TFS CORPORATE SOLUTIONS LIMITED,NEW DELHI V. ITO,WARD-25(1), NEW DELHI

ITA 4078/DEL/2024

AI Insights

The case involves TFS Corporate Solutions Limited appealing against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, which pertained to the Assessment Year 2013-14. The primary contention was the ex parte nature of the order and the alleged violation of principles of natural justice, as the assessee claimed not to have been given a proper hearing. The assessee challenged the reassessment proceedings initiated by the AO, arguing that they were based on a notice under section 148 that was barred by limitation under section 149. Other grievances included the lack of material support for the Show Cause Notice under section 148A(b) and the validity of the notice under section 148 without a DIN, contrary to CBDT instructions. The Tribunal noted the significant addition made to the assessee's income and, despite the assessee's lack of participation in previous proceedings, decided to remand the case back to the AO for a fresh assessment, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47274 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANINDER KAUR
• Assessee Lawyers: RAKESH KUMAR KHIWANI
• Keywords: Invalid notice; Reassessment proceedings; Principle of natural justice
• Section: 148; 144; 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F : NEW DELHI BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MS MADHUMITA ROY, JUDICIAL MEMBER ITA No.4078/Del/2024 Assessment Year: 2013-14 TFS Corporate Solutions Limited, C/o Rakesh Khiwani & Co., Flat No. 1&2, 2nd Floor, East Patel Nagar, New Delhi. PAN: AACCT7069B Vs ITO, Ward-25(1), New Delhi. (Appellant) (Respondent) Assessee by : Shri Rakesh Kumar Khiwani, CA Revenue by : Dr. Maninder Kaur, Sr. DR Date of Hearing : 07.04.2025 Date of Pronouncement : 07.04.2025 ORDER PER ANNAPURNA GUPTA, AM: The present appeal has been filed by the Assessee against order passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as CIT(A)) under section 250 of the Income Tax Act 1961(hereinafter referred to as “Act”) pertaining to Assessment Year 2013-14. 2. The grounds raised are as under:- ITA No.4078/Del/2024 2 “1. That the order u/s 250 dated 24.07.2024 as passed by the Ld. CIT (Appeals) is bad in law as well as on facts. 2. In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Delhi has erred in passing the impugned order, exparte, dated 24.07.2024 under section 250 of the Act without properly considering the adjournment request and also without providing personal hearing to the appellant thereby grossly violating the principles of Natural Justice. 3. That the NFAC has grossly erred in upholding initiation of the reassessment proceedings by the AO based on notice u/s 148 for the AY 2013-14 barred by the limitation u/s 149, which ought to have been quashed and the consequent impugned assessment order and the notices also. 4. That the NFAC has grossly erred in upholding the Assessing Officer’s action of issuing Show Cause Notice the u/s 148A(b), not supported with any material in compliance of the H’ble Supreme Court order, and evidently only to make roving and fishing inquiries by accepting the DDI’s incomplete and vague report as sacrosanct and without application of mind to the report. The Notice u/s 148 based on such invalid notice, it is humbly prayed needs to be quashed and the consequent orders also. 5. That the NFAC has grossly erred in not quashing the notice u/s 148 issued by the AO by opting for the 5th limb, which is in conflict and contradiction to reasons given in the notice u/s 148A(b) and the order u/s 148A(d), besides the H’ble Apex Court has not provided any information to the AO for reopening. The Notice u/s 148, it is humbly prayed needs to be quashed and the consequent orders also. 6. That the NFAC has grossly erred in sustaining the addition made by the AO of all credits totalling to Rs. 5,96,95,599/-found in its Bank Account No. 308102000000204 as reported in the DDI’s report, which are a part of the revenue receipts and fully accounted for in the Audited Books of accounts. The addition made by the AO is prayed to be deleted. 7. That the NFAC erred in not denouncing the action of the AO of ignoring the Debits reported simultaneously in the same report, of Rs.5,83,50,566, against the deposits as above in Ground 6, thus committing a fallacy of NOT considering the entire document in totality and reducing the addition by the expenditure incurred and reflected in the P&L statements of the company and the fact that the AO has not considered and appreciated the response filed to notice u/s 148A(b). ITA No.4078/Del/2024 3 Grounds taken below have not been taken before the Ld. CIT(A) and have been taken here for the 1st time. These are legal grounds on the same facts. 8. That NFAC has not erred in not quashing the Notice u/s 148 dated 25.07.2022 issued by the AO without DIN in violation of the CBDT instructions 19/2019 dated 14.08.2019 is invalid and illegal and so also the consequent assessment order and the notices. 9. That the NFAC has grossly erred in not considering that the reopened assessment of AY 2014-15 on the basis of the same report DDI’s and identical proceedings with an exparte assessment at NIL by proper appreciation of the submissions made u/s 148A(b) passed by the Assessment unit vide order datedl8.05.2023. The rules consistency require similar treatment in both the assessment years. 10. The appellant craves leave to add, alter or amend all the above grounds of appeals at or during the course of hearing.” 3. Taking up ground No.2 raised before us first, the ld. counsel for the assessee contended that the assessee had remained completely unheard before the ld.CIT(A) and, therefore, pleaded that the matter be restored back to the CIT(A) for hearing afresh. 4. The ld. DR, though fairly conceded with the above fact, contended that in the absence of any plausible reason given by the assessee for not participating in appellate proceedings considering that the assessee’s appeal had been disposed of on merits also by the ld.CIT(A) dealing with all the grounds raised, there was no occasion for giving a second round to the assessee. 5. The ld. DR further pointed out that even before the AO the assessee did not participate and the order, therefore, had to be passed ex parte u/s 144 of the Act. On being confronted with the same, the ld. counsel for the assessee had no ITA No.4078/Del/2024 4 plausible reasons to give for not participating in both the assessment proceedings and in the first appellate proceedings. 6. We have noted that in the assessment framed against returned income of Rs.3,23,950/-, the income of the assessee has been assessed at Rs.6,00,19,551/- after making addition on account of cash found deposited in its bank account allegedly remaining unexplained. Noting the quantum addition made in the hands of the assessee and confirmed by the ld.CIT(A) without the assessee being heard at all though, admittedly, the fault lies entire at the door of the assessee, in the interest of justice, we consider it fit to give the assessee another opportunity of hearing and restore the matter back to the AO for adjudicating the issue afresh. The ld. counsel for the assessee has given us an undertaking that the assessee shall cooperate in the proceedings before the AO, on failure to comply with the same, the AO is at liberty to frame assessment to his best judgement. Further, noting that the Revenue will be constrained to hear the assessee again despite no fault of it, it is considered fit to impose a cost of Rs.5000/- on the assessee to be deposited to the Prime Minister’s Relief Fund. 7. In the result, the appeal of the assessee is allowed for statistical purposes only. Order pronounced in the open court on 07.04.2025. Sd/- Sd/- (MADHUMITA ROY) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07th April, 2025. ITA No.4078/Del/2024 5 dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "