AKSHY PREM AGRO SERVICES PRIVATE LIMITED,RAJAHMUNDRY vs. INCOME TAX OFFICER, WARD -2(1), RAJAMAHENDRAVARAM
What did the Tribunal hold?
The Tribunal found that notices were not properly served on the assessee, leading to a violation of natural justice. Consequently, the matter was remanded back to the Assessing Officer for a fresh assessment.
What were the facts?
The assessee's case was selected for scrutiny, but notices issued during assessment and appellate proceedings were allegedly not received. The Assessing Officer made additions for unexplained trade payables and estimated business profits, which were upheld by the CIT(A).
What were the issues?
Whether the assessment and appellate proceedings were vitiated due to non-service of proper notices, and if the additions made for unexplained credits and estimated profits were justified without proper opportunity to the assessee.
Which sections of the Income-tax Act were involved?
Section 144,Section 144B,Section 250,Section 68,Section 270A,Section 271AAC(1),Section 142(1),Section 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH,
Before: SHRI UDAYAN DAS GUPTA, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE
आयकर अपीलीय अधिकरण, धिशाखापत्तनम पीठ, धिशाखापत्तनम INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM BENCH: DIVN BEFORE SHRI UDAYAN DAS GUPTA, HON’BLE JUDICIAL MEMBER AND SHRI OMKARESHWAR CHIDARA, HON’BLE ACCOUNTANT MEMBER ITA 129, 130 & 131/VIZ/2026 (निर्धारण वर्ा/Assmt. Year: 2022-23) AKSHY PREM AGRO SERVICES INCOME TAX OFFICER, PRIVATE LIMITED WARD 2(1) 41-2-142 VEERABHADRA NAGAR INCOME TAX OFFICE, THADITHOTA , RAJAHMUNDRY RAJAHMUNDRY, H.O EAST GODAVARI DIST.-533101 Vs. EAST GODAVARI, ANDHRA PRADESH RAJAHMUNDRY (URBAN), EAST GODAVARI DIST.-533101, ANDHRA PRADESH (अपीलार्थी Appellant) (प्रत्यर्थी Respondent)
Permanent Account Number of Assessee: AAUCA1424D
निर्धारिती द्वधिध/Assessee represented by: Shri C Subrahmanyam, CA िधजस्व द्वधिध/Revenue represented by: Sri Nilanjan Dey, CIT(DR)
सुिवधई की तधिीख / Date of conclusion of hearing: 18-Jun-2026 घोषणध की तधिीख / Date of pronouncement: 19-Jun-2026 आदेश / ORDER PER UDAYAN DAS GUPTA, JUDICIAL MEMBER: All these appeals filed by the assessee, are heard and disposed off together for the sake of convenience. Firstly, we proceed to adjudicate the appeal i.e., ITA No.130/VIZ/2026 (A.Y. 2022-23).
ITA No. 130/VIZ/2026 (A.Y. 2022-23)
This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] passed under section 250 of Income Tax Act, 1961 [hereinafter in short “the Act”] dated 18.09.2025 which has emanated from the order of the Ld. Assessing Officer [hereinafter in short “Ld.AO”] dated 29.03.2024 passed under section 144 r.w.s. 144Bof the Act.
