DEVNANDAN BUILDCON,AHMEDABAD vs. NFAC, DELHI PRESENT JURIS ITO, WARD-5(3)(1), AHMEDABAD

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ITA 2062/AHD/2025Status: DisposedITAT Ahmedabad07 May 2026AY 2022-236 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, noting the assessee's failure to comply with the CIT(A) despite multiple opportunities, directed the CIT(A) to grant one more opportunity upon payment of a cost of Rs. 5,000. The CIT(A) is to decide the grounds on merits after allowing the assessee to present evidence.

What were the facts?

The assessee filed a return declaring Nil income. The Assessing Officer (AO) disallowed a significant increase in 'other payables' and added it to income, also treating cash deposits as unexplained. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal without a proper opportunity to the assessee, and whether the additions made by the AO were justified.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Biren Shah, AR
For Respondent: Shri R P Rastogi, CIT-DR
Hearing: 05.05.2026Pronounced: 07.05.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 04.092025 for the Assessment Year (A.Y.) 2022-23 in the proceeding u/s 144 r.w.s. 144B of the Income Tax Act.

2.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2022-23 on 06.12.2022 declaring Nil income. The case was selected for scrutiny under CASS for the reason that the assessee had large turn over but the books of accounts were not audited and also

ITA No.2062/Ahd/2025 Devnandan Buildcon Vs. NFAC Delhi, Present Juris. ITO, AY- 2022-23 2 to examine the high liabilities as compared to low income/receipts. The AO had noticed that there was increase in “other payables” by Rs.36,76,57,154/- during the current year, while there was decrease in sundry creditors. The AO was not satisfied with the explanation regarding increase in other payables of Rs. 36,76,57,154/- and, therefore, same was disallowed and added to income. Further, cash deposit of Rs. 71,21,000/- made in the bank account was also held as unexplained and held as unexplained money. The assessment was completed u/s. 144 r.w.s. 144B of the Act on 06.03.2024 at total income of Rs.37,47,77,154/-.

3.

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

4.

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

1.

In law and in the facts and circumstances of the appellant's case, the CIT(A) has erred considering the reassessment proceedings u/s 147 as valid The initiation of proceedings under Section 148 of the Act and the consequential reassessment order passed under Section 144 of the Act are bad in law, without jurisdiction, and deserve to be quashed. 1.2. In law and in the facts and circumstances of the Appellant's case, the CIT(A) has erred in dismissing the Appellant's appeal ignoring Assessee's request for further time The CIT(A) has failed to accord reasonable opportunity of being heard as mandated by the law which renders order in question bad in law and invalid.

ITA No.2062/Ahd/2025 Devnandan Buildcon Vs. NFAC Delhi, Present Juris. ITO, AY- 2022-23 3

1.3. In law and in the facts and circumstances of the case, the Ld CIT(A) has erred in dismissing the appeal of appellant without awarding opportunity of video hearing which was specifically requested by the appellant.

1.4. In law and in the facts and circumstances of the Appellant's case, given that the original assessment order was a Best Judgment Assessment under Section 144 of the Act, the Learned CIT(A) ought to have invoked the amended provisions of Section 250 of the Act. The Learned CIT(A) ought to have set aside the assessment proceedings back to the file of the Assessing Officer (AO) with a specific direction to provide the Appellant a proper opportunity to furnish all relevant details and evidence to substantiate its returned income of AY 2022- 23, instead of confirming the best judgment assessment summarily The Appellant fees denial of natural justice.

2.

In law and in the facts and circumstances of the appellant's case, the Ld CIT(A) has erred in upholding huge and exorbitant addition of Rs. 36,76,57,154/- The addition is bad in law, invalid and should be deleted.

2.2. In law and in the facts and circumstances of the Appellant's case the LD CIT(A)ought to have considered that alleged addition include Rs 35,20,03,902/- being booking amount received from members for Appellant's Real estate project "Devnandan Sankalp City Against the advance in question the Appellant has executed sale deeds and has transfer valid and legal title of housing units of Devnandan Sankalp City The revenue corresponding to the sale consideration was duly and correctly credited to Profit & Loss account and thereby offered to tax. Hence addition is bad in law and invalid.

2.3. In law and in the facts and circumstance of the Appellant's case, the Ld CIT(A) ought to have considered alleged addition include Rs. 1,44,93,252/- accounted as "Other payables" The amount standing as other payable was on account statutory dues ie TDS and GST payable on 31/03/2022 There is not justification to hold such statutory liability as non-genuine liability of the Appellant. Even otherwise such statutory dues were fully paid and hence the addition is erroneous and deserves to be deleted.

2.4. In law and in the facts and circumstances of the Appellant's case, the Ld CIT(A) ought to have appreciate that alleged addition include "Provision for Income Tax of Rs 11,60,000/- There is no legal or factual justification to treat this statutory appropriation towards Income Tax as a non-genuine liability or an addition to income.

3.

In law and in the facts and circumstances of the appellant's case, the Ld CIT(A) has erred in upholding addition of Rs. 71,20.000/- under section 69A of the Act

ITA No.2062/Ahd/2025 Devnandan Buildcon Vs. NFAC Delhi, Present Juris. ITO, AY- 2022-23 4

on account of cash deposited into Bank account. The Learned CIT(A) erred in upholding the addition merely on the procedural premise that the bank book and bank statements were not filed before the Assessing Officer (AO) The entire cash deposit was sourced from prior cash withdrawals made from the bank account itself, as evidenced by the available records. 4. In law and in the facts and circumstances of the appellant's case the Learned CIT(A) erred in denying the admission of additional evidences submitted by the Appellant, which is in violation of the provisions and spirit of Rule 46A of the Income Tax Rules, 1962. 5. In law and in the facts and circumstances of the Appellant's case, the Ld CIT(A) has erred in holding that the Appellant has not filed audited accounts and unaudited accounts casts doubt over authenticity and veracity of their content. The Appellant submits that considering the amended threshold limits. its turnover for the relevant year did not exceed the prescribed limit of Rs 10 Crores, and thus, the requirement for a tax audit was not applicable. 6. The appellant craves leave to add alter or amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 5. Shri Biren Shah, the Ld. AR of the assessee, submitted at the outset that no compliance could be made by the assessee before the Ld. CIT(A) and the grounds raised by the assessee were not adjudicated by him on merits. He, therefore, requested that the assessee may be allowed another opportunity by setting aside the matter to the file of Ld. CIT(A).

6.

Per Contra, Shri R P Rastogi, the Ld. CIT-DR, had no objection if the matter was set aside to Ld. CIT(A) for allowing another opportunity to the assesse.

7.

We have considered the rival submissions. It is found that the Ld. CIT(A) had allowed six opportunities but no compliance was made by the assessee, other than seeking adjournment on few occasions. The Ld. CIT(A) has given a finding that the assessee had sought time for collecting

ITA No.2062/Ahd/2025 Devnandan Buildcon Vs. NFAC Delhi, Present Juris. ITO, AY- 2022-23 5 the confirmations and documentary evidences to establish the genuineness of the liability in question. However, no evidences were brought on record and, therefore, the Ld. CIT(A) had confirmed the additions as made by the AO and dismissed the appeal of the assessee. The assessee has not given any explanation for non-compliance before the Ld. CIT(A). We, therefore, deem it proper to impose a cost of 5,000/- on the assessee which should be deposited to Prime Minister National Relief Fund within a period of two weeks from the date of receipt of this order. Subject to payment of cost, the Ld. CIT(A) is directed to allow one more opportunity to the assessee for making compliance and brining on record the confirmations and documentary evidences in support of the grounds as taken in first appeal. The Ld. CIT(A) will be free to call for remand report of the AO on the additional evidences filed before him and thereafter decide the grounds taken by the assessee on merits. The assessee is also directed to make compliance before the Ld. CIT(A) in the course of set aside appeal proceeding. In case the assessee fails to make compliance, the Ld. CIT(A) will have liberty to adjudicate the matter on merits on the basis of materials available on record.

8.

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

Order pronounced in the Court on 07/05/2026 at Ahmedabad.

Sd/- Sd/- (SAJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 07th May, 2026 (True Copy) Neelesh, Sr. PS

ITA No.2062/Ahd/2025 Devnandan Buildcon Vs. NFAC Delhi, Present Juris. ITO, AY- 2022-23 6

आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

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