TARA CHAND AND BROS.,MANDI vs. ITO, MANDI

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ITA 1181/CHANDI/2024Status: DisposedITAT Chandigarh06 July 2026AY 2018-194 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the impugned order and restored the matter to the Assessing Officer for fresh adjudication. This was done to provide the assessee with an adequate opportunity of being heard, adhering to the principles of natural justice, despite the assessee's failure to diligently prosecute its case.

What were the facts?

The assessee's appeal was dismissed by the CIT(A), confirming an addition of Rs. 1,41,09,910/- under Section 69A. The assessee contended that the deposits were declared under the proprietorship PAN, not the partnership PAN, and that the partnership was dissolved prior to the deposits. The proceedings before the lower authorities were ex parte.

What were the issues?

Whether the ex parte assessment and appellate orders were justified, and whether the assessee was denied a reasonable opportunity of hearing, violating principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL

For Appellant: Ms. Isha Sharma, Advocate
For Respondent: Dr. Ranjit Kaur, Addl. CIT, Sr.DR
Hearing: 30.06.2026Pronounced: 06.07.2026

आयकर अपील�य अ�धकरण,च�डीगढ़ �यायपीठ, च�डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 1181/CHD/2024 �नधा�रण वष� / Assessment Year: 2018-19 Tara Chand & Bros., The ITO, VPO Dhanotu,Dhanotu, Vs Mandi. Distt. – Mandi (HP). �थायी लेखा सं./PAN NO: AADFT8149C अपीलाथ�/Appellant ��यथ�/Respondent Assessee by : Ms. Isha Sharma, Advocate Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr.DR Date of Hearing : 30.06.2026 Date of Pronouncement : 06.07.2026

HYBRID HEARING O R D E R PER LALIET KUMAR, JM

This is an appeal filed by the assessee feeling aggrieved by the order passed by the ld. Commissioner of Income Tax (Appeals) NFAC [in short ‘the CIT (A)’] dated 25.11.2024 passed for assessment year 2018-19 on the following grounds : 1. That the impugned order dated 25/11/2024 passed by learned Commissioner of Income Tax (Appeals) as well as the Assessment Order dated 22/02/2023 are bad in law and facts. 2. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) is not justified in dismissing the appeal thereby confirming the addition made by the Ld. A.O. amounting to

ITA No.1181/CHD/2024 A.Y.2018-19 2 Rs. 1,41,09,910/- u/s 69A of the Act. The Ld. Authorities below failed to appreciate the fact that the said deposits has been duly declared under the PAN of proprietorship concern, whereas the PAN of the partnership was wrongly linked to the bank account of the appellant. It is pertinent to mention here that the link of PAN with the bank account is a matter of record and the same can be verified from the bank. 3. That the Ld. Authorities below has wrongly treated the deposits in the bank account of the appellant as income of the partnership concern, whereas the partnership was already dissolved by way of dissolution deed dated 31/12/2016. Ld. Authorities below failed to appreciate the fact that the said amount of Rs. 1,41,09,910/- has already been suffered tax in the hands of the proprietor of the concern and the same cannot be made liable for taxation again, which will amount to double taxation prohibited under law. 4. That in the assessment order passed on best judgement basis u/s 147/144/144B of the Act and also in the impugned order dated 25/11/2024 passed by the appellate authority on ex-parte basis, the appellant didn't get an opportunity of being heard, which is against the principle of natural justice. Moreover, no prejudice shall be caused to any one if an opportunity of being heard is provided to the appellant. 5. That the appellant reserves its right to add or amend grounds of appeal during the course of appellate proceedings.

2.

At the outset, both the learned counsel for the assessee and the learned Departmental Representative fairly submitted that the proceedings before the authorities below were concluded ex parte. They, therefore, submitted that the matter may be restored to the file of the Assessing Officer for adjudication afresh after providing adequate opportunity to the assessee.

3.

Having considered the rival submissions and the material on record, we find that the assessment and the appellate proceedings culminated in ex parte orders. Although the assessee failed to

ITA No.1181/CHD/2024 A.Y.2018-19 3

diligently prosecute its case before the lower authorities, thereby resulting in avoidable litigation and the wastage of judicial as well as departmental time, the principles of natural justice require that a reasonable opportunity of hearing be afforded before an adverse order is sustained. Therefore, in the interest of substantial justice, we deem it appropriate to set aside the impugned order of the learned CIT(A) and restore the matter to the file of the Assessing Officer for passing a fresh order in accordance with law after affording adequate opportunity of hearing to the assessee.

4.

However, while granting this indulgence, we consider it appropriate to impose costs of Rs.5,000/- upon the assessee for its non-cooperative conduct before the authorities below. The said amount shall be deposited by the assessee with the PGI Poor Patients Welfare Fund, PGIMER, Chandigarh, within 30 days from the date of receipt of this order. The proof of such deposit shall be furnished before the Assessing Officer at the commencement of the remand proceedings. Subject to the aforesaid condition, the Assessing Officer shall decide the matter afresh in accordance with law after providing reasonable opportunity of hearing. The

ITA No.1181/CHD/2024 A.Y.2018-19 4

assessee is also directed to extend full cooperation and furnish

all documentary evidences and explanations as may be called for

by the Assessing Officer. Since the matter is being restored, we

refrain from expressing any opinion on the merits of the additions

or the legal grounds raised in the appeal, and leave all such issues

open for adjudication afresh.

5.

In the result, the appeal filed by the assessee is allowed for

statistical purposes.

Order pronounced on 06.07.2026.

Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

सहायक पंजीकार/ Assistant Registrar

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