HARENDRA SHARMA,MORENA V. INCOME TAX OFFICER 2(2) GWALIOR, GWALIOR

ITA 332/AGR/2025

AI Insights

The case involves an appeal by Harendra Sharma against the order of the National Faceless Appeal Centre (NFAC), which sustained additions made by the Income Tax Officer under sections 147 and 144 of the Income-tax Act, 1961. The primary contention of the appellant was that the NFAC's order was passed without proper adherence to procedural requirements and without considering the substantive facts of the case. The Tribunal found that the NFAC had decided the issue ex parte and without independent findings on merits, leading to the decision to remand the case back to the NFAC for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774113 (ITAT-AGRA)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 28-06-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR
• Assessee Lawyers: RAJENDRA SHARMA
• Keywords: Set aside; Opportunity of being heard; Capital asset converted into stock in trade
• Section: 147; 148; 144

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “SMC”: AGRA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER (Through virtual hearing) ITA No. 332/AGR/2025 (Assessment Year: 2017-18) Harendra Sharma, Bolenath Gupta, Adarsh Nagar, Gali No. 1, Lohiya Bazar Porsa, Morena, MP 476115 Vs. Income Tax Officer, Ward-2(2), Gwalior PAN: CUQPS8743C Assessee by : Shri Rajendra Sharma, Adv Revenue by: Shri Anil Kumar, Sr. DR Date of Hearing 20/08/2025 Date of pronouncement 12/09/2025 O R D E R 1. The appeal in ITA No.322/AGR/2025 for AY 2017-18 arises out of the order of the ld. National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as „ld. NFAC‟, in short] in Appeal No. ITBA/NFAC/S/250/2025- 26/1075695847(1) dated 21.04.2025 against the order of assessment passed u/s 147 r.w.s. 144 of the Income-tax Act, 1961 dated 21.03.2023 (hereinafter referred to as „the Act‟) by NFAC, Delhi (hereinafter referred to as „ld. AO‟). 2. The assessee has raised the following grounds of appeal:- “1. That appellant order passed by NFAC dt. 21.04.2025 u/s 250 is bad in law, being passed not in accordance with the provisions 1 of section 250(6) of Income tax Act, liable to be set aside, addition sustained is liable to be deleted. 2. That while passing the order dt., 21.04.2025 u/s 250, NFAC have not followed the procedures laid down u/s 250(4) of Income tax Act, by which for passing of the fair order the CIT Appeal / NFAC may make enquiry, ask for remand report, from the AO, as per power vested U/s 250(4) which the NFAC has not done. The order passed by NFAC is bad in law, liable to be set aside. Printed from counselvise.com ITA No. 332/AGR/2025 Harendra Sharma Page | 2 3. That while passing the order, NFAC has completely ignored the facts. That provisions of section 148 are not attracted in the case 3 of the assessee, particularly on the reasons deposit in bank a/c, the order passed, making of addition, invoking of section 147 is bad in law, liable to be set aside. 4. That while passing the order u/s 250 dt. 21.04.2025, NFAC have completely ignored the facts that the AO while passing the order u/s 147/144 read with section 144B has not followed the procedures laid down u/s 144B of Income tax Act, being has not 4 passed the draft assessment order to be passed prior to passing of the order u/s 144 of Income tax Act, in absence of which the order passed by the AO is bad in law, liable to be set aside, the addition made by the AO, sustained by NFAC are liable to be deleted. 5. That while sustaining the addition made by the AO by applying the net profit rate of 5% on the total turnover disclosed by the assessee, the NFAC not considered, that prior to estimating the 5 income AO has not invoked the provisions of section 145(2) of Income tax Act, books of a/c maintained have accepted, no addition is liable to be made which the NFAC has ignored and has sustained as made by the AO, liable to be deleted. 6. That the NFAC while passing the order dt. 21.04.2025 u/s 250, has completely ignored that while passing the assessment order u/s 144, the AO has not followed the procedures as laid down u/s 144 of Income tax Act by which prior to passing of the order, the 6 AO has to compute the income on the basis of material gathered OR taking into consideration the past history of the assessee, the assessment order passed, without following the procedures as laid down u/s 144 is bad in law, which the NFAC has not considered while sustaining the addition. 7. That the AO has made the addition by applying the net profit rate 5% on the total turnover disclosed by the assessee, the net profit rate applied by the AO @ 5% is without any basis, having no material in support of the same, profit so estimated is highly 7 unjustified, against the provisions of Income tax Act, liable to be deleted, while sustaining the addition the NFAC has not considered the above facts. The order passed by the NFAC is bad in law addition made by AO sustained by NFAC is liable to be deleted.” 3. I have heard the rival submissions and perused the material available on record. On perusal of the order of the ld National Faceless Appeal Centre (NFAC), I find that the ld NFAC had decided the issue ex parte without adjudicating the issue on merits giving its independent finding. Hence, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to the file of the ld NFAC for de novo adjudication in accordance with law. Printed from counselvise.com ITA No. 332/AGR/2025 Harendra Sharma Page | 3 Needless to mention that the assessee be given reasonable opportunity of being heard. The assessee is at liberty to file fresh evidences, if any, and raise fresh grounds, if any, in support of his contentions. The assessee is directed to cooperate with the ld NFAC for expeditious disposal of the appeal by not taking unwarranted adjournments except due to bona fide or exceptional circumstances. With these observations, grounds raised by the assessee are allowed for statistical purposes. 4. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 12/09/2025. -Sd/- (M. BALAGANESH) ACCOUNTANT MEMBER Dated: 12/09/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "