DELIGHT HYDRAULIC INDUSTRIES,RAJKOT vs. ITO WD 3(1)(1), RKT/, RAJKOT

ITA 315/RJT/2025Status: DisposedITAT Rajkot05 October 2026AY 2014-1510 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that due to the non-availability of required documents and evidences, both from the assessee and the revenue, the legal issues and additional grounds raised by the assessee require further factual verification. The Tribunal noted that the documents submitted before the Bench were inconsistent and did not match the reasons recorded by the AO, nor did they align with the reasons recorded in the Gujarat High Court judgment in the case of Paras Chandreshbhai Koticha. The Tribunal found merit in the revenue's submission that the assessees allegedly filed documents late, the AO did not have adequate time, and further factual verification was needed for legal and additional grounds. Additionally, the Tribunal observed that the assessees did not get a proper opportunity before the AO, as assessment orders were framed under Section 144 in two cases, referencing the Supreme Court decision in Tin Box Company v. CIT regarding denial of adequate opportunity. Therefore, to protect the assessee's right to natural justice and for proper adjudication, the Tribunal set aside the order of the CIT(A) and remitted the appeals back to the file of the AO for fresh adjudication. The assessee would be at liberty to adduce relevant evidence, and the AO must provide an adequate opportunity of being heard before passing a speaking order.

What were the facts?

The assessee, Delight Hydraulic Industries, has filed three appeals before the Income Tax Appellate Tribunal (ITAT), Rajkot Bench, for assessment years (AY) 2013-14, 2014-15, and 2015-16. These appeals challenge the orders passed by the Commissioner of Income-Tax (Appeals), which upheld assessment orders passed by the Assessing Officer (AO) under Section 147 read with Section 144 of the Income Tax Act, 1961. The assessments were initiated based on credible information regarding cash transactions and alleged unaccounted sales, including information received from the Deputy Commissioner of Income Tax, Central Circle-1, Rajkot. The AO issued notices under Section 148 and subsequently under Section 142(1) and 143(2). The assessee initially failed to file a return but later filed one, providing some documentation. However, the AO proceeded to pass ex-parte assessment orders.

What were the issues?

1. Whether the Ld. CIT(A) erred in upholding the assessment order passed by the AO under Section 147 read with Section 144 of the Income Tax Act, 1961? (Question of law and fact) 2. Whether the Ld. CIT(A) erred in upholding the addition made by the AO under Section 69A of the Income Tax Act, 1961, on account of unaccounted investment? (Question of law and fact) 3. Whether the AO erred in assuming jurisdiction under Section 147 of the Act by issuing a notice under Section 148, particularly in respect of an assessment arising from a search conducted prior to 01.04.2021, where the only permissible course was under Section 153C, as per the Gujarat High Court's decision in Paras Chandreshbhai Koticha Vs. ITO? (Question of law) Assessee's contentions: The assessee argued that the AO erred in assuming jurisdiction under Section 147 and that the proceedings should have been under Section 153C, citing the Gujarat High Court judgment in Paras Chandreshbhai Koticha. The assessee also contended that no addition could be made based solely on third-party information without corroboration, referencing decisions in Dr. Sreenivasulu Reddy Ponnaluru Vs ACIT and CIT vs Odeon Builders (P) Ltd. The assessee claimed they did not have transactions with Shri Chetan Bhalodiya and that documents were seized by the investigation wing. Revenue's contentions: The revenue argued that the assessee failed to submit complete documents and evidence before the AO, and whatever was submitted was at the fag end of the proceedings, not allowing sufficient time for examination. The revenue also contended that in two cases, ex-parte orders were passed under Section 144, and thus, the issues were not examined on merits. The revenue submitted that the legal and additional grounds raised by the assessee required further factual verification and proposed remitting the appeals back to the AO for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 69A,Section 148,Section 142(1),Section 143(2),Section 133(6),Section 153C,Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Fenil H. Mehta, Ld. AR
For Respondent: Shri Sanjay Kumar, Ld. CIT(DR) and Ganesh Iyer, Ld. Sr. DR
Hearing: 08/07/2026

Per, Dr. Arjun Lal Saini, AM: Captioned three appeals filed by the same assessee, pertaining to assessment year (AY) 2013-14, 2014-15 and 2015-16, are directed against the separate orders passed by the Commissioner of Income-Tax (Appeals), which in turn arise out of separate assessment order passed by the Assessing Officer u/s 147 r.w.s.144 of the Act.

2.

Since, the issues involved in all the appeals are co

The order continues below.

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