ASHOK KHANDELWAL, DURG, DURG vs. ITO, WARD-1(1), BHILAI, BHILAI

At the very outset, it is noted that the appeal is time barred by 79 days. Explaining reasons for such delay, the Ld. Counsel for the assessee has submitted condonation petition a/w. affidavit dated 02.07.2026. The relevant contents of the said affidavit are extracted as follows:

The Department has not brought on record any evidence to suggest that any malafide or deliberate conduct on the part of the assessee for causing such delay nor could file any counter affidavit. Therefore, respectfully following the dictate of Higher Forum in the cases viz. (i) Collector, Land Acquisition Vs. Mst. Katiji & Ors, reported in 167 ITR 471 (SC); (ii) Vidya Shankar Jaiswal Vs. ITO, Ward-2, Ambikapur, Civil Appeal Nos……………../2025 [Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31.01.2025; (iii) Jagdish Prasad Singhania Vs. Additional Commissioner of Income Tax (TDS), Raipur (C.G.), TAX Case No.17/2025, dated 24.02.2025 and (iv) Inder Singh Vs. the State of Madhya Pradesh, Civil Appeal No…………/2025, Special Leave

At the time of hearing, the Ld. Counsel for the assessee submitted that he would be addressing Ground of appeal No.1 and if the said ground is answered in affirmative, in such scenario, rest other grounds shall be academic only.

Regarding Ground of appeal No.1, the contention in law as assailed by the Ld. Counsel for the assessee is that assessment order is bad in law as show cause notice given by the A.O before passing the order u/s. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) as per CBDT Instruction no.20/2015, dated 29.12.2015, and hence, the assessment order being bad in law, is liable to be quashed.

In this regard, it would be relevant to extract the CBDT Instruction No.20/2015, dated 29.12.2015 which reads as follows:

That as discernable from Para 4 of the aforesaid Instruction, the A.O whenever he proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain the position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the A.O shall issue an appropriate show cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. In other words, it is mandatory as per the said Instruction of the Board that the A.O shall pass draft assessment order wherein he will propose additions/variations and the same would be informed to the assessee. It is the contention of the Ld. Counsel that such draft assessment order proposing variation/additions to be made was never informed to the assessee. In this regard, the Ld. Counsel for the assessee relied on the decision of the Hon’ble High Court of Delhi in the case of CLH Gaseous Fuel Applications Pvt. Ltd. Vs. NFAC, New Delhi, W.P(C) 5272/2021, dated 25th April, 2023.

The Ld. Sr. DR could not place on record any evidence whether show cause notice proposing variation in the assessment was furnished to the assessee or not.

Considering the totality of the facts and circumstances and judicial dictate as afore-stated, I deem it appropriate from the perspective of principles of natural justice to restore the matter to the file of the A.O with a direction to verify whether guidelines of the CBDT Instruction (supra) were followed or not and accordingly, keeping in mind the dictate of the Hon’ble High Court of Delhi (supra), he shall adjudicate the case denovo as per law while complying with the principles of natural justice. The assessee shall also respond to the notices before the A.O and represent the matter on merits.

In the result, appeal of the assessee is allowed for statistical purposes.