KATARIA TRANSWORLD,AHMEDABAD V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), AHMEDABAD., AHMEDABAD

ITA 2245/AHD/2025

AI Insights

The case involves Kataria Transworld, the appellant, contesting an exparte reassessment order under sections 147 and 144 of the Income Tax Act, 1961, for the Assessment Year 2015-16. The reassessment led to the addition of Rs. 3,65,84,053 as business income, which the appellant argued was incorrect as they had incurred substantial contract expenditures against the receipts. The appellant also challenged the validity of the notice under section 148 of the IT Act, claiming it was void and invalid. The CIT(A) had previously dismissed the appeal for non-prosecution, prompting the appellant to file an appeal with the Tribunal, which was accepted despite a delay, attributed to issues with the previous consultant.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 830998 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 25-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Reopening of assessment
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T. R. Senthil Kumar, Judicial Member Kataria Transworld 231, BH Calico Nagar, B/h Ayurvedic Hospital Narol, Narol Chokdi, Ahmedabad-380001, Gujarat PAN: AANFK0978J (Appellant) Vs The Assistant Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad (Respondent) Assessee Represented: Shri Vihar Soni, A.R. Revenue Represented: Smt. Ananya Kulshresth, Sr. D.R. Date of hearing : 13-01-2026 Date of pronouncement : 21-01-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the exparte appellate order dated 29-07-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte reassessment order under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2015-16. ITA No: 2245/Ahd/2025 Assessment Year: 2015-16 Printed from counselvise.com I.T.A No. 2245/Ahd/2025 A.Y. 2015-16 Page No Kataria Transworld vs. ACIT 2 2. The registry has noted that there is a delay of 56 days in filing the above appeal. The Partner of the assessee firm filed a Notarized Affidavit stating that the appellate hearing notices were issued to the erstwhile Consultant who has not informed the hearing dates which has resulted in passing exparte order. Later she appointed a new Consultant and filed the above appeal with the delay of 56 days and requested to condone the delay. 3. We have perused the appellate order, Ld. CIT(A) had given three opportunities of hearing on 02-05-2025, 22-05-2025 and 03-06-2025. On the third hearing, the assessee requested for adjournment of 15 days, which was not acceded by Ld. CIT(A) and dismissed the appeal for non-prosecution. Thus we hereby condone the delay of 56 days in filing the appeal. 4. The Grounds of Appeal raised by the assessee are as follows: 1. The notice u/s 148 of the I.T. Act dated 31-03-2021 is void and invalid in law and hence, the same is liable to be quashed. 2. Ld. CIT(A) erred in law and on facts in confirming the addition made by the AO of Rs. 3,65,84,053/- as business income. 3. Both Ld. CIT(A) and the AO erred in law and on facts in not appreciating that against the contract receipts of Rs. 3,65,84,053/, appellant has incurred contract expenditure of Rs. 3,58,30,607/- which is evident from the bank account statements and it has also incurred other indirect expenses in course of the business and thus, the contract receipts of Rs. 3,65,84,053/- does not represent appellant's business income in its entirety. 4. Ld. AO's act of treating entire contract receipts of Rs.3,65,84,053/- as business Income and Ld. CIT(A)'s confirming of such action of the AO are not in line with the settled law that in case of best judgement assessment u/s 144 of the Act also, the AO needs to make fair and reasonable estimate of the income of assessee. 5. The Appellant reserves the right to add, alter, amend and withdraw any of the above grounds of appeal. Printed from counselvise.com I.T.A No. 2245/Ahd/2025 A.Y. 2015-16 Page No Kataria Transworld vs. ACIT 3 5. The assessee also raised Legal ground on reopening of assessment apart from the merits of the case. Since the appellate order being an exparte order, we deem it fit to set-aside the matter to the file of Ld. CIT(A) to decide first the Legal ground raised by the assessee on reopening of assessment by giving one more opportunity of hearing to the assessee by sending Physical notice of hearing to the assessee and email id [e-mail] and Mobile No. 8980171867. Needless to say the assessee should make use of this final opportunity and place on record all relevant materials before Ld. CIT(A) to pass order on jurisdiction and merits of the case. 6. In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose. Order pronounced in the open court on 21-01-2026 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 21/01/2026 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद Printed from counselvise.com "