PUSHPAVATI JANARDHAN RAO,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 4 (3), MUMBAI, MUMBAI

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ITA 4243/MUM/2025Status: DisposedITAT Mumbai12 August 2025AY 2018-19Bench: SHRI NARENDRA KUMAR BILLAIYA, HON'BLE (Accountant Member), SHRI SANDEEP SINGH KARHAIL, HON'BLE (Judicial Member)3 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that despite the assessee's non-attendance, the CIT(A) ought to have decided the appeal on merits. Consequently, the Tribunal restored the appeal to the file of the CIT(A) with a direction to decide it afresh on merits after affording the assessee a reasonable opportunity of being heard.

What were the facts?

The assessee challenged an ex-parte assessment order passed under Section 143(3) read with Section 144B, where the Assessing Officer estimated business income and levied interest and penalty. The CIT(A) dismissed the assessee's appeal for non-prosecution, leading to the current appeal before the Tribunal.

What were the issues?

The key issue was whether the CIT(A) was justified in dismissing an appeal for non-prosecution without deciding it on merits, especially when the underlying assessment involved an ex-parte order and estimation of income.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 144B(1),Section 144B(9),Section 234B,Section 234C,Section 271A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SANDEEP SINGH KARHAIL, HON’BLE

For Appellant: Ms. Vinita Nara, A/R
Hearing: 12/08/2025Pronounced: 12/08/2025

Assessee by : Ms. Vinita Nara, A/R Revenue by : Mr. Virabhadra S. Mahajan, Sr. D/R सुनवाई की तारीख/Date of Hearing : 12/08/2025 घोषणा की तारीख /Date of Pronouncement: 12/08/2025 आदेश/O R D E R

PER NARENDRA KUMAR BILLAIYA, AM:

1.

This appeal by the assessee is preferred against the order dated 08/05/2025 by NFAC, Delhi [hereinafter the ‘ld. CIT(A)’] pertaining to AY 2018-19.

2.

The grievance of the assessee reads as under:- “1. The Ld. CIT (A), NFAC, has erred in passing the impugned order dated 08.05.2025, dismissing the appeal for non-prosecution and not dealing with the merits of the case. 2. The learned Assessing Officer erred in not accepting the return of income as declared by the appellant and assessing the total income of the appellant at Rs. 60,40,742/- vide an ex-parte assessment order u/s 143(3) r.w.s. 144B of the Act dated 07.05.2021. 3. The assessment order passed is in blatant violation of principles of natural justice in as much as the adjournment request of the appellant in response to the show cause notice of the learned Assessing Officer has been ignored while passing the impugned order. a. The impugned assessment order dated 07.05.2021 is non-est as per section 144B(9) of the Act as the learned Assessing Officer has not followed the procedures prescribed u/s 144B(1) of the Act. 4. The learned Assessing Officer erred in estimating the business income of the appellant at Rs. Rs.60,81,610/-. a. The learned Assessing Officer erred in treating the total credits in the bank account of Rs. 5,75,74,013/- as the gross receipts/ turnover of the business and total debits in the bank account of Rs.4,99,72,000/- as the total purchases and thereby deriving gross profits of Rs.76,02,013/- b. The learned Assessing Officer erred in estimating the expenses at the rate of 20% of the gross profit and taxing the balance 80% of the gross profits as the business income of the appellant. c. The learned Assessing Officer has erred in stating that expenses have not been vouched and no bills or supporting evidences have been produced in support of the claim of expenses. d. The learned Assessing Officer erred in not accepting the business profits offered by the appellant and without rejecting the books of the appellant estimating the profits of the Appellant at Rs. 60,81,610/-.

5.

The learned Assessing Officer erred in making the impugned addition of the business profits of Rs. 60,81,610/- despite the fact that the same was not the reason for limited scrutiny.

6.

The Learned Assessing Officer erred in levying interest under section 234B, 234C and initiating penalty proceeding u/s 271A and 271A of the Act without appreciating the fact that the appellant denies his liability to the same.

7.

The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal.”

3. Heard the parties. The order of the ld. CIT(A) has been carefully perused. We find that the ld. CIT(A) has dismissed the appeal of the assessee on the ground that the assessee has no interest in pursuing the appeal. It is true that the notice issued by the ld. CIT(A) were not attended but at the same time, the ld. CIT(A) ought to have decided the appeal on merits of the case. Therefore, in the interest of justice and fairplay, we deem it fit to restore the appeal to the file of the ld. CIT(A) with a direction to decide the appeal afresh on merits of the case after affording reasonable and adequate opportunity of being heard to the assessee.

4.

In the result, appeal of the assessee is allowed for statistical purposes.

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