NAYAN REAL ESTATE PRIVATE LIMITED,THANE vs. INCOME TAX OFFICER WARD 7(3)(1), MUMBAI, MUMBAI

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ITA 2330/MUM/2025Status: DisposedITAT Mumbai25 July 2025AY 2022-2023Bench: Shri Narender Kumar Choudhry (Judicial Member), Shri Omkareshwar Chidara ( (Accountant Member)7 pages
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What did the Tribunal hold?

The Tribunal decided to remand the issue back to the file of the Ld. CIT(A) for a fresh decision, allowing the appellant to raise any grounds. This was because the Ld. CIT(A) had not passed an order on merits.

What were the facts?

The appellant filed an appeal against the order of the CIT(A) who confirmed the AO's order. The AO had made additions for unexplained investment and expenditure and disallowed a provision for interior work. The appellant had not responded to opportunities given by the CIT(A).

What were the issues?

Whether the CIT(A) erred in confirming the AO's additions and disallowances without passing an order on merits, and whether the appellant was denied a reasonable opportunity to present its case.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 69B,Section 37(1),Section 40(a)(ia),Section 143(2)

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Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.

Before: Shri Narender Kumar Choudhry (JM) & Shri Omkareshwar Chidara (AM)

For Appellant: Shri Leyaqat Ali Aafaqui
Pronounced: 25/07/2025

1. On the facts and circumstances of the case as well as in Law the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in confirming the order of the Learned Assessing Officer (AO) and has upheld the order passed u/s 143(3) r.w.s 144B of the Act.

2. On the facts and circumstances of the case as well as in Law the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in upholding the addition of Rs. 9,89,100/- made by the AO u/s 69B of the Income Tax Act, 1961 as unexplained investment.

3. On the facts and circumstances of the case as well as in Law the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in upholding the addition of Rs. 54,70,774/- made by the AO u/s 69B of the Income Tax Act, 1961 as unexplained expenditure.

4. On the facts and circumstances of the case as well as in law, the Learned Commissioner of Income Tax (Appeals), NFAC, has erred in upholding the disallowance of Rs. 2,87,00,000/- under Section 37(1) of the Act on account of provision for civil interior work, despite the fact that 2 Nayan Real Estate Pvt. Ltd. the appellant had already suo moto disallowed 30% of the expense under Section 40(a)(ia).

5.

Under the circumstances the Appellant has been denied a reasonable opportunity to present its case.

6.

The order under appeal is not only bad in law and invalid, but also against the principles of natural law of equity and justice.

7.

On the facts and circumstances of the case as well as in law, the learned Assessing officer erred in issuing notice u/s 143(2) of the Act dated 02/06/2023 without complying with the CBDT Instruction F.No.225/157/2017/ITA-II dated 23.06.2017. Hence the notice issued u/s 143(2) is not valid as per law and hence the entire assessment proceedings u/s 143(3) of the Act are ipso facto without jurisdiction and liable to be quashed.

8.

On the facts and circumstances of the case as well as in law, the notice u/s 143(2) is also invalid on the ground that it was not issued by "prescribed authority that is Assistant Commissioner of Income Tax/ Deputy Commissioner of Income Tax (International Taxation),Circle- 1(1)(1), Delhi as per CBDT notification dated 28/05/2022 9. The appellant craves leave to add, to amend, alter/delete and/or modify the above revised grounds of appeal on or before the final hearing.

2.

From the order of Ld. CIT(A), it is observed that similar grounds of appeal were raised before him. During the appeal proceedings before Ld. CIT(A), the appellant was given three opportunities to substantiate his case. But, the appellant did not respond to any of these notices and hence the appeal was dismissed by Ld. CIT(A).

3.

Aggrieved by the order of Ld. CIT(A), the appellant filed an appeal before ITAT with the grounds of appeal as mentioned above. During the hearing proceedings before the ITAT, Ld. AR of the appellant, Mr. Pavan Ved has appeared virtually and pleaded that due to certain unavoidable circumstances, the appellant could not furnish the details and did not respond to the notices sent by Ld. CIT(A). He has pleaded that the appellant may be given one more opportunity to explain his case before Ld. CIT(A).

4. Ld. DR opposed the plea of appellant.

3 Nayan Real Estate Pvt. Ltd.

5. Heard both sides and perused the orders of Ld. AO and Ld. CIT(A). After the hearing, the Bench decided to remand the issue back to the file of Ld. CIT(A) for decision afresh by giving liberty to appellant for raising any ground(s) as emanates from the orders passed by authorities below. This decision is taken in view of the fact that the Ld. CIT(A) has not passed the order on merits which is not correct in view of the decision of Hon'ble Bombay High Court in the case in Premkumar Arjundas Luthra [(2017) 297 CTR 614]. But the appellant is directed to cooperate with the Ld. CIT(A) in disposing the appeal expeditiously.

6. The appeal of appellant is allowed for statistical purposes.

Order pronounced in the open Court on 25/07/2025.

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