PRINCESS INFRA & DEVELOPMENT LLP,KOTA vs. ACIT-CENTRAL CIRCLE-KOTA , KOTA

That on the facts and circumstances of the case and in law, the Id. CIT(Appeal) has grossly erred in not considering the fact that the assessment order was never served upon the assessee appellant and it came to the knowledge of the appellant when they got the copy from the Income-tax department.

That on the facts and circumstances of the case and in law, the Id. Assessing Officer has grossly erred in passing ex-parte assessment order under section 144 read with section 153C of the Act without providing sufficient opportunity of being heard, which is against the principal of natural justice and is illegal and bad in law.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officergrossly erred in making additions in the absence of any incriminating materials found during the course of search and the additions are made beyond the search material which is illegal, bad in law and void ab initio.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officer grossly erred in making an addition under section 68 of the Act on account of unsecured loan of Rs.8,10,00,000/- after treating the same as unexplained cash credits.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officergrossly erred in making an addition u/s 68 of the Act on account of partners capital introduced of Rs.10,00,000/- after treating the same as unexplained cash credits.’’

That on the facts and circumstances of the case and in law, the Id. CIT(Appeal) has grosslyerred in not considering the fact that the assessment order was never served upon the assessee appellant and it came to the knowledge of the appellant when they got the copy from the Income-tax department.

That on the facts and circumstances of the case and in law, the id. Assessing Officer hasgrossly erred in passing ex-parte assessment order under section 144 read with section 153B(1)(b) of the Act without providing sufficient opportunity of M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA being heard, which is against the principal of natural justice and is illegal and bad in law.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officergrossly erred in making additions in the absence of any incriminating materials found during the course of search and the additions are made beyond the search material which is illegal, bad in law and void ab initio.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officergrossly erred in making an addition of Rs. 10,90,73,795/- under section 56(2)(X) of the Act on account difference between DLC rate and Purchase amount of the property purchased by the assessee appellant during the year under consideration.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officer grosslyerred in disallowing total expenses of Rs. 66,48,590/- claimed by the assessee in the profit and loss account and made addition thereof.

That on the law and in the facts and in the circumstances of the case the learned Assessing Officergrossly erred in making an addition of Rs. 15,51,935/- after disallowing the provisions and liabilities shown by the assessee appellant.’’

1 At the outset of hearing of hearing both the appeals of the assessee, the Bench noticed that there is delay of 147 days in respective appeals for which the assessee has filed applications dated 01-08-2025 for condonation of delay in filing the respective appeals. The prayers as made by the assessee as to condonation of delay in both the appeals are similar and thus contents mentioned in the condonaton application for the assessment year 2016-17 are reproduced hereunder for the sake of convenience and brevity of the case. M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA ‘’In the matter of appeal of M/s PRINCESS INFRA & DEVELOPMENT LLP, Kota, 59-5, VALLABH NAGAR, KOTA for the Assessment Year 2016-17. PAN AARFP7322F Application for condenation of delay u/s 253(5) of the Income Tax Act, 1961 read with section 5 of Limitation Act in filling of appeal

Furthermore, during the said period, the appellant was also facing significant personal and logistical challenges, including restricted mobility, mental stress, and absence of access to adequate legal assistance. These cumulative factors created practical impediments in reviewing and responding to the communication in a timely manner. The appellant assures this Hon'ble Authority that the delay is neither deliberate nor motivated, and respectfully seeks a condonation of delay in the interest of justice and fair opportunity

That subsequently the impugned order came to the knowledge of the assessee appellant. Thereafter, the assessee appellant contacted Shri Siddharth Ranka, Advocate to file appeal against the order dated 21.10.2024. On his opinion, without any further delay, at the first opportunity, the assessee with the help of his counsel has filed this appeal before the Hon'ble Income Tax Appellate Tribunal, Jaipur Bench, Jaipur with delay.

An Affidavit duly sworn in this regard is also enclosed herewith.

Ground No. 1 of appeal relates to passing ex-parte assessment order under section 144 read with section 153C of the Act.

1 At the time of passing of assessment order u/s 144 rwis 153C of the Income tax Act, 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under-

Assessee is a firm and derives income from business

Notice u/s 153C of the LT. Act was issued to the assessee on 27.09.2019, which was duly served to the assessee.

Assessee firm has not filed in response to notice u/s 153C. However, assessee firm has earlier filed its return u/s 139(1) of the Act on 31.03.2017 at the total income of Rs. Nil.

