M/S JIL INFORMATION TECHNOLOGY LIMITED,NEW DELHI V. ASSTT. COMMISSIONER OF INCOME TAX, RANGE-3, LUCKNOW

ITA 363/LKW/2025

AI Insights

The case involves M/s Jil Information Technology Limited appealing against the orders of the Addl/JCIT(A), Panaji, which were initially passed under section 250 of the Income Tax Act, 1961. The primary contention was the ex-parte nature of the order and the subsequent additions made to the assessee's income under section 143(1) for the assessment year 2021-22. The additions included disallowances related to gratuity claims and employees' contributions to PF/ESI, which the assessee argued were unjustly added back to their income. The Tribunal found that the Addl/JCIT(A) had not adequately considered the assessee's submissions and had not provided a fair opportunity for the assessee to contest the additions, leading to the decision to remand the case for a thorough re-examination.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841973 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Appeal Filed On: 13-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.R.N. SHUKLA; ADDL
• Assessee Lawyers: B. P. YADAV
• Keywords: Principle of natural justice; TDS

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW ‘B’ BENCH, LUCKNOW BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.363/LKW/2025 A.Y. 2021-22 M/s Jil Information Technology Limited, 54, JA Annexe, Basant Lok, Vasant Vihar, New Delhi-110057 vs. Asstt. Commissioner of Income Tax, Range-3, Lucknow PAN: AAACJ8827B (Appellant) (Respondent) Assessee by: Sh. B.P. Yadav, Adv Revenue by: Sh. R.R.N. Shukla, Addl CIT DR Date of hearing: 23.12.2025 Date of pronouncement: 26.02.2026 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the orders of the Addl/JCIT(A), Panaji, passed under section 250 of the Income Tax Act, 1961 on 19.03.2025, wherein the ld. Addl/JCIT(A) has dismissed the appeals of the assessee against the orders under section 143(1) passed for the A.Y. 2021-22 by the ADIT, CPC, Bengaluru on 13.11.2022. The grounds of appeal are as under:- “1. The Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [hereinafter referred to as the \"Ld. CIT(A)\"] has erred on facts and in law in disposing the appeal of the appellant by passing an ex-parte order which is in gross violation of natural justice and fair play as the assessee was not provided reasonable opportunity to have its say on the merit of the additions made by the Ld. AO. 2. The Ld. CIT(A) has erred on facts and in law in not appreciating that the addition of Rs.78,17,622/-and also the addition of Rs.74,913/-do not fall under the purview of the clauses enshrined in section 143(1) of the I.T. Act, 1961 and also failed to appreciate that the additions made in the present case are in the nature of debate Printed from counselvise.com ITA No.363/LKW/2025 A.Y. 2021-22 M/s Jil Information Technology Limited 2 and discussion which keep these additions out of the purview of section 143(1) of the I.T. Act 1961. 3. By passing the ex-parte order, the Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.78,17,622/-made by the Ld. A.O. by grossly ignoring the fact that the amount of Rs.78,17,622/-claimed as deduction by the assessee on actual payment basis stood already offered to tax in the previous years by way of adding back the same to the net profit of the respective years. 4. On the facts stated in the statement of facts, the Ld. A.O. has erred on facts and in law in confirming the addition of Rs.78,17,622/-by grossly ignoring the fact that addition of Rs.78,17,622/-in the current year leading to tax the same amount twice and hence the addition so made deserves to be deleted. 5. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.74,913/-by grossly ignoring the fact that this addition was made entirely on the basis of presumption, surmise and conjecture as there has not been any delay in making payment of employees share of contribution to EPF/ESI and hence addition of Rs.74,913/-deserves to be deleted. 6. The Ld. CIT(A) has erred on facts and in law in giving less credit of TDS Rs.91,430/- as the amount of TDS reflected and claimed by the assessee was Rs.1,48,59,832/- whereas credit of TDS allowed by the Ld. A.O. was Rs.1,47,68,402/-. 7. Appellant reserves its right to advance such other grounds before or at the time of hearing, which it may consider fit and appropriate, for which it craves leave to alter, amend or otherwise modify the grounds appearing hereinbefore with kind permission of the Hon'ble Bench.” 2. The facts of the case are that the amount of Rs. 78,17,622/- was added back to the income of the assessee on account of disallowance of gratuity claim and another sum of R. 74,913/- was added back on account of disallowance of employees’ contribution to PF/ESI. Aggrieved by this order, the assessee filed an appeal before the NFAC which was subsequently migrated to the Addl/JCIT(A), Panaji. Before the ld. JCIT(A), it was submitted that the ADIT, CPC had erred in law and in facts in making the addition of Rs. 78,17,622/- by ignoring the law that, while passing an order under section 143(1), no addition could be made to the returned income of an assessee on an issue which was of a debatable nature and which required further verification and examination. He had further erred in making the addition of Rs. 78,17,622/- by ignoring the fact that the provision of gratuity of Rs. 45,88,650/- made during the Printed from counselvise.com ITA No.363/LKW/2025 A.Y. 2021-22 M/s Jil Information Technology Limited 3 current year had been added back to the current year’s income and tax had been paid thereon and the amount of Rs. 78,17,622/- claimed by the assessee during the year under consideration, had been added back to the income of the previous year and tax had been paid on the same in the year in which the provision were made. The assessee submitted that this practice had been followed by the assessee on a regular basis and there had not been any deviation in the method. So, the same had been followed in the current year also. The assessee further submitted that the tax auditor had issued a certificate to the effect that a sum of Rs. 78,17,622/- had actually been paid to the employees towards their gratuity and a copy of a certificate was submitted to the ld. Addl/JCIT(A) for his consideration. The assessee also pointed out that the AO had committed an error in disallowing Rs. 74,913/- on account of PF contribution. It was submitted that there had not been any delay in making the payment of employees’ contribution to their EPF and ESI and even the tax auditor had not given any such finding suggesting the addition of this amount on account of belated payment. Therefore, the addition was deserving of being quashed. Finally, the assessee submitted that the AO had failed to allow full credit for tax deducted at source which were supported by the online 26AS statement and a short credit of Rs. 91,430/- had been allowed. Accordingly, it was prayed that since the AO had not given proper opportunity for the assessee to explain the facts, the ld. Addl / JCIT(A) may kindly delete the addition. 3. However, the ld. Addl / JCIT(A) recorded the fact that he had issued two notices to the assessee on 30.12.2024 for compliance on 3.01.2025 and again on 6.03.2025 for compliance on 11.03.2025 and both these notices had not been complied with. The ld. Addl/JCIT(A) therefore, held that the assessee was not interested in pursuing the appeal and therefore, it was liable to be dismissed. Though he stated that he was adjudicating the issue on merits / facts and the basis of materials available on Printed from counselvise.com ITA No.363/LKW/2025 A.Y. 2021-22 M/s Jil Information Technology Limited 4 record, he thereafter proceeded to dismiss the appeal in limine without recording any finding on merits as such. 4. The assessee is aggrieved of this order of the ld. Addl/JCIT(A) and has therefore, come before us. Sh. B.P. Yadav, Advocate (hereinafter referred to as the AR) invited our attention to page 4 of the order of the Addl/JCIT(A) and pointed out that the extremely short time given between the issue of the notice and the date for compliance would in itself show that adequate opportunity was not provided to the assessee to represent its case. Furthermore, he argued that the ld. Addl/JCIT(A) had finalized the appeal after the issue of only two notices and while he had mentioned that he was deciding the issue on merits, in fact had not considered any of the arguments of the assessee. He, therefore, prayed that the matter may be kindly be restored to the file of the ld. Addl / JCIT(A) so that the assessee may be able to present its case before him. 5. On the other hand, Shri. R.R.N. Shukla, ld. CIT DR (hereinafter referred to as the DR) pointed out that as the assessee had filed the appeal, it was for the assessee to remain vigilant to the notices issued two notices to the assessee which had not been complied with. Therefore, in the absence of any material, the Addl/JCIT(A) could not but have passed the order that he had. However, he had no objection to the matter being sent back to the Addl/JCIT(A) for adjudicating on merits, if the Tribunal in its wisdom thought the same to be necessary. 6. We have duly considered the facts and circumstances of the case. It is self- evident from the extremely short time period given for the compliance to the notices that the assessee was not afforded due opportunity to present its case by the ld. Addl/JCIT(A). The ld. Addl/JCIT(A) also did not address any of the issues raised by the assessee on its merits, even though the assessee had not withdrawn the appeal. In our opinion, even if the Addl/JCIT(A) was inclined to pass an ex parte order, which he Printed from counselvise.com ITA No.363/LKW/2025 A.Y. 2021-22 M/s Jil Information Technology Limited 5 ought not to have been considering that he had granted inadequate opportunities to the assessee, he was still obliged to address the issues raised by the assessee on their merits as the assessee had not withdrawn the appeal. Since, the order of the ld. Addl/JCIT(A) is passed in a manner that is completely at variance with the principles of natural justice, we deem it appropriate in the interest of justice, to restore the appeal back to him so that the assessee may be afforded a proper opportunity of representing its case and thereafter the ld. Addl/JCIT(A) may pass an appropriate order in accordance with law. As the matter stands remanded back to the file of the ld. Addl/JCIT(A), the appeal of the assessee is held to be allowed for statistical purpose. 7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 26.02.2026. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26/02/2026 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR , ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S. Printed from counselvise.com "