IEC PROJECTS LIMITED,AHMEDABAD V. THE DY.CIT, CIRCLE-2(1)(1), AHMEDABAD

ITA 548/AHD/2025

AI Insights

The case involves IEC Projects Limited appealing against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 3,74,50,000 as unexplained investment under Section 69 of the Income Tax Act, 1961. The assessee argued that the CIT(A) decided the appeal ex-parte without proper notice, violating principles of natural justice. The Tribunal found that the assessee had indeed received notice and had responded, but still imposed a cost for misrepresentation. The matter was remanded back to the CIT(A) for a decision on merits, with instructions for the assessee to ensure compliance and proper communication in future proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786817 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 12-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAMTA SINGH
• Assessee Lawyers: KUSHAL FOFARIA; TUSHAR HEMANI
• Keywords: Set aside; Unexplained investment; Principle of natural justice
• Section: 143(3); 69

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.548/Ahd/2025 Assessment Year: 2018-19 IEC Projects Limited, 22, Dhara Centrea, Near Vijay Char Rasta, Navrangpura, Ahmedabad – 380 009. (Gujarat) [PAN – AABCI 0943 G] Vs. Deputy Commissioner of Income Tax, Circle – 2(1)(1), Aayakar Bhavan (Vejalpur), Nr. Sachin Tower, 100 Foot Road, Anandnagar-Prahladnagar Road, Ahmedabad – 380 015. (Gujarat). (Appellant) (Respondent) Assessee by Shri Kushal Fofaria, AR for Shri Tushar Hemani, Sr. Advocate Revenue by Smt. Mamta Singh, Sr. DR Date of Hearing 03.11.2025 Date of Pronouncement 19.11.2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 04.03.2025 for the Assessment Year (A.Y.) 2018-19 in the proceeding under Section 143(3) read with Section 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2018-19. declaring total income of Rs.3,96,870/-. Printed from counselvise.com ITA No.548/Ahd/2025 (Assessment Year: 2018-19) IEC Projects Limited vs. DCIT Page 2 of 5 The case was selected for complete scrutiny under CASS. In the course of assessment, the Assessing Officer noticed that the assessee had not disclosed the investment of Rs.3,74,50,000/- made during the year under consideration, in 10,07,000 equity shares in the Company M/s. Corrtech International Pvt. Ltd. Therefore, this investment was treated as unexplained and added to income under Section 69 of the Act. The Assessing Officer had also made addition of Rs.2,20,25,870/- @ 8% of gross receipt in the bank account of the assessee which was, however, telescoped with the addition of Rs.3,74,50,000/- made under Section 69 of the Act and no separate addition was made in this regard. The assessment was completed under Section 143(3) of the Act on 19.04.2021 at a total income of Rs.3,78,76,873/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee in second appeal before us. The following grounds have been taken in this appeal: - “1. The Ld. CIT(A) has erred in law and on facts of the case in deciding the appeal ex-parte in gross violation of principles of natural justice. 2. The Ld. CIT(A) has erred in law and on facts of the case in deciding the appeal ex-parte without even dealing with the adjournment request dated 13.02.2025. 3. The Ld. CIT(A) has erred in law and on facts of the case in confirming the addition of Rs.3,74,50,000/- as unexplained investment u/s. 69 of the Act. 4. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of ld. AO in invoking the provisions of Section 115BBE of the Act. Printed from counselvise.com ITA No.548/Ahd/2025 (Assessment Year: 2018-19) IEC Projects Limited vs. DCIT Page 3 of 5 5. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in rejecting the books of accounts u/s.145(3) of the Act. 6. The Ld. CIT(A) has erred in law and on facts of the case in confirming estimated contractual receipts of Rs.27,53,23,377/- and profit estimated thereon amounting to Rs.2,20,25,870/-. 7 Alternatively and without prejudice, the estimation of profit @ 8% of contractual receipts is highly excessive and does not reflect the real income earned by the appellant. 8. Alternatively and without prejudice, the declared profit as per the books of accounts ought to have been set off against the estimated profit. 9. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 10. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s.234A/B/C/D of the Act. 11. The Ld. CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty proceedings under various sections of the Act. 12. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 5. Shri Kushal Fofaria, Ld. AR of the assessee submitted that no compliance was made before the Ld. CIT(A), who had dismissed the appeal of the assessee on the ground of non-prosecution. He explained that in Form no. 35, the assessee had mentioned e-mail address “[e-mail]” and a specific option was given that no notices/communication should be sent on this e-mail. In spite of this fact, the notices were sent by the Ld. CIT(A) only on the e-mail and no physical notice was sent. The Ld. AR submitted that the notices sent on e-mail Printed from counselvise.com ITA No.548/Ahd/2025 (Assessment Year: 2018-19) IEC Projects Limited vs. DCIT Page 4 of 5 account were not accessed, which resulted in non-compliance before the Ld. CIT(A). He, therefore, requested that the matter may be set aside to the file of the Ld. CIT(A) with a direction to allow another opportunity to the assessee. 6. Per contra, Smt. Mamta Singh, Ld. Sr. DR had no objection if the matter was set aside to the file of the ld. CIT(A). 7. We have considered the request of the assessee. It is found that in Form No.35, the assessee had opted that no notices/communication may be sent on e-mail. The contention of the assessee is that the notices sent through the e-mail communication were not accessed by the assessee which led to non-compliance before the Ld. CIT(A). It is, however, found from the order of the Ld. CIT(A) that three opportunities were provided by him and the assessee in response to the second notice dated 04.02.2025 had filed a response on 13.02.2025 requesting for adjournment. Accordingly, the Ld. CIT(A) had adjourned the matter to 24.02.2025 when there was no compliance by the assessee. Thus, the submission made by the assessee that the notices sent by the Ld. CIT(A) vide e-mail communication were not received or accessed by the assessee, is not found correct. The assessee had not only received the notice sent through e-mail communication but had also responded and sought for an adjournment. In view of this mis-representation made by the assessee and also the fact that no reasonable explanation has been given for non- compliance before the Ld. CIT(A), we deem it appropriate to impose a cost of Rs.10,000/- on the assessee which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days of receipt of this order. Further, since the appeal of the assessee was Printed from counselvise.com ITA No.548/Ahd/2025 (Assessment Year: 2018-19) IEC Projects Limited vs. DCIT Page 5 of 5 not decided by the Ld. CIT(A) on merit, we deem it proper to set aside the matter to the file of the Ld. CIT(A) with a direction to allow one amore opportunity to the assessee, subject to payment of cost as directed earlier. The assessee is also directed to make regular access to the e-mail address as communicated to the Department, for the notice of the Ld. CIT(A) and respond to the same in time. The assessee will be at liberty to bring on record evidences in support of the grounds as taken before the Ld. CIT(A), who will be free to call for remand report of the Assessing Officer, if found necessary. In case the assessee does not make compliance in the course of set aside proceeding, the Ld. CIT(A) will be at liberty to decide the matter on merits on the basis of the materials available on record. 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 19th November, 2025. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 19th November, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "