.1164/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2010-11) Shri Dharam Nath House No. 179 Ward No 15 Near Ram Janki Mandir Vijay Colony, Yamuna Nagar, Haryana - 135001 बनाम/ Vs. ITO Ward-1 Yamuna Nagar, Haryana 135001 ˕ायीलेखासं./जीआइआरसं./PAN/GIR No. AEMPN-9817-Q (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. Virendra Bhatia (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 26-11-2025 घोषणाकीतारीख /Date of Pronouncement : 26-11-2025 आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2010- 11 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 19-02-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 144 r.w.s. 147of the Act on 28-11-2017. The registry has noted delay of 143 days in the appeal, the condonation of which has been sought by Ld. AR on the strength of condonation petition which is accompanied by an affidavit of the assessee. It has been submitted that delay has occurred due to the fact that communications were sent Printed from counselvise.com 2 on the e-mail address of assessee’s counsel and the assessee was not aware of impugned order. 2. From case records, it emerges that the assessee is a small labor contractor. The assessee did not file return of income. The case was reopened on the ground that the assessee received contract receipts of Rs.79.40 Lacs from Haryana Distillery, Yamuna Nagar. During reopening proceedings, the assessee declared profit rate of 12.375% on receipts of Rs.16 Lacs. The Ld. AO applied same rate of profit on balance receipts of Rs.63.74 Lacs and made addition of Rs.7.88 Lacs. The Ld. CIT(A) confirmed the same for want of any representation from the assessee. Aggrieved, the assessee is in further appeal before Tribunal. 3. Keeping in mind the principles of natural justice and considering the background of the assessee, I admit the appeal of the assessee. On merits, the only prayer of Ld. AR is fair estimation of profit element. Considering the fact that the assessee is a small labor contractor, I direct Ld. AO to apply profit rate of 3% on balance receipts of Rs.63.74 Lacs and re-compute the income of the assessee. 4. The appeal stands allowed for statistical purposes. Order pronounced on 26th November, 2025. Sd/- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER Dated: 26-11-2025 Printed from counselvise.com 3 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "