SHREE JAIN SWETAMBAR MURTIPUJAK SHREE SANGH,KHAMGAON V. .INCOME TAX OFFICER, WARD-2 (EXEMPTION), NAGPUR

ITA 13/NAG/2023

AI Insights

The case involves appeals by Shri Sachin Shankar Agnihotri against the orders of the Commissioner of Income Tax (Appeals), which enhanced the gross profit ratio from 8% as estimated by the Assessing Officer to 25% for the assessment years 2018-19 and 2019-20. The main legal issue was whether the CIT(A) was justified in enhancing the gross profit ratio without providing a rationale or issuing a notice to the assessee. The Tribunal found that the CIT(A) did not follow the mandatory procedure of issuing a notice before enhancing the income assessed by the Assessing Officer and that the initial estimation of 8% by the Assessing Officer was reasonable.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474270 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIPKUMAR SALUNKE
• Assessee Lawyers: ALFIA ROZIE
• Keywords: Set aside

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER SMC MATTER ITA no.156 & 157/Nag./2024 (Assessment Year : 2018–19 & 2019–20) Shri Sachin Shankar Agnihotri 0, Bapuji Wadi Ramnagar Wardha 442 001 PAN – AEUPA4206N ……………. Appellant v/s Asstt. Commissioner of Income Tax Central Circle–2(1), Nagpur ……………. Respondent Assessee by : Ms. Alfia Rozie Revenue by : Shri Sandipkumar Salunke Date of Hearing – 04/12/2024 Date of Order – 20/12/2024 O R D E R Captioned appeal by the assessee is against the impugned orders of even date 17/01/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2018–19 and 2019–20. 2. Since the issue raised by the assessee in both these appeals are common, except variation in figures, therefore, as a matter of convenience these appeals were heard together and are being disposed off by way of this consolidated order. The common ground raised by the assessee in both the years under consideration is as under:– 2 Shri Sachin Shankar Agnihotri “1. Whether on the facts and circumstances of the case, the learned Commissioner of Income Tax appeals was justified in enhancing the gross profit ratio from 8% as estimated by the Assessing Officer to 25% while passing the appellate order, without providing a rationale for doing so. 2. The appellant craves leave to add or alter any other grounds that may be taken at the time of hearing.” 3. I have heard both the sides, perused the records and gone through the order passed by the authorities below. I find that the Assessing Officer estimated the income of the assessee @ 8% and accordingly the assessment was completed. On appeal, the learned CIT(A) enhanced the estimation made by the Assessing Officer from 8% to 25% without issuing notice to the assessee. According to me, if at all the learned CIT(A) wanted to enhance the income assessed by the Assessing Officer, it was mandatory for the learned CIT(A) to issue notice to the assessee. In this case, no such notice was issued by the learned CIT(A) to the assessee. Apart from this, I also find that the estimation made by the Assessing Officer @ 8% is found to be reasonable and no enhancement was required by the learned CIT(A) further. Accordingly, the addition made by the Assessing Officer has to survive. In view of the above, I set aside the impugned order passed by the learned CIT(A) and delete the enhancement made by the learned CIT(A) by upholding order passed by the Assessing Officer for the assessment year 2018–19 and 2019–20. 4. In the result, appeals filed by the assessee for the assessment year 2018–19 and 2019–20 are partly allowed. Order pronounced in the open Court on 20/12/2024 NAGPUR, DATED: 20/12/2024 Sd/- V. DURGA RAO JUDICIAL MEMBER 3 Shri Sachin Shankar Agnihotri Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur "