JKN INDUSTRIES PRIVATE LIMITED,G B NAGAR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(1) G B NAGAR , G B NAGAR

ITA 2824/DEL/2024

AI Insights

This case involves an appeal by JKN Industries Pvt. Ltd. against the order of the CIT(A)/National Faceless Appeal Centre, which dismissed the Assessee's appeal ex-parte for the Assessment Year 2017-18. The primary contention was the ex-parte nature of both the assessment and the appellate orders, which the Assessee argued violated the principles of natural justice. The Assessee also challenged the jurisdiction of the A.O. and the validity of the assessment made under section 144 of the Income Tax Act, 1961, which significantly increased the assessed income compared to the returned income. The Tribunal found merit in the Assessee's arguments regarding the lack of opportunity to be heard and directed a re-assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474881 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 22-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 03-06-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Assessee Lawyers: VAIBHAV GOEL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 144; 143(2); 68; 145(3)

Judgement Text

" 1 ITA No. 2824/Del/2024 JKN INDUSTRIES (p) Ltd. Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 2824/Del/2024, (A.Y.2017-18) JKN Industries Pvt. Ltd. C/o CA Vaibhav Goel, 75 Navyug Market, 1st Floor Ghaziazbad, Uttar Pradesh PAN No: AADCJ4966E Vs. Assistant Commissioner of Income Tax Circle- 5(1)G B Nagar, Aayakar Bhawan, A-2D, Sesctor- 24, (Gautam Budh Nagar) Noida, Uttar Pradesh New Delhi (Appellant) (Respondent) Appellant by Sh. Vaibhav Goel, CA Respondent by Shri Om Prakash, Sr. DR Date of Hearing 22/10/2024 Date of Pronouncement 25/10/2024 ORDER PER YOGESH KUMAR U.S., JM : This appeal is filed by the Assessee against the order of Ld. CIT(A)/National Faceless Appeal Centre [“NFAC” for short], dated 31/03/2024 for the Assessment Year 2017-18. 2. The grounds of Appeal are as under: - “1. That, on facts and circumstances of the case, Ld. CIT(A) erred in dismissing the appeal ln limine for non-prosecution without going either into the merits of the case or discussing the various grounds of appeal filed by the appellant. 2 ITA No. 2824/Del/2024 JKN INDUSTRIES (p) Ltd. Vs. ACIT 2. That, on facts and circumstances of the case, without prejudice to the fact that no notice u/s 143(2) of the income Tax Act, 1961 was received by the appellant, \"Ld ACIT, Circle 5(1)(1) G B Nagar had erred in arbitrarily assuming jurisdiction in utter disregard and contravention of the CBDT instruction No.01/2011 dated 31\"01.2011; 2.1. That, issuance of notice u/s 143(2) of the Income Tax Act, 1961 by a no jurisdictional AO is non-est; thus, any order pursuant to that notice is also not valid in law, 3. That, on facts and circumstances of the case, Ld. CIT(A) erred in dismissing the appeal of the appellant without affording proper opportunity. 4. That, on facts and circumstances of the case, Ld. CIT(A) erred in dismissing the appeal as no notice of the hearing was received by the appellant. Without prejudice to grounds of appeal 1 to 4. 5. That Ld. A.O. has erred in law as well as on the facts of the case by completing the assessment u/s 144 of the Act on total income of Rs. 74,66,261 against returned income of Rs. 7,04,830 without serving any notice upon the Assessee. 6. That Ld. A.O. has erred in law as well as on the facts of the case by completing the assessment u/s 144 of the Act on total income of Rs. 74,66,261 against returned income of Rs. 7,04,830 violating the principal of natural justice without affording 5 I proper opportunity of hearing and by making arbitrary additions and passed high pitched assessment order 3 ITA No. 2824/Del/2024 JKN INDUSTRIES (p) Ltd. Vs. ACIT 7. That Ld. A.O. arbitrarily invoked section 145(3) of l.T. Act and made arbitrarily profit estimate without requisite satisfaction in law and without due regard the fact that there is no comparable past history to support hypothetical estimate made which is de horse mentioned on record, ergo basis profits enhanced by Rs. 32,57,431 is out rightly invoked and unreasonable without sanction of law B. 8. That Ld. A.O. arbitrarily make addition of cash deposit of Rs. 35,04,000i- u/s 68 where admittedly required books are not there before Ld. A.O. as mandate L/s 68 of the Act. Being jurisdictional facts same which invoke of Section 68 and 1 15BBE became ultra virus to the law and that without prejudice to the above, cash deposit was out of available cash in hand as per audited books; 9. That assessment made on income of Rs. 7,46,626/- against the returned income of Rs. 7,04,830/- and levy of tax at Rs. 48,47,6931- is highly excessive 10. That charging of interest u/s 234A 2UB 234C is highly excessive. 11 . That the appellant reserves its right to add amend/ modify the grounds of appeal.” 3. Brief facts of the case are that, an assessment order came to be passed on 17/10/2019 u/s 144 of the Income Tax Act, 1961 (‘Act’ for short) by determining the total income of at Rs. 74,66,261/- as against the returned income of Rs. 7,04,830/-. Aggrieved by the assessment order dated 17/10/2019, the Assessee preferred an Appeal before the CIT(A). The Ld. CIT(A) vide order dated 31/03/2024 dismissed the Appeal filed by the 4 ITA No. 2824/Del/2024 JKN INDUSTRIES (p) Ltd. Vs. ACIT Assessee ex-parte. As against the order of the Ld. CIT(A) dated 31/03/2024, the Assessee preferred the present appeal on the grounds mentioned above. 4. The Ld. Counsel for the Assessee submitted that both the orders of the Lower Authorities were passed ex-parte. The Assessee could not participate in the assessment proceeding as the Assessee has not received notice from the A.O. Further submitted that the Ld. CIT(A) has also dismissed the Appeal ex-parte, which are in violation of the principles of natural justice. 5. Per contra, the Ld. Departmental Representative relying on the orders of the Lower Authorities, sought for dismissal of the Appeal. 6. We have heard both the parties and perused the material available on record. It is seen from the record both the assessment order as well as order of the Ld. CIT(A) has been passed ex-parte, considering the fact that the Assessee has not been heard before passing the orders by the authorities below, we deem it fit to restore the matter to the file of the Ld. A.O. with a direction to the A.O. to frame de-novo assessment after providing adequate opportunity of being heard to the Assessee. Further we also direct the Assessee to participate and cooperate with the proceedings before the Ld. CIT(A) without fail. Ordered accordingly. 5 ITA No. 2824/Del/2024 JKN INDUSTRIES (p) Ltd. Vs. ACIT 7. In the result, the Appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in open Court on 25th October, 2024 Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25/10/2024 R.N, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "