TRANS METALITE INDIA LIMITED,NEW DELHI V. ACIT, CIRCLE 25(1), NEW DELHI

ITA 5228/DEL/2024

AI Insights

The case involves Trans Metalite India Limited, which appealed against the order of the NFAC dismissing their appeal for want of prosecution. The original assessment was reopened under Section 147 of the Income Tax Act, 1961, based on information that the assessee received unsecured loans from shell companies. The Assessing Officer made several additions to the income of the assessee, which were affirmed by the Commissioner of Income Tax (Appeals). The Tribunal found that the NFAC did not decide the appeal on merits and that the assessee was not given sufficient opportunity to be heard, leading to the restoration of the case to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471942 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARAKASH
• Assessee Lawyers: ANANYA KAPOOR
• Keywords: Business income; Opportunity of being heard; Unexplained cash credit; Principle of natural justice; TDS
• Section: 147; 148; 143(1); 69C

Judgement Text

"1 THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH C: DELHI BEFORESHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No.5228/Del/2024 Assessment Year: 2019-20 Trans Metalite India Limited, 4417/7, Ansari Road, Darya Ganj, New Delhi-110002 Vs. Assessment Unit, Income Tax Department, ACIT, Circle -25 (1) Delhi PAN No.:AAACT035T1N (Appellant) (Respondent) ORDER PERSUDHIR KUMAR, JM: The assesseepreferred the captioned appeal, challenging the order dated 17.09.2024 passed by the National Faceless Appeal Centre (in short “NFAC”) Delhi pertaining to Assessment year 2019-20 and Assesseeby Ms. Ananya Kapoor, Advocate Sh. Tarun Chanana, Advocate Department by Sh. Om Parakash,Sr. DR Date of hearing 25.02.2025 Date of pronouncement 12.03.2025 2 arises out of the order dated 27.03.2024passed under Section147 of the Income Tax Act, 1961 (“The Act for short”). 2. The assessee has raised the following ground of appeal: 1. That the assessment order dated 27.03.2024 passed under Section 147 r.w.s. 144B of the Income Tax Act, 1961 ('the Act') by the Assessing Officer for Assessment Year ('AY') 2019-20, and the additions/disallowances made therein are illegal, bad in law, without jurisdiction, and not in accordance with the provisions of the Act. 2. That in view of the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) vide order dated 17.09.2024 has erred in confirming the additions/disallowances made by the Assessing Officer. 3. That in view of the facts and circumstances of the case and in law, the Assessing Officer and the Commissioner of Income Tax (Appeals) have erred in not granting reasonable and sufficient opportunity to the Appellant to place on record the documents or evidence in support of its submissions and the same are in gross violation of principles of natural justice. 4. That the notice dated 23.03.2023 issued under Section 148 of the Act by the Jurisdictional Assessing Officer is illegal, bad in law, and without jurisdiction. 3 5. That the mandatory approval taken under Section 151 of the Act for issuing the notice dated 23.03.2023 under Section 148 of the Act is illegal, mechanical in nature, and without any application of mind. 6. That the notice under Section 148 of the Act could not have been issued by the in view of the faceless assessment scheme in light of Section 151A of the Act. 7. That the notice dated 02.03.2023 issued under Section 148A(b) of the Act and the order dated 23.03.2023 passed under Section 148A(d) of the Act are illegal, bad in law, without jurisdiction, and not in accordance with the provisions of the Act. 8. That the additions made by the Assessing Officer in the assessment order are unlawful and erroneous, as the Assessing Officer failed to issue a fresh notice under Section 148 of the Act before addressing other issues, which did not form part of the reasons recorded and notice issued under Section 148A(b) of the Act. 9. The Commissioner of Income Tax (Appeals) has erred in affirming the addition of Rs. 1,15,87,590/- made by the Assessing Officer under Section 68 of the Act, purportedly on account of unexplained credits. The addition 4 made is unjust, illegal, and arbitrary. Hence, the same is liable to be deleted. 10. The Commissioner of Income Tax (Appeals) has erred in affirming the addition of Rs. 2,54,51,086/- made by the Assessing Officer allegedly by adding the 5% of the difference in the total bank credits and turnover show. The addition made is unjust, illegal, and arbitrary. Hence, the same is liable to be deleted. 11. The Commissioner of Income Tax (Appeals) has erred in affirming the addition of Rs. 12,16,697/- made by the Assessing Officer under Section 69C of the Act, purportedly on account of interest payment on the unsecured loan. The addition made is unjust, illegal, and arbitrary. Hence, the same is liable to be deleted. 