TIRUPATI MINERALS AND INDUSTRIES,NAGPUR V. DCIT OR ACIT DEPUTY OR ASSISTANT COMMISSIONER OF INCOME TAX CENTER CIRCLE 2(1), NAGPUR

ITA 195/NAG/2024

AI Insights

The case involves Tirupati Minerals and Industries, which appealed against the order of the Commissioner of Income Tax (Appeals) concerning the assessment year 2016-17. The primary contention was the addition of Rs. 5,50,000 as unexplained expenditure under section 69C of the Income Tax Act, 1961, following a survey and subsequent re-opening of the assessee's case under section 147. The CIT(A) had confirmed this addition in an ex-parte order due to the assessee's failure to appear or provide necessary details despite multiple opportunities. The Tribunal, considering the principles of natural justice, decided to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24418 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Assessee Lawyers: SUREN DUGARKAR
• Keywords: Set aside; Opportunity of being heard; Unexplained expenditure; Principle of natural justice
• Section: 147; 144; 250; 69C; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER S.M.C. MATTER ITA no.195/Nag./2024 (Assessment Year : 2016–17) Tirupati Minerals and Industries 3rd Floor, NKY Towers, Ajni Square Nagpur 440 015 PAN – AAHFT0298C ……………. Appellant v/s Dy. Commissioner of Income Tax Central Circle–2(1), Nagpur ……………. Respondent Assessee by : Shri Suren Dugarkar Revenue by : Shri Abhay Y. Marathe Date of Hearing – 04/12/2024 Date of Order – 08/01/2025 O R D E R Captioned appeal by the assessee is against the impugned order dated 22/02/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2016–17. 2. The assessee has raised following grounds:– “1) The order passed by Hon'ble CIT (appeal) is illegal, invalid and bad in law. 2) The Income determined by Hon'ble CIT (appeal) at Rs.5,50,000/- is unjustified, unwarranted and excessive. 3) The Hon'ble CIT (Appeal) ought to have deleted sum of Rs.5,50,000/- being unexplained expenditure to the income of assessee. 2 Tirupati Minerals and Industries 4) The Hon'ble CIT (appeal) did not consider the submissions made by the assessee before due date against notice issued u/s 250 of the Income Tax Act, 1961 dated 06.02.2024. 5) Any other ground shall be prayed at the time of hearing.” 3. Facts in brief:– The assessee is a firm, has not filed its return of income for the assessment year under consideration, as the assessee was not having any business activity during the year. Survey action under section 133A of Income Tax Act, 1961 (“the Act”) was conducted at the business premises of M/s. Tirupati Developers, and certain documents related to the assessee were found and impounded. Subsequently, the case of the assessee was re–opened under section 147 of the Act. The order under section 147 r/w section 144 of the Act was passed on 24/03/2022, making an addition of ` 5,50,000, on account of unexplained expenditure and same is brought to tax under section 69C of the Act. 4. On appeal, the learned CIT(A) issued several statutory notices to the assessee but of no use. Due to lackadaisical approach of the assessee, the learned CIT(A) issued ex–parte order by confirming the addition made by the Assessing Officer. 5. When this appeal is taken up for hearing, the learned A.R. appearing for the assessee submitted that the learned CIT(A) passed an ex-parte order and prayed that one opportunity may be granted by restoring the matter to the file of the learned CIT(A) to enable the assessee to substantiate its case before the learned CIT(A). 3 Tirupati Minerals and Industries 2. On the other hand, the learned D.R. submitted that despite the learned CIT(A) provided sufficient opportunities to the assesse, however, the assessee did not appear before the learned CIT(A) and not furnished relevant details. He strongly supported the orders passed by the learned CIT(A). 3. I have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. I find that though the learned CIT(A) granted opportunities to the assessee to substantiate its case, ultimately, the order passed by him is an ex-parte order. Therefore, I am of the opinion that by following the principles of natural justice, one opportunity should be given to the assesse to substantiate the case before the learned CIT(A). In view of the above, the order passed by the learned CIT(A) is set aside and remit the matter to the file of the learned CIT(A) and direct him to adjudicate the matter afresh on merit and in accordance with law after providing reasonable opportunity of being heard to the assessee. It is also directed that the assessee should not seek adjournment without there being a justified reason. Accordingly, all the grounds raised by the assessee in this appeal are allowed for statistical purposes. 4. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 08/01/2025 NAGPUR, DATED: 08/01/2025 Sd/- V. DURGA RAO JUDICIAL MEMBER 4 Tirupati Minerals and Industries 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 "