ONTIC FINSERVE LIMITED,AHMEDABAD vs. ITO WARD -3(1)(1), AHMEDABAD

ITA 1924/AHD/2026Status: DisposedITAT Ahmedabad30 September 2026AY 2018-196 pages
AI SummaryRemanded

What were the facts?

The assessee, Ontic Finserve Limited, filed an appeal against the order dated 24.07.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for Assessment Year 2018-19. The appeal was filed with a delay of 232 days. The assessee had originally filed its return of income on 27.09.2018 declaring a total income of Rs. 5,23,880/-. The case was reopened under Section 148 of the Income-tax Act, 1961, due to allegations of receiving accommodation entries. The Assessing Officer (AO) passed an ex-parte assessment order on 27.03.2023, determining the income at Rs. 4,33,86,846/-. The assessee appealed to the Ld. CIT(A) but did not participate in the proceedings or file submissions, leading to the dismissal of the appeal. The present appeal before the ITAT challenges the ex-parte orders of both the AO and the Ld. CIT(A).

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, applying the principle laid down in Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors. (1987) 167 ITR 471 (SC), considering that the interests of justice would be served by giving the assessee an opportunity to present its case. The Tribunal noted the lack of effective participation by the assessee before the AO and the Ld. CIT(A). To address the negligence of the assessee, a cost of Rs. 10,000/- was imposed, to be deposited in the Prime Minister’s National Relief Fund within 60 days, with proof to be produced before the Ld. CIT(A). Subject to this condition, the delay was condoned, the impugned order of the CIT(A) was set aside, and the matter was restored to the file of the CIT(A) for de novo adjudication. The CIT(A) was directed to pass a fresh order after giving due opportunity to the assessee, who was also directed to submit all relevant materials and supporting documents and comply with notices without seeking unnecessary adjournments. The issues raised by the assessee regarding the ex-parte nature of the orders, the validity of the assessment proceedings, disallowances, and additions were not adjudicated on merits by the Tribunal, as the matter was remanded for fresh consideration. The Tribunal's decision is that the assessee should be given a fair chance to present its case before the lower appellate authority.

What were the issues?

1. Whether the Ld. CIT(A) erred in passing an ex-parte order dismissing the appeal without granting sufficient opportunity of being heard to the appellant, contrary to principles of natural justice? 2. Whether the Ld. CIT(A) erred in confirming the ex-parte assessment order passed by the AO under Section 144 of the Act, as the conditions for invoking this section were not met? 3. Whether the Ld. CIT(A) erred in not adjudicating the ground challenging the legality of the notice issued under Section 148 of the Act, and the consequential assessment? 4. Whether the Ld. CIT(A) erred in not adjudicating the ground regarding the ex-parte assessment made by the AO without issuing the mandatory notice under Section 143(2) of the Act? 5. Whether the Ld. CIT(A) erred in confirming the assessment order without considering the return of income filed by the appellant in response to the Section 148 notice? 6. Whether the Ld. CIT(A) erred in confirming the disallowance of purchases amounting to Rs. 3,77,26,020/- under Section 37(1) of the Act, which was not part of the reasons recorded for reopening? 7. Whether the Ld. CIT(A) erred in confirming the estimated disallowance of Rs. 4,70,196/- in respect of 50% of administrative expenses? 8. Whether the Ld. CIT(A) erred in confirming the addition of Rs. 46,66,753/- as unexplained cash credit under Section 68 of the Act, without considering the nature of the transaction and without providing necessary evidence? 9. Whether the Ld. CIT(A) erred in confirming additions and disallowances without providing copies of seized material, statements, and without granting cross-examination of third parties, violating principles of natural justice? 10. Whether the Ld. CIT(A) erred in confirming additions and disallowances without rejecting the audited books of accounts under Section 145 of the Act? Assessee's Contentions: The assessee argued that the Ld. CIT(A) passed ex-parte orders without providing adequate opportunities. The assessment under Section 144 was bad in law. The notice under Section 148 was illegal, and the assessment based on it should be cancelled. The AO failed to issue the mandatory notice under Section 143(2). The return filed in response to the Section 148 notice was valid and not considered. The disallowance of purchases and administrative expenses was incorrect. The addition under Section 68 was made without proper consideration. The assessment was made against natural justice principles by not providing material and cross-examination rights. The AO confirmed additions without rejecting audited books under Section 145. The assessee also prayed for condonation of delay in filing the appeal. Revenue's Contentions: The judgment does not record specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 144,Section 148,Section 37(1),Section 68,Section 143(2),Section 145,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD BENCHES, AHMEDABAD

Before: DR. BRR KUMAR & SHRI SANJAY KUMAR

Pronounced: 30.09.2026

PER SANJAY KUMAR, JUDICIAL MEMBER:

- This appeal has been filed by the Assessee against the order dated 24.07.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the

The order continues below.

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