SANATAN WAREHOUSE,BHOPAL V. COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI

ITA 745/IND/2024

AI Insights

The case involves Sanatan Warehouse, a partnership firm, which filed an appeal against the order of the Commissioner of Income-Tax (Appeals) - NFAC, Delhi, treating their return for the Assessment Year 2022-23 as invalid under Section 139(9) of the Income-tax Act, 1961. The assessee argued that the return was complete and accurate, containing all necessary details of income sources, and that any alleged defects were rectified within the stipulated timeframe. The Income Tax Appellate Tribunal (ITAT) Indore Bench, after reviewing the submissions and returns, decided to restore the matter to the JAO for a fresh examination, suggesting that the JAO should carefully and judiciously re-evaluate the returns and pass an appropriate order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708364 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2022-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: FORASSESSEEBRIEFEDTHEFACTSOFCASE.THEASSESSEEISA; FORASSESSEECARRIEDUSTOBOTHOFRETURNSFILEDBYASSESSEE; ONE; FORREVENUE; FORASSESSEEAGREEDTOTHESUGGESTIONMADE; SHRIASHISHPORWAL
• Assessee Lawyers: SHRIANILKHABYA
• Keywords: Business income; Opportunity of being heard; Source of fund
• Section: 139

Judgement Text

"Page 1 of 5 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.745/Ind/2024 Assessment Year:2022-23 Sanatan Warehouse, 162, Modi Heights, Zone-II, MP Nagar, Bhopal बनाम/ Vs. CIT(A) Bhopal (Assessee/Appellant) (Revenue/Respondent) PAN: AEGFS0245D Assessee by Shri Anil Khabya, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 15.07.2025 Date of Pronouncement 16.07.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first-appeal dated 19.08.2024 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] u/s 250 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2022-23, the assessee has filed this appeal on following grounds: “1. The order passed by the Learned Assessing Officer/CPC & CIT (Appeal) is bad in law, arbitrary and is not enforceable under the law. 2. That the Learned Commissioner of Income Tax (Appeals) erred in treating the return of income filed by the appellant as invalid under Section 139(9) of the Income-tax Act, 1961, without duly considering all defects, identified by the department, were fully rectified by the appellant within the stipulated timeframe. Sanatan Warehouse ITA No. 745/Ind/2024 – AY 2022-23 Page 2 of 5 3. That the Learned CIT(A) further erred in holding that no valid appeal could be filed in this regard, overlooking the appellant's right to challenge the wrongful treatment of the return as invalid. This has deprived the appellant of the opportunity to be heard and to present the necessary facts to substantiate the validity of the return. 4. That the return of income filed by the appellant contains complete and accurate details of all sources of income, including, business income, and other relevant heads of income as required under the Income-tax Act. The return has been thoroughly reviewed by the appellant, and all income details have been properly disclosed and documented. 5. That the Learned Assessing Officer/CPC and subsequently the CIT(A), failed to appreciate that the appellant has acted in good faith and in compliance with all procedural requirements under the Income- tax Act, 1961. The reasons cited by CIT (Appeal) for treating the return as invalid are without merit, arbitrary, and unjustified. 6.That the Learned CIT(A) and Assessing Officer/CPC did not consider the specific explanations and clarifications provided by the appellant during the course of proceedings, leading to an incorrect conclusion regarding the alleged defect in the return. 7. That the appellant respectfully submits that the income details furnished in the return of income are complete, accurate, and have been reviewed before submission. The alleged defect, if any, is either non-existent or has already been rectified in accordance with the provisions of Section 139(9) of the Income-tax Act. 8. That the appellant prays for appropriate relief by setting aside the impugned order treating the return as invalid, and requests the Tribunal to direct the Learned Assessing Officer/CPC to accept the return as valid and process the same under the applicable provisions of the law.” 2. We have heard learned Representatives of both sides and perused the case record carefully. 3. Ld. AR for assessee briefed the facts of case. The assessee is a partnership firm. For AY 2022-23 under consideration, the assessee filed return of income u/s 139 on 22.07.2022 (copy of return at Pages 1-75 of Sanatan Warehouse ITA No. 745/Ind/2024 – AY 2022-23 Page 3 of 5 Paper-Book). The CPC, Bengaluru [“AO”] issued notice dated 14.12.2022 u/s 139(9) intimating a defect “No ‘Income details’ or ‘Tax computation’ are provided in ITR but details regarding ‘Taxes Paid’ have been provided” and requited the assessee to submit response by 29.12.2022 (copy of notice at Page 154 of Paper-Book). On verification of return, although the assessee found that those details were provided in the return and there was no defect, yet the assessee complied to the notice issued by AO and therefore filed another return on 20.12.2022 repeating the very same figures (copy of return at Pages 76-149 of Paper-Book). However, the AO declared assessee’s return as ‘invalid’. Aggrieved, the assessee carried matter in first-appeal but did not get any solution. 4. Ld. AR for assessee carried us to both of returns filed by assessee, one at Pages 1-75 of Paper-Book and other at Pages 76-149 of Paper-Book, and demonstrated that the assessee has given figures of Balance-Sheet, P&L A/c, Income derived under House Property head, Loss derived under Business head, Computation of Income, Computation of Tax liability at all designated places in both of the returns and there is no defect as alleged by AO. Ld. AR submitted that there is no mistake or defect in the return and yet the AO has declared assessee’s return as invalid. Therefore, the assessee had no option except to approach CIT(A) and thereafter before ITAT. Ld. AR submitted that in the situation, the bench may provide appropriate solution. Sanatan Warehouse ITA No. 745/Ind/2024 – AY 2022-23 Page 4 of 5 5. The prima facie perusal of returns filed by assessee support the stand taken by assessee. Therefore, after deliberations, Ld. DR for revenue suggested that the most appropriate solution in present case would be to restore matter at the level of Jurisdictional Assessing Officer [“JAO”] with directions as thought fit. Ld. AR for assessee agreed to the suggestion made by Ld. DR. Taking into account submissions of learned Representatives, we restore this matter to the file of JAO for reconsideration afresh. We expect the JAO to examine the returns filed by assessee carefully and judiciously and pass a needful order in accordance with law. We also direct the assessee to ensure participation in the hearings as may be fixed by JAO and supply the necessary documents and information as required. 6. Resultantly, this appeal is allowed for statistical purpose. Order pronounced in open court on 16/07/2025 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 16/07/2025 Patel/Sr. PS Sanatan Warehouse ITA No. 745/Ind/2024 – AY 2022-23 Page 5 of 5 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "