MAMTA TREHAN,DELHI vs. ACIT CIRCLE 63(1), DELHI

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ITA 708/DEL/2025Status: DisposedITAT Delhi18 August 2025AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that it was an admitted fact that despite opportunities granted by the NFAC, the assessee did not file submissions before that authority, leading to the dismissal of the appeal for non-compliance. The assessee argued that the NFAC order was passed without being heard. The Tribunal, considering the totality of the facts and circumstances and in the interest of justice, decided to restore the issue to the file of the NFAC. A direction was given to grant one final opportunity to the assessee to substantively present its claim and for the NFAC to decide the issue based on facts and law. The assessee was also directed to appear before the NFAC and cooperate. The grounds raised by the assessee were allowed for statistical purposes. The specific findings on the merits of the additions were not made as the matter was remanded.

What were the facts?

The assessee, Mamta Trehan, engaged in the business of manufacturing, supplying, and installation of advertising products, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, dated 31.12.2024. This order pertained to the assessment year 2017-18 and arose from an assessment order dated 20.12.2019 passed under section 143(3) of the Income Tax Act, 1961. The NFAC had dismissed the assessee's appeal for non-compliance, despite the assessee having filed grounds of appeal. The assessee's business primarily dealt with major oil corporations, with declared sales of Rs. 15,52,72,416/- and erection and installation charges of Rs. 2,00,46,517/-. The assessee had initially declared a total income of Rs. 54,58,320/-. The case was selected for scrutiny through CASS.

What were the issues?

1. Whether the addition of Rs.24,61,535/-, representing 30% of Rs.82,05,117/- as disallowed expenses (payment made to transporter) under section 40A(ia) of the Income Tax Act, 1961, was justified, especially when TDS was made and evidence submitted? (Question of law and fact, concerning Section 40A(ia)) 2. Whether the addition of Rs.32,45,000/- deposited in banks during the demonetization period as income under section 69A of the Income Tax Act, 1961, was correct, when the cash was allegedly out of available cash in the books of account and tax was already charged under section 115BBE? (Question of law and fact, concerning Section 69A and Section 115BBE) Assessee's Contentions: - Regarding issue 1: TDS was made, and evidence was submitted. - Regarding issue 2: The cash deposited was out of cash available in the books of account, and tax was already charged under section 115BBE. - The NFAC order was passed without hearing the assessee. Revenue's Contentions: - Departmental authorities passed reasoned orders. - The assessee did not participate in the proceedings before the NFAC but submitted grounds of appeal.

Which sections of the Income-tax Act were involved?

Section 40A(ia),Section 69A,Section 115BBE,Section 143(3)

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: 18/08/2025Pronounced: 18/08/2025

Date of hearing: 18/08/2025 Date of Pronouncement: 18/08/2025 ORDER

PER SUDHIR KUMAR, JUDICIAL MEMBER:

1.

This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi/ Commissioner of Income Tax (Appeals) [hereinafter referred to as “CIT(A)”] vide order dated 31.12.2024 pertaining to A.Y. 2017-18 arising out the assessment order dated 20.12.2019 under section 143(3) of the Income Tax Act, 1961, (in short ‘the Act’).

2.

The assessee has raised following grounds of appeal:

1. “On the facts and in the circumstances of the case the learned CIT(Appeal) has erred in confirming the addition of Rs.24,61,535/- as disallowed expenses (payment made to transporter) being 30% of Rs.82,05,117/- u/s. 40a(ia) of IT Act, 1961. Whereas TDS was made evidence submitted.” 2. “On the facts and circumstances the learned CIT(A) has erred in confirming an addition of Rs.32,45,000/- deposited Banks during the demonetization period taking as income u/s. 69A of the IT Act 1961. Whereas the cash was deposited out of the cash available in the Books of A/c of the appellant and charged tax u/s. 115BBE of I.T Act. 1961.

3.

The assessee is an individual doing proprietory business under the name and style of M/s. Design Graphics, engaged in manufacturing, supplying and installation of advertising products. The firm deals in illuminated, signs, ACP Glow signs, LED signage, Road signs Retail Visual identity, display unit, High most signage and kiosk counter and mainly deals with Indian Oil Corporation Ltd. Hindustan Petrolium Corporation Ltd. and Bharat Petrolium Corporation Ltd. That the total sale declared by the assessee is Rs.15,52,72,416/-and errection and installation charges amounting to Rs.2,0046,517/- after excluding excise duty. The assessee has filed the return of income declaring total income of Rs. 54,58,320/-on 15-10- 2017. The case of the assessee was selected under scrutiny through CASS and notice was issued on 24-09-2018. The Assessing officer completed the assessment after making the addition on the various heads.

4. Aggrieved by the order of the AO, the assessee filed the appeal before Ld. NFAC/CIT(A) who vide order dated 31.12.2024 dismissed the appeal of the assessee by observing as under:

During the appellate proceedings, in spite of filing elaborate grounds of appeal and being provided with adequate opportunities of filing explanations and supporting documents and appellant preferred to remain silent by not availing the opportunities provided.

5. Being aggrieved the order of the Ld. NFAC the assessee filed the appeal before the Tribunal.Ld.AR of the assessee has submitted that without being heard to the assessee the impugned order was passed by the Ld. NFAC. 6.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 but submitted grounds of appeal before the Ld. NFAC.

6. We have heard the parties and perused the material available on record. It is an admitted fact that despite opportunities granted by Ld. NFAC the assessee did not file his submissions before the authority, for which the appeal was dismissed in non-compliance by the Ld. NFAC.

7. Since in the instant case the Ld. NFAC has dismissed the appeal in non-compliance 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. NFAC 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. NFAC 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 18 .08.2025.

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