MMC AND H PHARMACIES,HAPUR V. NFAC, DELHI

ITA 5482/DEL/2024

AI Insights

The case involves MMC and H Pharmacies, the appellant, who appealed against the penalty imposed by the Assessing Officer under section 271A of the Income Tax Act, 1961, for not maintaining the required books of accounts. The appellant had not filed a return of income for the assessment year 2017-18 despite significant cash deposits and interest income reported. The Assessing Officer reopened the case, issued notices, and eventually imposed a penalty, which was upheld by the CIT(A). The appellant contested the decision, arguing that their written submissions were not considered, leading to a violation of the principles of natural justice. The Tribunal agreed with the appellant, noting the absence of consideration of their submissions in the CIT(A)'s order, and thus set aside the CIT(A)'s decision, remanding the case for a fresh hearing.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838085 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Appeal Filed On: 26-11-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Keywords: Set aside; Business income; Principle of natural justice
• Section: 147

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’: NEW DELHI BEFORE SHRI RAJ KUMAR CHAUHAN, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No.5482/Del/2024, A.Y. 2017-18 MMC and H Pharmacies, 311-Abu Lane 52-Moh, Math Maliyan, Pillkhuma Dehat, Hapur, Uttar Pradesh PAN: ABBFM1135G Vs. Assessing Officer, NFAC, India (Appellant) (Respondent) Appellant by None Respondent by Ms. Ankush Kalra, Sr. DR Date of Hearing 04/02/2026 Date of Pronouncement 04/02/2026 O R D E R PER RAJ KUMAR CHAUHAN , J.M. : This appeal is filed by the assessee /appellant against the order of Learned Commissioner of Income Tax (Appeals)/ NFAC, Delhi [hereinafter referred to as the “CIT(A)”], passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] dated Printed from counselvise.com ITA No. 5482/Del/2025 MMC and H Pharmacies 2 13.09.2024 wherein the penalty order imposed by Assessing Officer (‘AO’) u/s 271A of the Act for not maintaining the books of accounts was confirmed. 2. Aggrieved by the impugned order assessee is in appeal before us and has raised following grounds: - “1. In view of the facts circumstances and written aguments placed on record the ld. CIT(A)/NFAC is not justified in ignoring the submission made by the appellant/assessee and thereby by confirming the penalty imposed u/s 271A, by Assessing Officer is most arbitrary and in any case highly excessive uncalled for and liable to be cancelled. 2. The assessee craves leave to take additional grounds of apepal or at the time of hearing of the appeal and/or modify any of the above grounds.” 3. The facts in brief as culled out from the appellant proceedings are that the appellant, an individual, has not filed return of income for A.Y. 2017-18. As per information with the department, the appellant has made cash deposits of Rs. 1,08,03,500/- in the current bank account maintained with Bank of Baroda, Mansopur Branch, Muzararnagar during the financial year 2016-17 and has earned interest of income of Rs. 15,510/- u/s 194A of the Act. Since no return of income was filed, the case was reopened u/s 147 of the Act. Various statutory notices were issued to the appellant and thereafter appellant has filed return of income for A.Y. 2017-18 on 21.09.2021 declaring the loss at Rs. 4,159/-. The assessment proceedings were completed and addition of Rs. 8,68,439/- was made on Printed from counselvise.com ITA No. 5482/Del/2025 MMC and H Pharmacies 3 account of business income. The said assessment order was challenged before the Ld. CIT(A) who has confirmed it. Separate penalty proceedings were initiated and vide impugned penalty order dated 22.09.2022, a penalty of Rs. 25,000/- was imposed u/s 271A of the Act on the ground that the assessee has not maintained the books of accounts and document mandatory required u/s 44AA of the Act. The said penalty order was challenged which was confirmed by the impugned order. 4. We have heard Ld. AR for the assessee and Ld. DR for the Revenue and examined the report. The only contention raised before us is that the impugned order has been passed without following principle of natural justice because the written arguments placed on record before the Ld. CIT(A) has not been considered. After going through the impugned order, we have noticed that there was nothing to rebut the said arguments raised on behalf of the assessee/appellant by the Revenue and on perusal of the impugned order, it is noticed that there is no mention of filing of written argument or affording opportunity of hearing by the Ld. CIT(A). 5. In these facts and circumstances, the impugned order is not sustainable as the same has been passed by not following the principle of natural justice. The impugned order is accordingly set aside and the matter is restored to the file of the Ld. CIT(A) for deciding the same afresh after affoding Printed from counselvise.com ITA No. 5482/Del/2025 MMC and H Pharmacies 4 opportunity of hearing and consideing the written arguments/ material submitted by the assessee/appellant. The appellant shall present its case before the Ld. CIT(A) within the period of 60 days from this order. The appeal of the assessee is disposed of and accordingly allowed. 6. In the result, the appeal of the assessee is allowed in above terms for statistical purposes. Order pronounced in open Court on 4th February, 2025 Sd/- Sd/- (AMITABH SHUKLA) (RAJ KUMAR CHAUHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:18/02/2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT/PCIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "