HARBHAJAN SINGH LALWANI, DURG,DURG V. ITO, WARD-1(1), BHILAI, BHILAI

ITA 727/RPR/2025

AI Insights

The case involves Harbhajan Singh Lalwani, the appellant, who contested the dismissal of his rectification application by the CIT(Appeals)/NFAC. The dismissal was based on the grounds that no written submissions were filed, despite the appellant's claim of having submitted them during a physical hearing. The appellant argued that the written submissions were indeed filed but were not considered due to the transition from physical to faceless appeal processes. The Tribunal recognized the procedural oversight and emphasized the need for a fair hearing, adhering to the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790639 (ITAT-RAIPUR)
• Duration Of Justice: 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 27-11-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: YASH JAIN
• Keywords: Set aside; Business income; Principle of natural justice
• Section: 143(3); 154; 44AD

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.727/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2015-16 Harbhajan Singh Lalwani Raipur Naka, Sindhi Colony, Durg-491 001 (C.G.) PAN: ACKPL6958N .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(1), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Yash Jain, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 05.12.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 05.12.2025 Printed from counselvise.com 2 Harbhajan Singh Lalwani Vs. ITO, Ward-1(1), Bhilai ITA No.727/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 01.04.2024 for the assessment year 2015-16 as per the following grounds of appeal: “1. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in dismissing the rectification application filed under section 154 of the Income-tax Act, 1961, seeking restoration of the appeal erroneously dismissed on the ground of non-filing of submissions, despite the fact that the written submissions had already been filed physically before the Commissioner of Income-tax (Appeals), Raipur-2. 2. In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC ought to have rectified the erroneous dismissal order and adjudicated the appeal against the assessment order on merits, instead of reiterating the incorrect finding that no written submission had been filed by the appellant. 3. The impugned order is bad in law and on facts. 4. The appellant reserves the right to add, alter, omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority.” 2. Brief facts in this case are that the assessee is engaged in the business of retail trade of mobile handsets. There was a family dispute between the assessee and his brother Shri Meherban Singh who was looking after the tax matters. Brother filed the return of income u/s. 44AD of the Income Tax Act, 1961 ( for short the ‘Act’) declaring income of Rs.2,68,900/- on a turnover of Rs.12,50,600/- without the knowledge of Printed from counselvise.com 3 Harbhajan Singh Lalwani Vs. ITO, Ward-1(1), Bhilai ITA No.727/RPR/2025 the assessee. During assessment proceedings, the A.O estimated net profit of income at 3% of the total sales and service receipts of Rs.6,17,23,546/- and assessed total income at Rs.18,31,390/- u/s. 143(3) of the Act. 3. Being aggrieved, the assessee preferred an appeal before the Ld. CIT(Appeals)/NFAC and the said authority held and observed as follows: “2. Decision: The application of the assesse relates to certain written submissions alongwith annexures filed on 19.12.2019 before the CIT(Appeal) in physical form and not having been considered in proceedings u/s.250. These submissions are not available on record. Further, consideration of these submissions now after completion of proceedings u/s.250 tantamounts to review of the appeal proceedings and a debatable issue is involved. Therefore, this is not covered in section 154 as mistake apparent from record. Therefore, the application of the assesse is dismissed as non-maintainable.” 4. It is the contention of the Ld. Counsel for the assessee that when the appeal was filed before the Ld. CIT(Appeals)-2, Raipur, the assessee had filed detailed written submission a/w. supporting documents during the physical hearing held on 19.02.2019. The appeal was later migrated to the National Faceless Appeal Centre (NFAC) and thereafter, the Ld. CIT(Appeals)/NFAC dismissed the appeal in limine holding that no written submission was filed, without considering or acknowledging the written submission already filed before the Ld. CIT(Appeals)/NFAC. The assessee therefore, prays that the matter may be remanded to the file of the Ld. Printed from counselvise.com 4 Harbhajan Singh Lalwani Vs. ITO, Ward-1(1), Bhilai ITA No.727/RPR/2025 CIT(Appeals)/NFAC for denovo adjudication on merits as per written submission and evidences already placed on record. 5. In this regard, the Ld. Sr. DR did not raise any objection. 6. Having heard the submissions of the parties herein and considering the documents on record, it is discernable that the Ld. CIT(Appeals)/NFAC had given findings where it states that though the assessee had filed written submissions before the Ld. CIT(Appeals) during physical hearing, however, when considering the matter in the NFAC, it held that there were no such written submissions on record. 7. Be that as it may, the assessee has only prayed for one final opportunity so that the Ld. CIT(Appeals)/NFAC may refer the submissions and evidences already filed on record. That even the statutory parameters clearly defines the manner of adjudication by the Ld. CIT(Appeals)/NFAC, to consider the merits of each of the grounds assailed before the said authority. That if final opportunity is provided to the assessee the position of the revenue shall also not be jeopardized. Rather, it is essential from the point of view of principles of natural justice that before arriving at a decision of levying or not certain additions on the assessee, correctness of such additions needs to be ascertained first and therefore, as per mandate Printed from counselvise.com 5 Harbhajan Singh Lalwani Vs. ITO, Ward-1(1), Bhilai ITA No.727/RPR/2025 of Section 250(4) & (6) of the Act, the Ld. CIT(Appeals)/NFAC should conduct enquiry and come out with a speaking order. 8. With these observations, I set aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file for denovo adjudication as per law and to verify whether written submissions a/w. documents have been filed by the assessee and to consider the same. That if, the Ld. CIT(Appeals)/NFAC does not find such submissions/documents which is possible since there was conversion from physical to faceless regime, in such scenario, the Ld. CIT(Appeals)/NFAC shall raise definite queries from the assessee for filing submissions/evidences and it would be mandatory also for the assessee to comply with those queries/notices from office of the Ld. CIT(Appeals)/NFAC. 9. As per the above terms, grounds of appeal raised by the assessee stands allowed for statistical purposes. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in open court on 05th day of December, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 05th December, 2025. SB, Sr. PS Printed from counselvise.com 6 Harbhajan Singh Lalwani Vs. ITO, Ward-1(1), Bhilai ITA No.727/RPR/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "