COVENTRY PROPERTIES PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER WARD 3(1)(3), MUMBAI, MUMBAI

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ITA 4512/MUM/2026Status: DisposedITAT Mumbai19 June 2026AY 2018-197 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that an appeal should ordinarily be decided after affording a reasonable and effective opportunity of hearing. In this case, the assessee was deprived of such an opportunity.

What were the facts?

The assessee's appeal was dismissed ex-parte by the CIT(A) without granting an effective opportunity of hearing. The assessee had sought an adjournment for a final hearing, which was not explicitly disposed of before the CIT(A) passed the order.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without properly disposing of the assessee's adjournment request and thereby denying an effective opportunity of hearing.

Which sections of the Income-tax Act were involved?

Section 250,Section 147,Section 143(3),Section 148A,Section 148,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH MUMBAI

For Appellant: Shri Tejas Chandarana, Ld. AR
Hearing: 17.06.2026Pronounced: 19.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 4512/Mum/2026 (Assessment Year: 2018-19) Coventry Properties ITO Ward 3(1)(3) Pvt. Ltd. Room No. 666, 6th 41/44, SP Centre, Vs. Floor Aayakar Bhavan, Minoo Desai Marg, M. K. Road, Mumbai – Colaba, Mumbai- 400 020 400 005 PAN/GIR No. AADCC1984D (Applicant) (Respondent) Assessee by Shri Tejas Chandarana, Ld. AR Revenue by Shree Kumar C, Ld. DR Date of Hearing 17.06.2026 Date of Pronouncement 19.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal filed by the assessee is directed against the order dated 20.02.2026 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the CIT(A)”], under section 250 of the

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Income-tax Act, 1961 [hereinafter referred to as “the Act”] for the Assessment Year 2018-19.

2.

The assessee has raised the following grounds of appeal:

1.

On facts and circumstances of the case, the learned CIT(A) has erred in law and on facts in passing the ex-parte order and thereby confirming the order passed by the National Faceless Assessment Centre. The appellant has not received proper opportunity of hearing as the CIT(A) did not grant the adjournment sought by the appellant against the notices received by the appellant. 2. On facts and circumstances of the case, the learned CIT(A) has erred in law and on facts in passing the impugned order and thereby confirming the additions made in the assessment order passed under section 147 r.w.s. 143(3) of the Income-tax Act, 1961 ("the Act") by the Learned Assessing Officer, which is bad in law and liable to be quashed. 3. On facts and circumstances of the case, the learned CIT(A) has erred in law and on facts in confirming the addition of INR 75,00,000 thereby reducing the WIP by INR 75,00,000. 3. Briefly stated, the facts of the case are that the assessee filed its return of income for Assessment Year 2018-19 on 24.09.2018. The assessment was originally completed under section 143(3) of the Act vide order dated 08.04.2021 wherein the returned loss of Rs.88,195/- was accepted. Subsequently, information was received from the Investigation Wing, Kolkata, alleging that the assessee had obtained an accommodation entry amounting to Rs.75,00,000/- from M/s. Culminating Projects Private Limited during the relevant previous year. On the basis of such information, proceedings under section 148A were initiated. An order under section 148A(d) was passed on 31.03.2023 and notice under section 148 was thereafter issued on 04.04.2023.

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4.

During the reassessment proceedings, the Assessing Officer examined the payment of Rs.75,00,000/- made by the assessee to M/s. Culminating Projects Private Limited. The assessee explained that the said concern had rendered liaisoning and consultancy services in connection with obtaining municipal approvals relating to its real estate project and that the expenditure had been capitalised as part of Work-in-Progress. 5. The Assessing Officer, however, relying upon information received from the Investigation Wing and statements recorded during search and survey proceedings in the case of Shri Kamal Kumar Jain and entities allegedly controlled by him, concluded that M/s. Culminating Projects Private Limited was engaged in providing accommodation entries and bogus bills. The Assessing Officer further observed that the assessee had failed to furnish adequate documentary evidence regarding actual rendering of services, failed to produce any written consultancy agreement and failed to substantiate the commercial necessity and genuineness of the payment. 6. Accordingly, the Assessing Officer passed an order dated 26.02.2024 under section 147 read with section 144B of the Act. Accepting the assessee's contention that the amount had not been claimed in the Profit and Loss Account but had been capitalised, the Assessing Officer reduced the closing Work-in- Progress by Rs.75,00,000/- and completed the assessment accordingly.

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7.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A).The appellate order records that notices under section 250 of the Act were issued on various dates. Paragraph 5.1 of the impugned order records the following opportunities granted: Sr. Date of Notice u/s Date of Remarks No. 250 of the Act Hearing 1 01.04.2024 N.A. Enablement Communication 2 16.05.2025 26.05.2025 Adjournment sought on 26.05.2025 3 12.02.2026 (Final) 17.02.2026 Adjournment sought on 17.02.2026

8.

The learned CIT(A) observed that despite opportunities having been granted, the assessee did not furnish submissions on merits and proceeded to dismiss the appeal while affirming the action of the Assessing Officer. 9. Before us, the learned Authorised Representative (AR) submitted that the learned CIT(A) passed the impugned order without affording effective opportunity of hearing to the assessee. Inviting our attention to paragraph 5.1 of the appellate order, the learned AR submitted that the assessee had sought an adjournment on 17.02.2026 against the final hearing fixed on that date. It was contended that the learned CIT(A) passed the impugned order on 20.02.2026 without first disposing of the

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adjournment application and without communicating any decision thereon to the assessee. 10. The learned AR submitted that once an adjournment application was pending consideration, the learned CIT(A) ought either to have granted or rejected the same before proceeding to decide the appeal. According to him, the assessee was thereby deprived of an effective opportunity to place its submissions and supporting evidence on record. He therefore prayed that the impugned order be set aside and the matter restored to the file of the learned CIT(A) for fresh adjudication. 11. The learned Departmental Representative relied upon the orders of the lower authorities and pointed out the non- compliance on part of the assessee. 12. We have heard the rival submissions and perused the material available on record. The sole grievance raised before us is that the appeal has been disposed of by the learned CIT(A) without granting adequate opportunity of hearing. On perusal of paragraph 5.1 of the impugned appellate order, it is evident that the final notice was issued on 12.02.2026 fixing the appeal for hearing on 17.02.2026 and that an adjournment was sought by the assessee on the said date. The impugned appellate order came to be passed shortly thereafter on 20.02.2026. 13. Nothing has been brought to our notice from the appellate records to demonstrate that the adjournment request made by

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the assessee on 17.02.2026 was specifically disposed of before passing the impugned order or that the rejection of such request was communicated to the assessee. The appellate order itself records the factum of the adjournment request. 14. It is a settled principle that an appeal should ordinarily be decided after affording a reasonable and effective opportunity of hearing. The right of appeal is a valuable statutory right and the appellate authority is expected to adjudicate the controversy after permitting the parties to place their case on record. In the peculiar facts of the present case, we are of the considered view that the ends of justice would be met if one more effective opportunity is granted to the assessee. 15. Accordingly, without expressing any opinion on the merits of the additions sustained by the learned CIT(A), we set aside the impugned order dated 20.02.2026 passed under section 250 of the Act and restore the entire matter to the file of the learned CIT(A) for adjudication afresh in accordance with law after affording reasonable and effective opportunity of hearing to the assessee. 16. The assessee is directed to cooperate in the appellate proceedings and shall not seek unnecessary adjournments. All issues raised in the grounds of appeal are left open for adjudication by the learned CIT(A).

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17.

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

Order pronounced in the open court on 19.06.2026.

Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 19/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai

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