Grounds of appeal taken by the assessee in Form No. 36 are as follows: -
“1. That under the facts and circumstances of the case, the order passed u/s 144 r.w.s 144B IT Act dt: 29.03.2024, which was upheld by the Ld. CIT(A), NFAC vide order passed u/s 250 of the I.T. Act dt:18.09.2025 is not in accordance with the facts of the case and the provisions of law. 2. The Ld. CIT(A) erred in stating that notices of hearing were issued. The assessee did not receive any notice from the office of the CIT (A) at the designated address specifically mentioned in Form No. 35, Column No. 17, wherein the assessee had requested that notices be served only by physical mode and not through email. In the absence of valid issuance and service of notice, the proceedings are in gross violation of the principles of natural justice and are bad in law, liable to be quashed. 3. The Ld. CIT(A), under the facts and circumstances of the case erred in treating trade payables amounting to Rs.2,08,31,147/- as unexplained credits u/s. 68 of the Act. 4. The Ld. CIT(A), further erred in adding other payables of RS.68,44,201/- as unexplained credits u/s. 68 of the Act, totally disregarding the facts and circumstances of the case. 5. The Ld. CIT(A) erred in estimating the profit at 15% of the turnover of Rs.54,83,79,327l-, thereby making addition under the head business income of Rs.8,11,60,141/-, this without reference to any material, thus rendering the estimation arbitrary, excessive, and unreasonable. 6. The Ld. CIT(A), having regard to the facts and circumstances of the case, the nature of the disputed addition, and the substantial quantum involved, ought to have either directed the Assessing Officer to grant a proper opportunity of hearing to the assessee or, alternatively, called for a remand report to examine the issues in a fair and judicious manner. The failure to do so has resulted in serious prejudice to the assessee. 7. The Ld. CIT(A) ignoring the financials and books of accounts could not have taken a unilateral decision of making additions on mere surmise and suspicion.
The Ld. CIT(A) failed to appreciate that the additions sustained are based on conjectures, surmises, and assumptions, and are therefore liable to be deleted in entirety. 9. For these and other reasons that have to be urged at the time of hearing of the case the assessee prays that the addition made by the assessing officer and sustained by Ld. CIT (A) are to be deleted in the interest of Justice.”
Condonation of delay : It is pointed out by the registry that this appeal is belatedly filed by 71 ( Seventy one ) days and the assessee has filed an application requesting condonation of the same, and submitted that the assessee was affected with viral fever from 24.11.2025 to 15.12.2025 ( Medical certificate filed ) and could not compile the data required and approach his counsel for preparation and filing of this appeal within time, resulting in this delay and there was no intentional default or willful neglect on the part of the assessee and he prayed for condonation of the same. Considering sufficiency of reasons, we condone the same and admit the appeal to be heard on merits.
Brief facts emerging from records are that the assessee company is engaged in business and has filed its regular return u/s 139(1) declaring a total income of Rs.10,96,759/- supported by tax audit report and audited financials.
The case was selected for complete scrutiny for verification of expenses claimed as per ITR amounting to Rs. 54.72 crores, but the notices issued in course of assessment proceedings has remained uncompiled and in absence of any response from the assessee or any submission being filed in course of assessment, the total income was determined at Rs. 10.99 crores ( with addition u/s. 68 amounting to Rs.10.88 Crores on account of unexplained trade creditors and estimation of business profits ) .
The matter carried in first appeal has been dismissed in absence of any compliance or submission being filed in response to various notices issued in course of appellate proceedings.
Now the assessee is before the tribunal and the main grievance of the Ld AR is that no notice has been issued from the office of the Ld CIT ( A ) in the address stated in Form No. 35 ( col- 17 ) which is the address specified for receipt of notice in appellate proceedings and non-service of notice on the specified address tantamount to violation of section 282 of the Act r.w.r. 127 of IT Rules, 1962. The Ld AR further submitted that notice in this case has been issued in registered email of the assessee ( as per evident from para – 4 of appellate order ) , but the email ID stated in Form 35 is that of the counsel of the assessee and no notice has been issued in such address, resulting in non-compliance on the part of the assessee , and he prays for an opportunity of proper hearing either before the Ld first appellate authority or before the AO to explain his claim of expenditure with supporting documentary evidence, which in this case has never been possible because the order by the AO has also been passed exparte.
The Ld DR relied on the order of the Ld first appellate authority but he has not rebutted the contention of the assessee that notice of hearing has not been issued in the email as stated in Form No.35 nor in the postal address as mentioned in column - 17 of Form No.35.
We have heard the rival counsels and considered the materials on record and we find that notice has not been issued in the email contained in Form No.35 , resulting in non-compliance by the assessee and in absence of any documentary evidences before the Ld first appellate authority , it was not possible to adjudicate the grounds of appeal on merits.
We also find that there has not been any compliance before the AO at the assessment stage even though various notices u/s 142(1) has been issued on different dates and the Ld AR has not been able to enlighten us regarding the cause of non-representation and non-submission of documentary evidences at the original assessment stage in spite of repeated opportunities.
Even now also, before the tribunal the assessee has not submitted any paper book or any semblance of any documentary evidences relating to claim of direct and indirect expenses as per audited financials, which was the main reasons for selection of this case.
However, considering all aspects of the matter , we are of the opinion that claim of such substantial expenses amounting to Rs. 54.72 crores , as claimed by the assessee in the ITR needs to be explained with production of regular books of accounts supported by bills, invoices, bank statement, and all relevant particulars, ( which is expected to be voluminous ) and needs to be verified and examined by the AO regarding its genuineness and authenticity at the original stage, and as such, in the interest of justice we remand the matter back to AO for a fresh assessment de-novo , after allowing reasonable opportunity of being heard to the assessee and we also direct the assessee to furnish all evidences in support of its claim and fully cooperate in fresh assessment proceedings.
Before we conclude , we are also of the opinion that in this case , the willful neglect on the part of the assessee in complying with various notices issued by departmental authorities and submitting supporting documentary evidences even before appellate authorities in the portal along with SOF and grounds of appeal ( in terms of column -12 of Form No.35 ) and in absence of any paper book being filed before us in support of the claim of expenses as per ITR , cannot be overlooked .
As such, we consider it to be a fit case for imposition of cost for causing intentional loss of judicial hours and as such we impose a token cost on the assessee amounting to Rs. 20,000/- ( twenty thousand only ) payable to the credit of “AP State Legal Services Authority ”, payable within 30 days from the date of communication of this order ( evidence to be filed before JAO ) .
In the result the appeal of the assessee is allowed for statistical purpose.
ITA NO. 129/VIZ/2026 (A.Y. 2022-23) – PENALTY APPEAL
This appeal is preferred by the assessee against the order of the Ld CIT ( A ) passed u/s 250 of the Act dated 18.09.2025 which has emanated from the penalty imposed u/s 270A of the Act dated 23.09.2024.
The grounds of appeal taken by the assessee in Form No. 36 read as follows: -
“1. That under the facts and circumstances of the case, the order passed u/s 270A IT Act dt: 23.09.2024, which was upheld by the Ld. CIT(A), NFAC vide order passed u/s 250 of the I.T. Act dt: 18.09.2025 is not in accordance with the facts of the case and the provisions of law. 2. The Ld. Commissioner of Income Tax (Appeals) erred in stating that notices of hearing were issued. The assessee did not receive any notice from the office of the CIT(A) at the designated address specifically mentioned in Form No. 35, Column No. 17, wherein the assessee had requested that notices be served only by physical mode and not through email. In the absence of valid issuance and service of notice, the proceedings are in gross violation of the principles of natural justice and are bad in law, liable to be quashed. 3. The Ld. CIT(A), under the facts and circumstances of the case erred in confirming the penalty imposed by AO of Rs. 1,18,34,025/-especially such penalty is unwarranted. 4. The Ld. CIT(A) erred in law in upholding the levy of penalty under section 270A of the Act, without appreciating that the facts of the assessee's case do not fall within the scope and parameters of the said provision. The impugned penalty of Rs. 1,18,34,025/- has thus been sustained in disregard of the applicable provisions of law and is liable to be deleted. 5. The Ld. Commissioner of Income-tax (Appeals), having regard to the facts and circumstances of the case, the nature of the disputed addition could not have confirmed the penalty u/s. 270A of the IT Act. 6. The Ld. Commissioner of Income-tax (Appeals), having regard to the facts and circumstances of the case, ought to have either directed the Assessing Officer to grant a proper opportunity of hearing to the assessee or, alternatively, called for a remand report to examine the issues in a fair and judicious manner. The failure to do so has resulted in serious prejudice to the assessee. 7. For these and other reasons that have to be urged at the time of hearing of the case the assessee prays that the addition made by the assessing officer and sustained by Ld. CIT(A) are to be deleted in the interest of Justice.”
Condonation of delay : It is pointed out by the registry that this appeal is belatedly filed by 71 ( Seventy one ) days and the assessee has filed an application requesting condonation of the same, and submitted that the assessee was affected with viral fever from 24.11.2025 to 15.12.2025 ( Medical certificate filed ) and could not compile the data required and approach his counsel for preparation and filing of this appeal within time, resulting in this delay and there was no intentional default or willful neglect on the part of the assessee and he prayed for condonation of the same. Considering sufficiency of reasons, we condone the same and admit the appeal to be heard on merits.
Since we have already set aside the related quantum appeal in ITA No: 130/ VIZ / 2026 , for the same assessment year , back to the files of the AO for fresh assessment, we also remand this penalty matter back to the AO for considering the same afresh in tandem with the quantum proceedings.
In the result the appeal of the assessee is allowed for statistical purpose.
ITA NO. 131/VIZ/2026 (A.Y. 2022-23) – PENALTY APPEAL
This appeal is preferred by the assessee against the order of the Ld CIT ( A ) passed u/s 250 of the Act dated 18.01.2026 which has emanated from the penalty imposed u/s 271AAC(1) of the Act dated 18.09.2024.
The grounds of appeal taken by the assessee in Form No. 36 read as follows: -
“1. That under the facts and circumstances of the case, the order passed u/s.271AAC (1) IT Act dt: 18.09.2024, which was upheld by the Ld.CIT(A), NFAC vide order passed u/s 250 of the IT. Act dt: 18.01.2026 is not in accordance with the facts of the case and the provisions of law. 2. The Ld. CIT(A) erred in stating that notices of hearing were issued. The assessee did not receive any notice from the office of the CIT (A) at the designated address specifically mentioned in Form No. 35, Column No. 17, wherein the assessee had requested that notices be served only by physical mode and not through email. In the absence of valid issuance and service of notice, the proceedings are in gross violation of the principles of natural justice and are bad in law, liable to be quashed. 3. The Ld. CIT(A), under the facts and circumstances of the case erred in confirming the penalty imposed by AO of Rs. 16,60,520/- especially such penalty is unwarranted. 4. The Ld. CIT(A) erred in law in upholding the levy of penalty u/s.271AAC of the Act, without appreciating that the facts of the assessee's case do not fall within the scope and parameters of the said provision. The impugned penalty of Rs.16,65,520/- has thus been sustained in disregard of the applicable provisions of law and is liable to be deleted.
The Ld. CIT(A), having regard to the facts and circumstances of the case, the nature of the disputed addition could not have confirmed the penalty u/s.271AAC (1) of the IT Act. 6. The Ld. CIT(A), having regard to the facts and circumstances of the case, ought to have either directed the AO to grant a proper opportunity of hearing to the assessee or, alternatively, called for a remand report to examine the issues in a fair and judicious manner. The failure to do so has resulted in serious prejudice to the assessee. 7. For these and other reasons that have to be urged at the time of hearing of the case the assessee prays that the addition made by the assessing officer and sustained by Ld. CIT(A) are to be deleted in the interest of Justice.”
Since we have already set aside the related quantum appeal in ITA No: 130/ VIZ / 2026 , for the same assessment year , back to the files of the AO for fresh assessment, we also remand this penalty matter back to the AO for considering the same afresh in tandem with the quantum proceedings.
In the result all the appeals of the assessee are allowed for statistical purpose.
Order pronounced in the open court on 19th June, 2026.
Sd/- Sd/- OMKARESHWAR CHIDARA UDAYAN DAS GUPTA ACCOUNTANT MEMBER JUDICIAL MEMBER Visakhapatnam Dated:19.06.2026 Giridhar, Sr.PS Copy to: AKSHY PREM AGRO SERVICES PRIVATE LIMITED, 41-2-142 VEERABHADRA NAGAR THADITHOTA , RAJAHMUNDRY, H.O 1 EAST GODAVARI, RAJAHMUNDRY (URBAN), EAST GODAVARI DIST.-533101, ANDHRA PRADESH INCOME TAX OFFICER, WARD 2(1), RAJAHMUNDRY, 2 EAST GODAVARI DIST.-533101, ANDHRA PRADESH
3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE
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