C K COTSPIN PRIVATE LIMITED,BURHANPUR vs. THE ACIT / DCIT 4(1), INDORE, INDORE

Per Paresh M. Joshi, JM:

This is an Appeal filed by the Assessee under section 253 of

the income tax Act 1961,[ herein after referred to as the Act

for the sake of brevity] before this tribunal as & by way of a

second Appeal. The Assessee is aggrieved by the orderbearing

Number:-ITBA/NFAC/S/250/2025-26/1081098530(1) dated

24.09.2025 passed by the Ld. CIT(A) u/s 250 of the Act

which is hereinafter referred as the “Impugned order”. The

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 Relevant Assessment Year is 2020-21 and the corresponding

Previous Period is from 01/04/2019 to 31/03/2020.

2.1 That as & by way of an Assessment Order made u/s 143(3)

RWS 144B of the Act the total Income of the Assessee exigible to

Tax was computed & Assessed at Rs 21,32,756/-. The ROI filed

by the Assessee Company was at NIL. The Net Profit as per the

Profit & loss A/c was at Rs 7,10,161/-. An addition of Rs

1,35,40,933/- was made by virtue of Para 4.3 of the aforesaid

Order. The Ld AO in the aforesaid order has recorded “As

assessee has failed to produce any cogent evidence in support of

his submission more particularly the “highly fluctuating sale

price”, the Gross Profit ratio of A.Y.2019-20 is taken as basis for

adopting gross profit ratio for assessing income for this A.Y.2020-

of Rs.31,76,68,233/-. The gross profit works out to be

Rs.31,76,68,233/- x 1.40% = Rs.44,47,355/-. The assessee has

already shown loss of (-)90,93,578/-. Hence, the difference of Rs.

1,35,40,933/- is treated as his undisclosed income. Variation is

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 proposed to the tune of Rs.1,35,40,933/- under the head "Income

from Business and Profession". The brought forward loss of Rs

1,16,17,569/- was adjusted & Rs 26,33,525/- was then arrived

at .Further an amount of Rs 5,00,769/- was brough forward

unabsorbed depreciation & finally total Income exigible to Tax

was computed & Assessed at Rs 21,32,756/-. That the aforesaid

Assessment Order bears Number:- ITBA/AST/S/143(3)/2022-

23/1045740540(1) & that the same is dated 20.09.2022

which is hereinafter referred to as the “Impugned

Assessment Order”.

2.2 That the Assessee being aggrieved by the “Impugned

Assessment Order” prefers the first Appeal u/s 246A of the

Act before the Ld CIT(A) who by the “Impugned Order” has

rejected the first Appeal of the Assessee on the grounds &

the reasons stated therein the core grounds & the Reasons

for the Dismissal of the first Appeal was as under: -

“5.23 Therefore, considering the facts and circumstance of

the case, submission of the assessee, material available on

record, the findings of the assessing officer, grounds of

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 appeal contested by the assessee at serial number 1 and 2

are dismissed.

6 It is found that the assessee has contested grounds of

appeal at serial No. 4 stating that the Ld. A.O. erred in not

allowing set-off of Brought Forward Unabsorbed Depreciation

Loss of Rs. 5,00,769/- as duly shown in the Income Tax

Return without assigning any reason. The claim of Set off of

brought forward Unabsorbed Depreciation Loss of Rs.

5,00,769/- is legal and proper and the same requires to be

allowed to the assessee.

6.1 I have considered the facts and circumstances of the

case, submission of the assessee, material available on

record and findings of the assessing officer. It is found that

the impugned grounds of appeal contested by the assessee is

not arising out of the assessment order. Therefore,

considering the facts and circumstance of the case,

submission of the assessee the same is dismissed for

statistical purpose.

7 It is found that the assessee has contested grounds of

appeal at serial No. 3 witches with respect to the initiation of

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 penalty. The assessee has contested grounds of appeal at

serial No. 5 which is general in nature. Therefore,

considering the facts and circumstance of the case grounds

of appeal at serial No. 3 being consequential in nature and

grounds of appeal at serial No. 5 be general in nature are

dismissed for statistical purpose.

8 In the result, appeal of the assessee is dismissed.

2.3 That the Assessee being aggrieved by the “Impugned order”

has preferred the Instant Second Appeal before this Tribunal &

has raised following grounds of Appeal in the Form No:-36 which

are as under: -

“1 That on the facts and in the circumstances of the case and in

law, the Ld. CIT(A)-NFAC erred in dismissing the appeal filed by

the assessee by passing an ex-parte order without providing due

and proper opportunity of hearing to the appellant. The order so

passed by the Ld. CIT(A)-NFAC is therefore wrong and uncalled

for.

2 That on the facts and in the circumstances of the case and as

per law, the Ld. CIT(A)- NFAC erred in confirming the addition as

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 made by the Ld. AO of Rs. 1,35,40,933/- to the Total Income of

the assessee on account of low G P rate without properly

appreciating the facts of the case.

