SINDHU FARMS PVT LTD,GURUGRAM vs. DCIT, ROHTAK

ITA 8194/DEL/2025Status: DisposedITAT Delhi30 September 2026AY 2020-215 pages
AI SummaryAllowed

What were the facts?

The assessee, Sindhu Farms Pvt. Ltd., is appealing against an order of the National Faceless Appeal Centre (NFAC), Delhi, dated 08-10-2025. This order arose from an assessment order dated 28-09-2022 passed under section 143(3) of the Income Tax Act, 1961. For Assessment Year 2020-21, the assessee had declared a total income of Rs.11,44,83,780/-, including agricultural income. The Assessing Officer (AO) selected the case for scrutiny and made an addition of Rs.2,271.17 lakhs by invoking section 2(22)(e) of the Act. The assessee's appeal to the NFAC was dismissed. Subsequently, the assessee filed a rectification application under section 154, which was allowed by the DCIT, Circle Rohtak, on 06-03-2023, deleting the entire demand of Rs.2,271.17 lakhs. The assessee then requested withdrawal of the appeal before the NFAC, but this was not accepted, and the NFAC dismissed the appeal on merits.

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) adjudicated the appeal on merits despite the addition having been deleted in rectification proceedings. The Tribunal noted that the DCIT, Rohtak Circle, had allowed the rectification application, observing that the addition of loans and advances was an apparent error from the record, and attached the demand notice and computation of income with its order. The Tribunal found that the Ld. CIT(A) should have allowed the withdrawal application of the assessee instead of deciding the appeal on merits. Since the additions were deleted on the rectification application, the order of the Ld. CIT(A) was set aside, and the appeal of the assessee before the Ld. CIT(A) was deemed to have been withdrawn by the assessee. Consequently, the appeal of the assessee before the Tribunal was allowed. The Tribunal did not explicitly leave any issue undecided.

What were the issues?

1. Whether the order passed by the Ld. AO under section 143(3) r.w.s. 144B of the Act is illegal, invalid, and void ab initio, as argued by the assessee. The assessee contended that the AO's order was illegal and should be quashed. 2. Whether the Ld. AO erred in making an addition of Rs.22,71,17,369/- by treating an amount paid to an entity as deemed dividend under section 2(22)(e) of the Income Tax Act, 1961, and whether the CIT(Appeal) erred in confirming this addition, as argued by the assessee. The assessee argued that there was no relation between the assessee and the entity to whom advances were given, as required by section 2(22)(e). 3. Whether the Ld. AO erred in applying the provisions of section 2(22)(e) of the Income Tax Act, even though there was no relation between the assessee and the entity to whom advances were given, as provided in section 2(22)(e), and whether the CIT(Appeal) erred in confirming the same, as argued by the assessee. The assessee contended that the conditions for invoking section 2(22)(e) were not met. 4. Whether the CIT(A) erred in passing an impugned order instead of acknowledging that the addition was rectified by the Ld. AO and that a withdrawal request was made by the assessee before the CIT(A), as argued by the assessee. The assessee argued that the NFAC should have accepted the withdrawal request given the rectification. 5. Whether the AO erred in charging interest under sections 234A, 234B, and 234C of the Act, and whether the CIT(A) erred in confirming the same, as argued by the assessee. The assessee contended that interest charges were erroneous.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 2(22)(e),Section 56(1),Section 154,Section 234A,Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, DELHI

Before: SH. M. BALAGANESH & SH. SUDHIR KUMAR

For Appellant: Shri Divyank Khullar, CA
For Respondent: Shri K. Hauthang, CIT-DR
Hearing: 15/09/2026Pronounced: 30/09/2026

PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order dated 08-10-2025 of the National Faceless Appeal Centre Delhi [hereinafter referred to as [“Ld. NFAC”], arising out the Assessment Order passed dated 28-09-2022 under section 143(3) of the Income Tax Act, 1961 (in short “the Act” Act.

2.

The assessee has raised the following grounds of appeal:-

1.

On the facts and in the circumstances of the case and in law, the order passed by the Ld. AO under section 143(3) r.w.s.144B of the Act is illegal invalid and void ab initio and liable to be quashed

2.

The Ld. AO has erred in law and on facts by making additio

The order continues below.

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