RAIMA TOLL ROAD PRIVATE LIMITED,MUMBAI V. DCIT, CIRCLE 3(1)(1), , MUMBAI

ITA 3380/MUM/2025

AI Insights

The case involves Raima Toll Road Private Limited appealing against the order of the Commissioner of Income Tax (Appeals) which was passed ex-parte, allegedly without considering the detailed submissions made by the assessee. The primary issue in the appeal was the disallowance of a deduction claimed under section 80IA of the Income Tax Act, 1961, amounting to Rs 1,02,05,818, which was linked to operational net profits from a concession fee payable to NHAI. The Assessing Officer had disallowed this deduction on the grounds that the profits were derived from writing off assets, which did not qualify under the profit-linked deduction provisions of section 80IA. The Tribunal found that the CIT(A) had not considered the assessee's submissions and thus remitted the matter back for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713277 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Vimal Trading [2025] 172 taxmann.com 318 (Bombay), Commissioner of Income-tax, Goa v. Macbrout Engineering (P.) Ltd. [2014] 52 taxmann.com 219 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Rule of consistency; Principle of natural justice
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 3380/MUM/2025 Assessment Year: 2018-19 Raima Toll Road Private Limited, B1-406, Boomerang, Chandivali Farm Road, Sakinaka, Mumbai - 400072 (PAN : AAGCR1492L) Vs. Deputy Commissioner of Income Tax, Circle - 3(1)(1), Mumbai (Appellant) (Respondent) Present for: Assessee : Ms. Simran Dhawan, Advocate Revenue : Shri Annavaran Kosuri, Sr. AR Date of Hearing : 24.07.2025 Date of Pronouncement : 31.07.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi vide order no. ITBA/NFAC/S/250/2024-25/1075067439(1), dated 26.03.2025 passed against the assessment order by the National e-Assessment Centre, Delhi, u/s. 143(3) of the Income-tax Act (hereinafter referred to as the “Act”), dated 14.04.2021 for Assessment Year 2018-19. 2. Grounds taken by the assessee are reproduced as under: “1. On the facts and in the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) through National Faceless Printed from counselvise.com 2 ITA No.3380/MUM/2025 Raima Toll Road Pvt. Ltd. AY 2018-19 Appeal Centre (NFAC) erred in passing an ex-parte order u/s 250 of the Income Tax Act, 1961 on 26.03.2025 in utter ignorance of the written submissions and paperbook filed by the appellant company on 24.03.2025 vide e-filing acknowledgment number 911854661240325 in response to hearing notice dated 18.03.2025 rendering the appellate order bad-in-law, against the principles of natural justice, with preconceived mind, in utter disregard to the material placed on his record and therefore liable to be quashed as non-est. 2. On the facts and in the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in passing an ex-parte order u/s 250 of the Income Tax. Act, 1961 on 26.03.2025 without granting personal hearing through video conferencing as demanded in the written submissions filed on 24.03.2025 and therefore the order passed without granting a personal hearing to assessee was illegal and non-est in violation of Rule 12(3) of Faceless Appeal Scheme,2021 and also relying upon the decision of Hon'ble Jurisdictional Bombay High Court in the case of Vimal Trading [2025] 172 taxmann.com 318 (Bombay). 3. On the facts and in the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the disallowance of deduction of Rs 1,02,05,818/- claimed u/s 80IA of the Income Tax Act, 1961 while ignoring the fact that: (a) The deduction u/s 80-IA of the Act of Rs.1,02,05,818/- was claimed on account of the operational net profits earned by the appellant company during the year which was out of concession fee payable to NHAI of Rs. 3.84 Crs that was written back and recognized as revenue after termination of contract, which is directly and inextricably linked to the eligible business operations of the appellant company. Thus, the Assessing officer's assumption that during the year under consideration, no operational revenue was declared by the appellant company is factually misplaced. (b) The Assessing Officer had erred in holding that the deduction claimed by the appellant u/s 80IA is investment-linked deduction and not profit linked deduction based on an erroneous presentation that the profit totalling to Rs.1,02,05,818/- in respect of which the deduction was claimed, were on account of writing off of the assets of the eligible business, which is misplaced and factually incorrect as the writing off of Rs. 13.72 Cr reduced the book profits and that the same item was added back in computing the total income for the year under consideration making the entire exercise a revenue neutral and therefore, there remained no element relating to written off 'assets' in the final profits of business of Rs.1,02,05,818/- that was claimed as deduction u/s 80IA. (c) The books of accounts of the appellant company have been audited and no discrepancy have been pointed out by the auditor with regards to the amount of deduction claimed u/s 80-IA of the Act. The appellant's claim of deduction u/s 80-IA of the Act of amounting to Rs. 1,02,05,818/- is duly certified by the Chartered Accountant in Form 10CCB which clearly indicates, substantiates and supports the legitimate claim of deduction u/s 80IA of the Income Tax Act, 1961 by the appellant company. Printed from counselvise.com 3 ITA No.3380/MUM/2025 Raima Toll Road Pvt. Ltd. AY 2018-19 4. On the facts and in the circumstances of the appellant company's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not following the principle of consistency in considering the fact that the claim u/s 801A has been allowed to the appellant company consistently in the preceding years since A.Y. 2014-15 and accordingly the appellant company is eligible for claim of such deduction for the relevant assessment year also. Reliance is placed on the decision of the Hon'ble Jurisdictional Bombay High Court in the case of Commissioner of Income-tax, Goa v. Macbrout Engineering (P.) Ltd. [2014] 52 5. taxmann.com 219 (Bombay).” 3. By ground no. 2 assessee has contested that ld. CIT(A) has passed an ex-parte order without granting personal hearing through video conferencing as demanded by it. According to the assessee, principles of natural justice are violated. Assessee had claimed deduction u/s. 80IA of Rs. 1,02,05,818/- on account of operational net profits out of concession fee payable to NHAI of Rs. 3.84Cr which was returned back and recognized as revenue after termination of contract. According to the assessee, it is directly and inextricably linked to the eligible business operation of the assessee. Assumption of the ld. AO that no operational revenue was reported in the year under consideration is misplaced factually. However, according to the ld. AO, deduction claimed is on account of writing off of the assets of the eligible business and therefore not eligible for deduction u/s. 80IA. 4. Assessee had filed it return of income on 12.09.2018 reporting total income at Nil. Case of the assessee was selected for scrutiny assessment for the reason “deduction claimed for industrial undertaking u/s. 80IA”. Assessee was awarded toll collection rights along with operation and maintenance of Mudurai-Kanyakumari stretch from Km 0.00 to Km 243.17 of NH-7 in the state of Tamil Nadu on operate, maintain and transfer basis for a period of 9 years w.e.f 22.09.2013 by NHAI. The said contract was terminated by NHAI in the financial year 2017-18 relevant to A.Y. 2018-19. In the course of assessment proceeding ld. AO noted that no such deduction u/s. 80IA was claimed Printed from counselvise.com 4 ITA No.3380/MUM/2025 Raima Toll Road Pvt. Ltd. AY 2018-19 in the immediately preceding year as compared to the claim of deduction of Rs. 1,02,05,820/- u/s. 80IA in the year under consideration. Explanations were called for to which assessee furnished its reply. 4.1 Ld. AO after considering the reply of the assessee, noted that assessee has written off the value of asset acquired from it by NHAI due to termination of contract in the middle. While computing the total income, the said amount was disallowed and added back to the total income which gave rise to profit and was claimed as deduction u/s. 80IA. According to him, claim of deduction u/s. 80IA is dependent on fulfilment of certain conditions prescribed therein. In this respect, he noted that it cannot be said that assessee was carrying out any eligible business referred to in section 80IA(4), since there was no revenue from operation in the year under consideration. He further noted that as per section 80IA, profits derived from eligible business are available for deduction. He thus, disallowed the claim and completed the assessment. 5. Aggrieved assessee went in appeal before ld. CIT(A) who dismissed the same by noting that despite three notices for hearing, there was no response from the assessee and thus, it appears that assessee is not interested in filing any details in the course of appellate proceedings. Aggrieved, assessee is in appeal before the Tribunal. 6. Before us, ld. Counsel for the assessee referred to e-proceeding response acknowledgement placed in the paper book at page 133 to demonstrate that a detailed submission was made before the ld. CIT(A) on 24.03.2025 vide acknowledgment no. 911854661240325. In this respect, she pointed out that notice issue date was 18.03.2025 and the due date for submission was 24.03.2025. Assessee in remarks has Printed from counselvise.com 5 ITA No.3380/MUM/2025 Raima Toll Road Pvt. Ltd. AY 2018-19 mentioned that written submission was furnished with paper book explaining the entire case to substantiate the claim made by it. This submission has been altogether ignored by the ld. CIT(A) while adjudicating the grounds raised by the assessee. Ld. CIT(A) has passed the order on 26.03.2025 which is after the submission made by the assessee and therefore he ought to have considered the submission so made, duly place on record. 7. Nothing cogent was brought on record to controvert this factual position as demonstrated by ld. Counsel for the submission made by the assessee at the first appellate stage, though the appeal was dismissed ex-parte without considering the said submission. In the interest of justice and fair play, we find it appropriate to remit the matter back to the file of ld. CIT(A) for denovo meritorious adjudication of the grounds of appeal raised by the assessee at first appellate stage, by taking into consideration, the submissions made by the assessee and pass speaking order thereon. Needless to say that assessee be given reasonable opportunity of being heard to make any further submission, as deem fit. Accordingly, grounds raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 31July, 2025 Sd/- Sd/- (Sandeep Gosain) (Girish Agrawal) Judicial Member Accountant Member Printed from counselvise.com 6 ITA No.3380/MUM/2025 Raima Toll Road Pvt. Ltd. AY 2018-19 Dated: 31 July, 2025 Anandi.Nambi, Steno. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai Printed from counselvise.com "