LI CONSULTING PRIVATE LIMITED,DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 15(2), NEW DELHI

PDF · subscribers
ITA 5424/DEL/2024Status: DisposedITAT Delhi16 July 2025AY 2017-18Bench: SHRI S RIFAUR RAHMAN (Accountant Member), SHRI ANUBHAV SHARMA (Judicial Member)5 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in dismissing the appeal for non-prosecution without a proper finding on merits. The Tribunal allowed the appeal for the first ground and restored it to the CIT(A) for fresh adjudication, granting the assessee an opportunity to be heard.

What were the facts?

The assessee, LI Consulting Pvt. Ltd., appealed against an order of the CIT(A) that dismissed their appeal for non-prosecution. The original assessment involved additions on account of cash deposits during demonetization and disallowances under Section 40A(2)(b).

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without adjudicating on the merits of the case, and whether the assessee was denied a proper opportunity of being heard.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 40A(2)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘E’: NEW DELHI

Before: SHRI S RIFAUR RAHMAN & SHRI ANUBHAV SHARMA

Hearing: 16.07.2025Pronounced: 16.07.2025

ORDER

PER ANUBHAV SHARMA, JM:

1.

This appeal has been preferred by the Assessee against the order dated 12.11.2024 of National Faceless Appeal Centre, Delhi, [hereinafter referred to as NFAC / ‘CIT(A)’] in Appeal No. CIT(A), Delhi-5/10496/2019-20 pertaining to Assessment Year 2017-18.

1.1 The assessee has raised the following grounds:

ITA No.-5424/Del/2024 LI Consulting Pvt. Ltd. “1. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in dismissing the appeal for non-prosecution. Hence, opportunity of being heard should be given to the appellant for the sake of natural justice.

2.

That on the facts and circumstances of the case, the Ld. CIT(A) erred in fact and law in confirming addition of cash deposit of Rs. 68,33,500/- during demonetization period as undisclosed income w/s 68 of the Act made by the assessing officer merely on the basis of doubt, suspicion, conjecture. surmises and applying the test of human probability by arbitrarily rejecting the explanation given by the appellant in respect of said cash deposit without bringing any cogent or substantive material on record.

3.

That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in confirming the action of assessing officer of levy of tax at a higher rate of 60% instead of 30% as per amended provisions of Section 115BBE of Act without considering the fact that the amendment made by second Amendment Act, 2016 to section 115BBE has no retrospective application.

4.

That on the facts and circumstances of the case, the Ld. CIT(A) erred in fact and law in confirming the action of assessing officer of making disallowance u/s 40A(2)(b) of the Act aggregating to Rs 9,96,000/- without affording the appellant an opportunity of being heard before making such addition which is gross violation of principle of natural justice, 5. That on the facts and circumstances of the case, the Ld. CIT(A) erred in fact and law in confirming the action of assessing officer of making disallowance u/s 40A(2)(b) of the Act of Rs.8.76,000 (Actually Rs 2,16,000) being rent paid to director for Lucknow office of the company and Rs.1,20,000 being car rent paid to relative of director aggregating to Rs.9,96,000 on the basis of doubt, suspicion, conjecture and surmises that appellant failed to prove business exigency by arbitrarily rejecting submission of the appellant without bringing any material evidence on record.

6.

That the grounds of appeal

are independent and without prejudice to each other.

7. The appellant craves leave to add, amend or alter any of the grounds of appeal,”

2. At the time of hearing, it was pointed out by the ld. AR that amongst other grounds on merits, the assessee has raised a ground ITA No.-5424/Del/2024 LI Consulting Pvt. Ltd. No.1 that the assessee was not given an opportunity of hearing. Although the ld. DR has defended the order of the ld.CIT(A) submitting that sufficient opportunities were given, it can be observed from the impugned order that the appeal has been dismissed by the ld. First Appellate Authority for mere lack of assistance from the appellant and for non-appearance and there is no finding sustaining the additions otherwise on merits, independent of the case period in the statement of facts and grounds raised. Thus, we are of the considered view that the assessee deserves an opportunity to contest on merits. The ground No.1 is allowed. The appeal is restored to the files of the CIT(A) for a fresh adjudication on merits and on law after giving the assessee an opportunity of hearing. The appeal is allowed for statistical purposes only.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →