CDG PETCHEM LIMITED,HYDERABAD vs. ITO, WARD - 1(1), HYDERABAD

ITA 1900/HYD/2025Status: DisposedITAT Hyderabad16 October 2026AY 2018-20198 pages
AI SummaryRemanded

What were the facts?

The assessee, M/s. CDG Petchem Limited, is aggrieved by the order of the Learned Commissioner of Income Tax (Appeals), NFAC Delhi, dated 27.03.2025, for Assessment Year 2018-19. The appeal was filed with a delay of 165 days. The assessee attributed the delay to a change in authorized representatives, leading to a lack of timely knowledge of the CIT(A)'s order. The revenue opposed the condonation of delay. The Assessing Officer had completed the assessment under section 143(3) read with sections 143(3A) and 143(3B) of the Income-tax Act, 1961, making disallowances and additions totaling Rs. 17,66,457/-. The CIT(A) had partly allowed the assessee's appeal.

What did the Tribunal hold?

The Tribunal held that the assessment order dated 05.04.2021 was passed in violation of the principles of natural justice and the mandatory procedure prescribed under the faceless assessment provisions, specifically section 144B(1)(xvi)(b). The Tribunal noted that the assessment was completed after 01.04.2021, necessitating compliance with section 144B. It relied on the Hon'ble Delhi High Court's decision in Javin Construction Private Limited Vs. National Faceless Assessment Centre, which held that the issuance of a prior show-cause notice and draft assessment order is mandatory before passing a final assessment order involving variations prejudicial to the assessee. The Tribunal found that the AO did not issue a draft assessment order, depriving the assessee of the prescribed opportunity to respond to adverse variations. Consequently, the assessment order and the consequential order of the CIT(A) were set aside. The matter was restored to the AO with a direction to issue a show-cause notice along with a draft assessment order, afford the assessee an opportunity to submit objections, and then pass a reasoned assessment order. The remaining grounds concerning additions and disallowances were left undecided as the assessment was set aside.

What were the issues?

1. Whether the assessment order dated 05.04.2021 can be sustained when it was passed without first issuing a draft assessment order and affording the assessee an opportunity to respond to proposed variations prejudicial to its interests, as required by section 144B of the Income-tax Act, 1961? Assessee's contention: The assessment order was passed in violation of the mandatory procedure prescribed under the faceless assessment provisions (section 144B), specifically by not issuing a draft assessment order and providing an opportunity to respond to proposed variations, thus liable to be quashed. Revenue's contention: The revenue relied upon the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 143(3A),Section 143(3B),Section 40(a)(ia),Section 144B,Section 144B(1)(xvi)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia

Hearing: 29/09/2026

Per Madhusudhan Sawdia, A.M.: This appeal is filed by M/s. CDG Petchem Limited (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi (“Ld. CIT(A)”) dated 27.03.2025 for the A.Y. 2018-19. 2. At the outset, we observe that there is a delay of 165 days in filing the present appeal before this Tribunal. The assessee has filed a petition for condonation of delay along

ITA No 1900 of 2025 CDG Petchem Ltd

with

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →