SEQUEL BUILDCON PVT LTD,KARKARDOOMA COMMUNITY CENTRE vs. DCIT, CENTRAL CIRCLE-, NEW DELHI

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ITA 1409/DEL/2025Status: DisposedITAT Delhi21 August 2025AY 2022-235 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that it is an admitted fact that despite opportunities granted by the CIT(A), the assessee did not appear before the authority, leading the CIT(A) to decide the appeal without the assessee's evidence. However, the Tribunal found that the CIT(A) dismissed the appeal in non-compliance, whereas the appeal should ideally be decided on merits as per law. Considering the totality of the facts and circumstances and in the interest of justice, the Tribunal deemed it proper to restore the issue to the file of the CIT(A). The CIT(A) is directed to grant one final opportunity to the assessee to substantiate its claim and decide the issue based on facts and law. The assessee is also directed to appear before the CIT(A) and cooperate in the proceedings. The grounds raised by the assessee are allowed for statistical purposes.

What were the facts?

The assessee, Sequel Buildcon Private Limited, is in appeal against the order of the Commissioner of Income Tax (Appeals)-24, New Delhi, dated 03.01.2025, which upheld the assessment order dated 23.03.2024 passed by the DCIT Central Circle, New Delhi, under Section 143(3) of the Income-tax Act, 1961. The assessment year in question is 2022-23. The assessee had declared a total loss of Rs. 19,28,754/-. The Assessing Officer made an addition of Rs. 1,65,01,524/- under Section 68 of the Act. The assessee's appeal before the CIT(A) was dismissed for non-compliance. The assessee's grounds of appeal include challenges to the assessment order, violation of natural justice by the CIT(A), and the addition made under Section 68.

What were the issues?

1. Whether the action of the Assessing Officer in concluding assessment proceedings under Section 143(3) at an assessed income of Rs. 1,65,01,524/- is valid on facts and law? (Mixed question of law and fact) 2. Whether the CIT(A) violated the principles of natural justice by not providing a reasonable opportunity of being heard to the assessee? (Question of law) 3. Whether the disallowance of Rs. 1,65,01,524/- under Section 68 is justified, especially considering the company was under Corporate Insolvency Resolution Process (CIRP) from 16.06.2023 and documents were available with the IRP? (Mixed question of law and fact) Assessee's Contentions: - The CIT(A) passed an ex-parte order without providing a reasonable opportunity of being heard, violating natural justice. - The company was under CIRP from 16.06.2023, and all documents were available with the IRP. - The CIT(A) should have issued notice directly to the IRP to obtain documents. - The quantum of addition under Section 68 is disputed. Revenue's Contentions: - Departmental authorities have passed reasoned orders. - The assessee did not participate in the proceedings before the CIT(A).

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68,Section 115BBE,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C”, DELHI

Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL

Hearing: 21/08/2025Pronounced: 21/08/2025

Date of hearing: 21/08/2025 Date of Pronouncement: 21/08/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-24 New Delhi [hereinafter referred to as “CIT(A)”] vide order dated 03.01.2025 pertaining to A.Y. 2022-23 arising out the assessment order dated 23.03.2024 u/s.143(3) of the Income-tax Act, 1961, (in short ‘the Act’).

2.

The assessee has raised the following grounds in appeal:-

1. Because the action for intimation contribution and conclusion of assessment proceedings u/s 143(3) at an assessed income of Rs. 1,65,01,524/- is being challenged on facts and law.

2. Because the action of CIT(A)-2, New Delhi is being challenged on facts and law for not providing reasonable opportunity of being heard. The assessment order being passed is in violation of the principle of natural justice and without giving adequate time and opportunity to the appellant to the appellant to present the case.

3. Because the action is being challenged on facts and law for making disallowance u/s 68 amounting Rs. 1,65,01,524/- whereas per assessee company came under CIRP from 16-06-2023 and all documents are available with the IRP.

4. Because the action is under challenge on facts and law for an addition of Rs.1,65,01,524/- by invoking the provisions of section 68 as unexplained cash credit. Even alternatively the quantum of addition is disputed.

5. Because the action is being challenged on facts and law for making addition of Rs.1,65,01,524/- u/s 68 whereas per assessee. Ld. CIT(A) should have issued notice directly to the IRP to get the documents from IRP.

6. For, any consequential relief and /or legal claim arising out of this appeal and for ant addition deletion amendment and modification in the grounds of appeal before the disposal of the same in the interest of substantial justice to the assessee.

3. The brief facts of the case are that the assessee filed its return of income u/s 139(1) of the Act on 20-12-2022 declaring total loss of Rs. 19,28,754/-The company is engaged in the business of real estate activities. The case of the assessee was selected for complete scrutiny through Computer Assisted Scrutiny Selection. Accordingly, notice u/s 143(2) and u/s 142(1) of the Act, were issued with questionnaire. The assessee filed their submission but not reply the show cause notice. The Assessing officer completed the assessment after making the addition u/s 68 of the Act.

4. Aggrieved by the order of the AO, the assessee filed the appeal before the Ld. CIT(A), the Ld. CIT(A) has dismissed the appeal of the assessee by observing as under :

“During the course of the appellate proceedings, the appellant did not provide any argument or documentary evidence in support of its ground of appeal. In the absence of any argument/evidence from the appellant during the course of appellate proceedings, there is no justification to interfere with the order of the Assessing Officer. Thus, in my considered opinion the Assessing Officer has rightly made addition of Rs. 1,65,01,524/- on account of unexplained cash credit u/s 68 read with Section 115BBE of the I.T. Act, 1961 and I do not find any reason to interfere with the order of the Assessing Officer. Accordingly, the plea of the appellant is rejected and addition made by the Assessing Officer is hereby confirmed. Accordingly, Ground N0s 1 to 7 of appeal are dismissed.”

5.

The Ld. AR of the assessee submitted that the exparte order was passed by the Ld. CIT(A). Learned authorized representative for Department of Revenue submitted that departmental authorities have passed reasoned orders. He also submitted that the assessee has not taken part in the proceedings before the Ld. CIT(A).

6.

We have heard the parties and perused the material available on record. It is an admitted fact that despite opportunities granted by Ld. CIT(A), the assessee did not appear before the authority, for which the Ld.CIT(A) decide the appeal without the evidence of the assessee.

7.

Since in the instant case the Ld. CIT(A) decided the appeal without any argument/evidence of the assessee. The Ld. CIT(A), has dismissed the appeal in non-compliance while the appeal should be decided on merit as per law. 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 Ld. CIT(A) with a direction to grant one final opportunity to the assessee to substantive its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Ld. CIT(A) and co-operate in the proceedings. The grounds raised by the assessee are accordingly allowed for statistical purposes.

8.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 21.08.2025.

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