12. The Commissioner of Income Tax (Appeals) has erred in affirming the addition of Rs. 8,65,200/- made by the Assessing Officer allegedly as income from house property by considering the rental income to the tune of Rs. 12,36,000/- despite the fact that such income already forms part of the business income of the Appellant. 13. The Commissioner of Income Tax (Appeals) has erred in affirming the addition of Rs. 29,33,687/- made by the Assessing Officer under Section 5 40a(ia) of the Act allegedly on account of non-deduction of TDS on interest paid. The addition made is unjust, illegal, and arbitrary. Hence, the same is liable to be deleted. 14. The Commissioner of Income Tax (Appeals) has erred in affirming the addition of Rs. 11,90,209/- made by the Assessing Officer allegedly on account of capital gain. The addition made is unjust, illegal, and arbitrary. Hence, the same is liable to be deleted. 15. That the additions/disallowance made by the Assessing Officer are unjust, illegal, arbitrary, bad in law, highly excessive, and based on surmise conjecture. 16. That in the view of the facts and circumstances of the case, the documents, explanations filed by the Appellant, and the material available on record have not been properly considered and judicially interpreted by the Assessing Officer and the same has been wrongly ignored. 17. That in view of the facts and circumstances of the case, the Assessing Officer has erred in charging the interest under Sections 234A, 234B, and 234D of the Act. 6 18. That in view of the facts and circumstances of the case and in law, the Assessing Officer has erred in initiating the penalty proceedings under Sections 271AAC(1), 270A, and 272A(1) (d) of the Act. 19. The Assessee craves leave to add to, alter, amend, and/or withdraw an ground or grounds of appeal either before or during the course of hearing the appeal. 3. The brief facts of the case are that the assessee has filed its return of income for the A.Y. 2019-20 on 30-10-2019 declaring total income of Rs %6,74,546/-. On the verification of the information available on Insight Portal, it is gatheredby the investing wing that shri Ankit Bhageria received unsecured loans amounting to Rs 1,07,43,661/- from the two shell companies Satsai Finlease (P) Ltd and Savita Holding Pvt. Ltd.The case of the assessee was reopened after taking the necessary approval and order was passed under clause (d) of section 148A of the Act. After giving the sufficient opportunity of being heard to the assessee the A.O. has completed the assessment and made the following additions u/s 143(1) (a) of the Act: (i) Variation in respect of 68 of the Act Rs 11,58,7590/- 7 (ii) Variation in respect of business Income Rs 52,55,1840/- (iii) Variation In respect of 69C of the Act Rs 12,16,697/- (iv) Income From House Property Rs 8,65,200 (v) Capital gain Rs 11, 90,209 Total additions / Loss determined Rs 7,35,56,006/- 4. Aggrieved the order of the A.O. the assessee has filed the appeal before the NFAC who relying the various decisions, vide his order dated 17-09-2024 dismissed the appeal for want of prosecution because the assessee did not appear before the Ld. NFAC. Aggrieved with the said order of the Ld. NFAC, the assessee is in appeal before the Tribunal. 5. Ld. A.R of the assessee submitted that Ld. N FAC has dismissed the appeal for want of prosecution. She also submitted that A.O has provided the only one day time for VC. 6. Learned Authorized Representative for Department of Revenue supported the impugned orders of the Departmental Authorities. 7. We have heard the parties and gone through the material available on record. 8 8. It is an admitted fact that despite opportunities granted by Ld. NFAC the assessee did not appear before the appellate authority. However, the Ld. NFAC in the instant case has not decided the appeal on merits which he was supposed to as per the provisions of Section 250(6) of the Act which reds as under: The order of the Deputy Commissioner (Appeals ) or as the case may be the commissioner (Appeals) disposing of the appeals shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. 9. Since in the present case the Ld. NFAC has dismissed the appeal for want of prosecution and has not decided the appeal on merits, and the A.O has not provided the sufficient opportunity for being heard, therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of the A.O, with a direction to grant one final opportunity to the assessee to substantiate its claim. The assessee is also directed to appear before the A.O and substantiate its case without seeking any adjournment under any pretext, failing which the A.O is at liberty to pass appropriated 9 order as per law. The grounds raised by the assessee are accordingly allowed for statistical purposes. 10. In the result, the appeal of the assessee allowed for statistical purposes. Order pronounced in the open court on 12/03/2025. Sd/- Sd/- (SHAMIM YAHYA) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIALMEMBER Dated: 12 March,2025 “Neha, Sr. PS” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Delhi "