SATYAM DIAGNOSTIC CENTRE,JODHPUR V. ASSESSMENT UNIT, NFAC / ITO, WARD-1(2), JODHPUR

ITA 631/JODH/2024

AI Insights

The case involves Satyam Diagnostic Centre appealing against the order of the National Faceless Appeal Centre (NFAC)/CIT(A), Delhi, which sustained the additions made by the AO under Section 147/148 read with Section 144 of the Income Tax Act, 1961, for the Assessment Year 2018-19. The primary grievances included the sustenance of proceedings under Sections 147/148, the addition of Rs 1,09,47,423 by estimating income at 30% of total receipts, and an additional Rs 1,83,053 on account of interest income. The Tribunal found that the assessments were made without proper consideration of the assessee's submissions and without substantiating the applicability of the net profit rate used, thus remanding the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705283 (ITAT-JODHPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Tin Box Company vs. CIT
• Laws Referred To: Section 147/148, Section 144
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH (Virtual) JODHPUR BEFORE SHRI RAJPAL YADAV, HON’BLE VICE PRESIDENT AND DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER ITA No. 631/Jodh/2024 Assessment Year 2018-19 Satyam Diagnostic Centre ITO, Ward-1(2), Ground Floor, Urology Department, Jodhpur. MDM Hospital, Jodhpur. PAN No. ABOFS2307P Assessee by Shri Amit Kothari, C.A.. Revenue by Shri Karni Dan, Addl. CIT-DR. Date of Hearing 01.05.2025. Date of Pronouncement o} - 04.2025. ORDER PER DR. MITHA LAL MEENA. A.M.: The captioned appeal has been filed by the assessee against the order of the Id. National Faceless Appeal Centre [NFAC/CIT(A)], Delhi dated 13.05.2024 in respect of Assessment Year: 2018-19 where the assessee has raised following grounds: 1. The Id. CIT(A) has erred in sustaining the proceedings under Section 147/148. The order so sustained u/s 147/148 r.w.s 144 is bad in law and bad on facts and contrary to the principles of natural Justice. 2. The Id. CIT (A) has erred in sustaining an addition of Rs 1,09,47,423/- by estimating income at 30% of the total receipts. The estimation so sustained is bad in law and bad on facts. ITA No. 631/Jodh/2024 Assessment Year 2018-19 3. The Id. CIT(A) has erred in sustaining an addition of Rs 1,83,053/- on account of Interest Income which is bad in law and bad on facts. 4. The appellant craves liberty to add, alter, amend or vary from the above the above grounds of appeal at or before the time of hearing. 2. The assessee challenged that the Id. CIT(A)’s order sustaining the additions made by the AO by estimating income at 30% of the total receipts and interest income in the assessment order u/s 147/148 r.w.s 144 is bad in law and bad on facts and contrary to the principles of natural Justice. 3. Heard both the sides, perused the material on record and the impugned order. Admittedly, the AO had made addition in the assessment order passed u/s 147/148 rw.s 144 of the Act, ex parte qua the assessee. The NFAC has endorsed the finding of the AO by observing that the Verification Unit has stated that Summons u/s.131 was issued to the assessee and was delivered on the assessee through speed post on 07-02-2023 but, there was no response from the assessee till date; that the assessee has not responded to any of the notices issued in this case except for the show cause notice issued u/s.144 for which, the assessee filed a copy of the partnership deed and Certificate for Registration of the firm through the DCIT, NFAC,Delhi. The Ld. NFAC has stated that the total cash credits in the assessee’s Axis Bank Account during the financial year 2017- 18 stood at Rs.3,64,91 ,412/-. Since the assessee has not filed its return of income, the sources for the same remain unexplained. However, keeping in view, ITA No. 631/Jodh/2024 Assessment Year 2018-19 the fact that the assessee is into diagnostic business, the cash deposits in its current account can reasonably be treated as its receipts and the income therefrom can be reasonably be estimated @ 30% which is the normal rate of profit in this line of business. 4. The Ld. NFAC has discussed the facts on pg 4,13 and 15 of the impugned order while endorsing the finding of the AO that assessee’s total receipts/turnover was more then one crore but books of account were not audited, so the AO estimated the NP @ 30% on these receipts deposited in bank account as against the assessee’s claim of loss as trending in this line of diagnostic centres. 5. The Ld. Counsel of the assessee argued that the assessment order so sustained u/s 147/148 r.w.s 144 is bad on facts and contrary to the principles of natural Justice as the Id. CIT (A) has sustained an addition of Rs 1,09,47,423/- made by the AO by way of estimating income at 30% of the total receipts, being made without any basis and appreciating the merits. He argued that the authorities below have not substantiated the applicability of NP rate either with reference to its past history or comparable case on parity and even without taking rebuttal of the assessee on record in view of natural justice. ITA No. 631/Jodh/2024 Assessment Year 2018-19 6. It is noted that while deciding the case ex-parte, the Ld. CIT(A) has not appreciated the facts of the case and arbitrary confirmed the assessment order passed exparte adopting NP rate @ 30% in arbitrary manner without addressing the relevant matter regarding appellants claim that the amount disputed may be treated turnover but the NP Rate ought to be applied in parity to a comparable case dealing in same activities in the neighbourhood or vicinity or jurisdiction. In our view, the authorities below have acted in violation of principles of natural justice 7. The Hon’ble Supreme Court of India in the case of Tin Box Company vs. CIT reported in 249 ITR 216 in which their Lordships of Supreme Court of India observed as under: “Assessment - Opportunity of being heard - Setting aside of assessment - Assessment order must be made after the assessee has been given reasonable opportunity of setting out his case - Same not done - Fact that the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is assessment order that counts — Assessment order set aside and matter remanded to assessing authority for fresh consideration.” ITA No. 631/Jodh/2024 Assessment Year 2018-19 8. Accordingly, we consider it deem fit to restore back the matter to the file of the Ld. AO to pass de novo assessment after considering the written submission and evidence filed by the assessee during the fresh proceedings after granting sufficient opportunity of being heard to the assessee. Needless, to mention that assessee shall co-operate in de novo assessment proceedings. 9. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced on.9..l.../...6.4-./2025 in the open Court. h Sd /— — Sd / sraieaifyaoay) (DBT HA LAL MEENA) VICE PRESIDENT ACCOUNTANT MEMBER Dated :9.1../8/2025 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By Oder Assistant Registrar, Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur. "