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Facts
A survey u/s 133A was conducted, leading to the assessee's case being selected for scrutiny. The assessee failed to furnish required details, prompting the Assessing Officer to estimate income at 8% of contract receipts. The assessee appealed to the CIT(A), who dismissed it for non-prosecution.
Held
The Tribunal noted that an identical issue was decided in the assessee's own case. It was held that even in cases of non-prosecution, appeals should be decided on merits. The CIT(A)'s order was set aside, and the matter was restored for reconsideration with an opportunity for the assessee to be heard.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without deciding on merits, and whether the estimation of income by the AO was appropriate.
Sections Cited
133A, 143(2), 142(1)
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Income Tax Appellate Tribunal, Hyderabad ‘ DB-A ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
(िनधा�रण वष�/Assessment Year: 2018-19) M/s Shilpa Electrical Infra Vs. ACIT Tech India Limited Central Circle 3(2) Hyderabad Hyderabad PAN:AALCS7808Q (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri P. Vinod, Advocate राज� व �ारा/Revenue by:: Shri SV Siva Prasad, Sr. AR सुनवाई की तारीख/Date of hearing: 13/08/2025 घोषणा की तारीख/Pronouncement: 20/08/2025 आदेश/ORDER
Per Vijay Pal Rao, Vice President
This appeal by the assessee is directed against the order dated 10/03/2025 of the learned CIT (A)-Hyderabad-11, for the A.Y.2018-19.
The assessee has raised the following grounds of appeal:
Brief facts of the case are that a survey u/s 133A of the Act was conducted in the case of the assessee on 02/04/2019 in connection with the search proceedings in the case of Shri TVS Maheshwar Rao in which the books of account of the assessee were impounded. Subsequently, the case was selected for scrutiny under CASS and statutory notices u/s 143(2) and 142(1) of the Act were issued. Finally, in response to a reminder notice and furnished the financials and other details of nature of business conducted. The assessee is engaged in erection, installation, fabrication and line work for generators, repairs and maintenance of electrical transformers etc., however,
Page 2 of 5 did not furnish bills and vouchers, details of expenditure incurred, details of TDS etc., as required for completing the assessment. Since there was no response from the assessee, the Assessing Officer proceeded to estimate the income of the assessee at 8% of contract receipts which was worked out to Rs.3,06,50,792/- after reducing the income declared in the return of income @ Rs.1,36,46,690/-. Thus, the Assessing Officer completed the assessment and an amount of Rs.1,72,03,832/- was added to the returned income of the assessee.
Aggrieved, the assessee preferred an appeal before the learned CIT (A) who dismissed the appeal of the assessee for non- prosecution.
Before the Tribunal, the learned Counsel for the assessee submitted that the estimation of income of the assessee at 8% of the turnover in the present case is erroneous and unsustainable in law, as the assessee is a sub-contractor and cannot earn more than 3% as income on the sub-contract turnover.
On the other hand, the learned DR submitted that despite several notices, the assessee failed to appear before the learned CIT (A) and the learned CIT (A) has rightly dismissed the appeal of the assessee for non-prosecution. He has relied upon the orders of the authorities below.
We have considered the rival contentions as well as the relevant material available on record. We find that an identical issue has been decided by the Tribunal in assessee’s own case for the A.Y 2021-22 in dated 13/08/2025 in para No.7 as under: “7. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. Learned Counsel for the Assessee submitted that, the learned CIT(A) has passed ex-parte order without considering the issues involved on merits, contrary to settled principle of law that, even in the case of non-prosecution by the assessee, the appeal should be disposed of on merits on the basis of available material on record. We find that, the learned CIT(A) dismissed the appeal filed by the assessee for non-prosecution by following certain judicial precedents i.e., decision of Hon’ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs., Commissioner of Wealth Tax [1997] 223 ITR 480 (MP) and the decision of ITAT, Delhi in the case of CIT vs., Multiplan India Ltd., [1991] 38 ITD 320 (Del.). However, not considered the issue on merits. No doubt, the assessee did not appear and filed relevant details when the case was posted for hearing. Learned Counsel for the Assessee explained the reasons for not appearing. According to the Learned Counsel for the Assessee, the Director of the appellant-company was fell sick and due to his ill-health, the appellant company could not respond to various notices issued by the learned CIT(A). However, non-appearance before the learned CIT(A) is neither willful nor for any undue benefit. In our considered view, the reasons given by assessee appears to be bonafide and acceptable. Since, the learned CIT(A) has dismissed the appeal for non-prosecution, without considering the issues on merits, in our considered view, the matter needs to go back to the file of learned CIT(A). Thus, we set-aside the order of the learned CIT(A) and restore the issue back to the file of learned CIT(A) for reconsideration. The learned CIT(A) is directed to reconsider the issue, after providing one more opportunity of hearing to the assessee. Needless to say, the assessee shall appear before the learned CIT(A) and file relevant details as and when the case is posted for hearing.
Following the earlier order of this Tribunal in assessee’s own case, this issue is also set aside to the record of the learned CIT (A) for fresh adjudication after providing an appropriate opportunity of being heard to the assessee. The assessee is also directed to appear before the learned CIT (A) with all the relevant documents and evidences as and when called for by the learned CIT (A) without seeking adjournment. We order accordingly.
In the result, appeal filed by the assessee is allowed for statistical purposes.