3 That on the facts and in the circumstances of the case and as

per law, the Ld. CIT(A)- NFAC erred in confirming the addition as

made by the Ld. AO of Rs. 1,35,40,933/- to the total income of

the assessee on account of low G P Rate without rejecting the

books of accounts of the appellant and moreso without

pinpointing any defects in the regular books of accounts

maintained by the assessee.

4 The assessee reserve its right to add, alter, modify OR amend

the grounds of appeal as and when required.

3 Record of Hearing

3.1 The hearing in the matter took place before this Tribunal on

09.07.2026 when the Ld. AR appearing for & on the behalf of the

Assessee inter-alia contended that the “Impugned Order” is bad

in law, illegal & not proper. It is passed in the violation of the

Principles of Natural Justice. It, therefore, deserves to be Set

Aside.

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 3.2 The Ld AR submitted that the “Impugned Order” is passed

in the violation of the Principles of Natural Justice in as much as

no hearing was afforded to the Assessee on 17.09.2025 despite

placing on record an adjournment request the hard copy of the

said request was tendered across bar during the course of the

hearing as the counsel engaged was pre occupied with the Return

filling activity on date of hearing on 17.09.2025 as due date for

filling the Individual Return was 16.09.2025 & due date for

Audit was approaching on 30.09.2025 & hence a month time

was sought by the Assessee Company. Per contra the Ld DR

appearing for & on the behalf of the Revenue submitted that he

leaves the Issue to be decided by this tribunal basis it’s wisdom

but however he insisted for a cost to be imposed by the Tribunal

so that deterent effect takes place not only on the Assessee but

on the other Assessee too as Non-appearance before the Income

Tax authorities are increasing more and more. The hearing was

over & closed.

4 Observations, Finding and Conclusions

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 4.1 We have to decide the legality, validity and proprietary of the

“Impugned Order” basis records of the case & the rival

submission canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case and after hearing and further

upon examining the rival contentions of the Ld AR and the Ld DR

canvassed before us are of the considered view that “Impugned

Order” is passed in the violation of the Principles of Natural

Justice.

4.4 We observe that in the “Impugned Order” the Ld CIT(A) has

recorded as under: -

“The appeal was instituted vide appeal no. NFAC/2019-

20/10193676 on 20.10.2022 against the order dated 20.09.2022

with ITBA/AST/S/143(3)/2022-23/1045740540(1) passed under

section 143(3) read with section 144B of the Income tax Act by

the NFAC for the assessment year 2020-21. The assessee has

submitted form No. 35 along with annexure there to on

20.10.2022. Upon receiving the form No. 35, Notices for hearing

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 were issued on 17/01/2023, 12/10/2023, 27/10/2023,

09/11/2023, 08/03/2024, 14/07/2025 and 11/09/2025 and

hearing scheduled on 17/09/2025. In response to the notices

issued the appellant has submitted failed to submit its

submission.”

Basis aforesaid we observe that the Notice(s) were issued to the

Assessee on more than 6 occasions but the Assessee remained

Non-Compliant to the various Notice(s). The Assessee replied only

once when the hearing was fixed for17.09.2025 & that too sought

adjournment as counsel was busy with Tax filling returns &

Audit work as relevant deadlines for same were approaching fast

in the quick successions on or after 17.09.2025 the date for

hearing/compliances. Be that as it may the Impugned order is an

exparte one as ultimately the grievance of the Assessee was that

“Impugned Order” was passed in the violation of the Principles of

Natural Justice. Per contra Ld DR has left the issue to the

wisdom of the bench. We observe & hold that Number of

opportunities as aforesaid were issued to the Assessee who is a

body corporate but save & except only on one occasion, they have

cared to reply. On the other occasions they were non-compliant &

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 did not even cared to file a reply or seek an adjournment. The

resources of the Dept has got wasted in the process under these

facts & circumstance, we set Aside the “Impugned Order” &

remand the case back to file of CIT(A). On denovo basis subject to

payment of cost of Rs 5000/- to be paid by the Assessee in favour

of “Prime Minister Relief Fund”. The necessary proof in this

regard to be shown to the Ld CIT(A) before he takes up the matter

for final adjudication afresh on denovo basis.

5 Order

5.1 In the Result “Impunged Order” is set aside as & by way

of remand back to the file of Ld CIT(A) on denovo basis with

directions as aforesaid.

5.2 The appeal of the Assessee is allowed for statistical purpose. Pronounced in open court on 30.07.2026.

Sd/- Sd/- (MANISH BORAD) (PARESH M. JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

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CK Cotspin Private Limited ITA No. 1013/Ind/2025 AY-2020-21 Indore िदनांक/Dated : 30/07/2026

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File

By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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