QUEEN GEMS PRIVATE LIMITED,MUMBAI vs. ITO, WARD 2(1)(1), SURAT., SURAT

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ITA 1145/SRT/2025Status: DisposedITAT Surat29 October 2026AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Income Tax Appellate Tribunal (ITAT) restored the matter to the file of the Assessing Officer (AO) for fresh adjudication. The Tribunal considered the principle of natural justice and noted that no prejudice would be caused to the revenue by restoring the case. The assessee's prayer for remand was accepted, with the understanding that the assessee now possesses all relevant details and documents and would make an effective representation. The ITAT directed the AO to provide the assessee with an opportunity of hearing and pass an appropriate order, uninfluenced by the earlier order. The assessee was also directed to be vigilant and ensure participation in hearings without seeking unnecessary adjournments, failing which the AO would be at liberty to proceed in accordance with law. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Queen Gems Private Limited, engaged in export-import and trading of diamonds, filed its return for Assessment Year 2014-15 declaring an income of Rs. 1,21,300/-. The Assessing Officer (AO) reopened the case under Section 147 r.w.s. 144 of the Income-tax Act, 1961, issuing a notice dated 02.08.2021 under Section 148. The assessee filed a revised return declaring Rs. 2,07,720/-. The AO completed the reassessment, determining the total income at Rs. 14,05,99,710/- by making an addition of Rs. 14,03,91,990/-. The assessee appealed to the Commissioner of Income-Tax (Appeals) - NFAC, Delhi, who dismissed the appeal for non-prosecution, upholding the AO's order. The assessee then filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the ITAT should remand the matter to the Assessing Officer for fresh adjudication, considering that both the assessment order and the appellate order were passed ex-parte, and the assessee claims to have not been properly represented earlier and now possesses all relevant details and documents. Assessee's Contention: The assessee argued that both the assessment order by the AO and the appellate order by the CIT(A) were ex-parte. The AO passed the order based on information from the investigation wing without specifying the nature or dates of transactions amounting to Rs. 2,34,00,000/-. The CIT(A) also dismissed the appeal without considering the merits. The assessee highlighted discrepancies in the AO's order regarding cash deposits and unexplained credits, stating that credits alone do not represent assets requiring notice under Section 148 after three years. The assessee prayed for a remand to the AO for fresh adjudication. Revenue's Contention: The Revenue, through the CIT-DR, did not oppose the prayer for restoration but requested strict directions to the assessee.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT BENCH, SURAT

For Appellant: Shri Rajesh C. Shah, CA
For Respondent: Shri Aashish Pophare, CIT-DR with Shri Ashish Kumar, Sr. DR
Hearing: 16.09.2026Pronounced: 29.10.2026

आदेश / O R D E R Per, B.M. Biyani, A.M.:

Feeling aggrieved by the order of first-appeal dated 13.08.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“Ld. CIT(A)”], which in turn arises out of the assessment-order dated 09.03.2023 passed by learned Assessment Unit of Income-tax Department [“Ld. AO”] u/s 147 r.w.s. 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”]

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Queen Gems Private Limited ITA No. 1145/SRT/2025 - AY 2014-15 2014-15, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

2.

The background facts leading to present appeal are such that the assessee-company is engaged in the business of export-imporant and trading of diamond. For AY 2014-15, the assessee filed return declaring a total income of Rs. 1,21,300/- which was assessed. Subsequently, taking into account certain information, the Ld. AO re-opened assessee’s case u/s 147 through a notice dated 02.08.2021 u/s 148. In response, the assessee filed return declaring a total income of Rs. 2,07,720/-. Ultimately, the Ld. AO completed re-opened assessment determining total income at Rs. 14,05,99,710/- after making an addition of Rs. 14,03,91,990/-. Aggrieved, the assessee carried matter in first-appeal whereupon the Ld. CIT(A) dismissed assessee’s appeal for non-prosecution while upholding AO’s order. Still aggrieved, the assessee has come in present appeal before us.

3.

Ld. AR for assessee filed following written-submission:

“Though the appellant has filed an adjournment in this case, but wants to mention that both the assessment order and the appellate order passed are ex parte. Based on the information and explanation given by the directors of the appellant company, we submit as under: 1. The earlier AR of the appellant asked for adjournment and has not submitted the details. The earlier AR was busy with other time-barred matters, and the present case was getting time-barred on 31.3.2024, but the assessment order was passed on 08.03.2023. 2. The Ld. AO has passed the assessment order just based on information received from the investigation wing. He has not even mentioned the nature of the transaction/s, date of the transaction/s with three parties for Rs.2,34,00,000/-. The Ld. CIT(A) has also dismissed the appeal on the same ground without knowing the nature of the transaction/s and the merit of the case.

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Queen Gems Private Limited ITA No. 1145/SRT/2025 - AY 2014-15 3. The Ld. AO in his assessment order first mentioned that the appellant has deposited the cash for Rs.11,69,91,990/-, but in para 8 of the order, it is mentioned that the credit of Rs.14,03,91,990/- remains unexplained. The appellant has stated that he has not deposited the cash in the bank, and if there is credit/s in the bank, then the nature of such credit has to be mentioned, which he has not done. The Ld. CIT(A) has also dismissed the appeal on the same ground without knowing the nature of the transaction/s and the merit of the case. 4. The credits in the bank do not represent the assets as required to issue the notice u/s 148 of the Act after three years. There must also be debits; therefore, credits in the bank alone do not represent assets. In light of the above, and in the interest of justice, the appellant prays to remand the matter to the file of the Ld. AO for fresh adjudication.” 4. Reiterating the very same submission orally, Ld. AR prayed to remand this matter back to the file of Ld. AO for a fresh adjudication. Ld. AR acknowledged that the assessee is now having in his possession, all relevant details and documents and ready to make an effective representation before Ld. AO. He assured that the assessee shall definitely make a proper and effective representation before Ld. AO.

5.

The Ld. DR for revenue, though not opposing the prayer of the assessee for restoration, requested to give strict directions to assessee.

6.

Considering the above submissions of parties; having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of Ld. AO, we restore this matter to the file of Ld. AO for adjudication afresh, at the risk and responsibility of assessee. The Ld. AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure

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Queen Gems Private Limited ITA No. 1145/SRT/2025 - AY 2014-15 participation in the hearings as may be fixed by Ld. AO without seeking unnecessary adjournments failing which the Ld. AO shall be at liberty to proceed in accordance with law. Ordered accordingly.

7.

In result, this appeal is allowed for statistical purposes.

Order pronounced in open court on 29/10/2026

Sd/- Sd/- (SUCHITRA KAMBLE) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER //True Copy// Surat िदनांक /Dated : 29/10/2026 Sr. PS Copies to: (1) The appellant (2) The respondent Digitally signed by (3) CIT HEMA KISHORE HEMA KISHORE JAKKA (4) CIT(A) (5) Departmental Representative JAKKA Date: 2026.10.29 (6) Guard File 16:53:23 +05'30' By order UE COPYAssistant Registrar Income Tax Appellate Tribunal Surat Bench, Surat

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