M/S. VARDA ESTATE AND PROPERTIES PVT. LTD.,LUCKNOW V. DEPUTY COMMISSIONER OF INCOME TAX, RANGE-6, LUCKNOW

ITA 109/LKW/2020

AI Insights

The case involves M/s Varda Estate and Tax Properties Pvt. Ltd, which appealed against the orders of the Commissioner of Income Tax (Appeals)-2, Lucknow, for the Assessment Year 2017-18. The assessee, engaged in real estate, had filed a return showing a nil income and a loss of Rs.8,15,53,383. The case was selected for Limited Scrutiny, but due to non-compliance with notices under sections 143(2) and 142(1) of the Income Tax Act, 1961, the AO proceeded to complete the assessment under section 144, assessing the income at Rs.75,37,010. The CIT(A) dismissed the appeal due to non-compliance by the assessee. The Tribunal found that both the AO and CIT(A) had passed ex-parte orders without providing a reasonable opportunity of hearing, leading to the restoration of the case to the AO for a fair hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 31923 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 08-08-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 23-08-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S. B.USMANI
• Assessee Lawyers: KUMAR SAURAV
• Section: 144; 143(2); 6

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.109/LKW/2020 Assessment Year: 2015-16 M/s Varda Estate and Tax Properties Pvt. Ltd 8, Jagdish Chanda Bose Marg Lalbagh, Lucknow v. The Dy. CIT Range - 6, Lucknow TAN/PAN:AAECV0063D (Appellant) (Respondent) Assessee by: Shri Kumar Saurav, C.A. Revenue by: Shri S. B.Usmani, CIT(DR) Date of hearing: 08 08 2024 Date of pronouncement: 29 10 2024 O R D E R PER SUDHANSHU SRIVASTAVA, J.M.: This appeal has been preferred by the Assessee against the order dated 04.12.2019, passed by the ld. Commissioner of Income Tax (Appeal)-2 (ld. CIT(A)), Lucknow for Assessment Year 2017-18. 2. The brief facts of the case are that the Assessee is engaged in the business of Real Estate. The Assessee e-filed its return of income on 31.03.2016 at Nil income and showing current loss of Rs.8,15,53,383/-. The case of the Assessee was selected for Limited Scrutiny and, accordingly, notice under ITA No.109/LKW/2020 Page 2 of 6 section 143(2) of the Income Tax Act, 1961 (hereinafter called 'the Act') was issued to the Assessee. However, there was no compliance by the Assessee. Thereafter, notice under section 142(1) of the Act was issued to the Assessee. Again, there was no compliance by the Assessee. Since there was no compliance by the Assessee, the Assessing Officer (AO) issued show cause notice under section 144 of the Act, to which notice also there was no compliance by the Assessee. 2.1 On perusal of the Individual Transaction Statement (ITS) of the Assessee, the AO noticed that the Assessee had deposited cash amounting to Rs.28,83,000/- in his bank account, but the revenue from the same was shown at Nil. Subsequently, the case was selected for complete scrutiny. Since the Assessee had not complied with the notices issued by the AO, he completed the assessment under section 144 of the Act, assessing the total income of the Assessee at Rs.75,37,010/- as against the loss of Rs.8,15,53,383/- declared by the Assessee. The AO made the following additions/disallowance: Addition of Net profit from business : Rs.31,64,669/- Disallowance of 20% of the expenses : Rs.14,89,344/- Addition of Income from other sources : Rs.28,83,000/- ITA No.109/LKW/2020 Page 3 of 6 3. Aggrieved, the Assessee preferred an appeal before the ld. CIT(A). However, the appeal before the ld. CIT(A) came to be dismissed for the reason of non-compliance by the Assessee. 4. Now, the Assessee has approached this Tribunal challenging the actions of the AO as well as the ld. CIT(A) by raising the following grounds of appeal: 1. BECAUSE, on the facts and in the circumstances of the case, the Ld. CIT(A), erred in dismissing the appeal of the assessee as the instant Assessment order is itself bad in law as the statutory notice u/s 144 of the Income Tax Act has not been issued before the passing of the Assessment Order and hence the impugned assessment order passed is without jurisdiction and liable to be quashed. 2. BECAUSE, on the facts and in the circumstances of the case, the Ld. CIT(A), erred in dismissing the appeal of the assessee as the instant Assessment order is itself bad in law as the statutory notice u/s 143 of the Income Tax Act has not been issued before the passing of the Assessment Order as also by the jurisdictional Assessing Office and hence the Assessment Order is liable to be quashed. 3. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has grossly erred in confirming an addition of Rs.8,47,18,052/ to the return loss of the assessee without appreciating the true and correct facts and circumstances of the case and without assigning any reason to sustain the impugned addition. The impugned order is non speaking and has not adjudicated the ITA No.109/LKW/2020 Page 4 of 6 merits of addition made by Assessing Office while the CIT(A) is obliged, under law. The addition made is patently arbitrary and whimsical and hence liable to be deleted. 4. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by the Ld. Commissioner of Income Tax (Appeals) is bad in law and on facts as, the Ld. CIT (A) has failed to take into account, the reasons and that the explanations, furnished by the assessee through the statement of facts, etc which constrained, representation of the assessee before the Assessing Officer. The impugned order has been passed without adjudication of the contentions set-forth by the assessee. 5. BECAUSE, on the facts and in the circumstances of the case, the averments contained in statement of fact, filed by the assessee, have not been found to be false or untrue or has in any other manner been contradicted by the Assessing Officer/CIT(A). Hence the averments made therein, having remained, unrefuted, deserve acceptance in the light of Evidence Act and other judicial pronouncements and the addition is liable to be deleted/fresh hearing be granted to assessee. 6. Because the order of the Ld. Assessing Officer is not based on correct facts and proper appreciation of law and is liable to be cancelled. 7. The appellant craves for leave to adduce any other ground of appeal, with the permission of your honours. 5. The ld. Authorized Representative for the Assessee submitted before us that the both the authorities below have ITA No.109/LKW/2020 Page 5 of 6 passed ex-parte orders without providing reasonable opportunity of hearing to the Assessee. It was submitted that the notices issued by the AO were never received by the Assessee, and therefore, the Assessee could not be represented before the AO. The ld. A.R. prayed that in the interest of justice, the appeal may be restored to the file of the AO where the Assessee can present his case with necessary evidences. 6. The Ld. Sr. D.R. had no objection to the restoration of appeal to the Office of the AO, as requested by the ld. A.R. 7. We have heard both the parties and have also perused the material on record. Looking into the facts of this case, we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, we restore this file to the Office of the AO with the direction to provide one more opportunity to the assessee to present its case along with necessary evidences. We also caution the assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO shall be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee. ITA No.109/LKW/2020 Page 6 of 6 8. In the result, the appeal of the assessee stands allowed for statistical purposes. Order pronounced in the open Court on 29/10/2024. Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:29/10/2024 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR By order Assistant Registrar "