Further, notice u/s142(1) was issued on 28.11.2019 to assessee requesting to file return of income. However no reply has been filed by the assessee bill date

2 During the appellate proceedings the A/R of the appellant filed written submissions dated on 16.10.2024. The same are reproduced as under:

Vide Finance Act 2024, an amendment brought in sub-section (1) in clause (a) of section 251 of the Income-tax Act 1961, the following provisio has been inserted with effect for the 1stday of October 2024 namely M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA ‘’Provided thatwhere such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment

That in the present case also the ld. Assessing Officer passed Ex-parte assessment vide order dated 27.12.2019 under section 144 of the Act hence the aforesaid proviso of section 251(1)(a) of the Act is applicable in the instant case also. We are enclosing herewith an order passed by a CIT (Appeals) NFAC following the similar provision.

Ground No. 2 of appeal relates to addition made in absence of any incriminating material.

1 The submissions of the appellant during the appellate proceedings are reproduced as under:

Ground No. 3 and 4 of appeal relates to addition under section 68 of the Act on account of unsecured loan of Rs. 8,10,00,000/- and partners capital introduced of Rs. 10,00,000/- after treating the same as unexplained cash credits

1 At the time of passing of assessment order u/s 144 r.wis 153C of the Income tax Act, 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under-

2 The submissions of the appellant during the appellate proceedings are reproduced as under:

The last Ground of Appeal is that the appellant craves leave to add, alter modify or amend any ground on or before the date of hearing

1 The appellant has not added, altered, modified or amended any of the abovementioned grounds of appeal on or before the date of hearing. Accordingly such mention by the appellant in its ground is treated as general in nature, no needing any specific adjudication and is accordingly treated as disposed of.

The appellant stated that this appeal is against an order of assessment made under section 144 therefore the assessment order may set aside and refer the case back to the Assessing Officer for making a fresh assessment.

In the result, the appeal of the appellant is treated as dismissed without admission as discussed in para 2.3 of this order.’’ M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA 3.3 Apropos to the grounds of appeal of the assessee in ITA No.859/JP/2025 for the assessment year 2018-19, it is noticed that the ld.CIT(A) has dismissed the appeal of the assessee on the ground of not filing the appeal before him within time provided by the statute. The narration so made by the ld.CIT(A) in his order from para 4 to para 13 is reproduced as under:- ‘’4. The brief facts of the case are that the appellant Mis Princess Infra & Development LLP 59-B. Vallabh Nagar, Kota it's an Firm. The Appellant Firm derives income from infrastructure/construction business during the year under consideration. A search & seizure operation under section 132(1) of the Income-tax Act, 1961 (hereinafter "the Act") was Carried out on 07.09.2017 at the various premises of "Resonance Group, Kota," to which the appellant belongs Cash, Jewellery and other documents found and seized from some persons residence and business premise. The case of the appellant was also covered under search proceeding Consequent to search action, the case of the appellant was centralized to Central Circle-Kota by Pr Commissioner of Income-tax, Kota. Appellant firm has filed its return u/s 139(1) of the Act on 29.10.2018 at NIL income and revised return on 30.03.2019 at the total income of Rs. Nil. Notice u/s 143(2) of Act was issued by the AO on 27.09.2019 which was duly served. Further, notice under sub section (1) of Section 142 of the Act was issued by the AO on 28.11.2019 along with questionnaire/Annexure-A requiring certain details/information, which was served upon the appellant.

Ground No. 1 of appeal relates to passing ex-parte assessment order under section 144 read with section 153B(1)(b) of the Act.

1 At the time of passing of assessment order u/s 144r w.s 153B(1)(b) of the Income tax Act, 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under:-

Assessee firm has filed its retum u/s 139(1) of the Act on 29.10.2018 at NIL income and revised return on 30.03.2019 at the total income of Rs. Nil.

Notice u/s 143(2) of the IT Act was issued to the assessee on 27.09.2019, which was duly served to the assessee. M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA 5. Further, notice under sub section (1) of Section 142 of the Act was issued on 28.11.2019 along with questionnaire/Annexure-A requiring certain details/information, which was served upon the assessee. However no reply has been filed by the assessee till date.

Finally a show cause notice was issued to the assessee on 10.12.2019 asking why your case should not be finalized u/s 144 of the IT Act, based on information available on record. No response has been received till today. Therefore, there is no other option available than to pass order u/s 144 of the IT Act"

2 During the appellate proceedings the A/R of the appellant filed written submissions dated on 16.10.2024. The same are reproduced as under:

The aforesaid newly inserted provision has extended the power of CIT(Appeals to set aside the Ex parteassessment order passed under section 144 of the Act

That in the present case also the ld. Assessing Officer passed Ex-parte assessment vide order dated 27.12.2019 under section 144 of the Act. hence the aforesaid proviso of section 251(1)(a) of the Act is applicable in the instant case also. We are enclosing herewith an order passed by a CIT(Appeals), NFACfollowingthe similar provision

Ground No. 2 of appeal relates to addition made in absence of any incriminating material.

1 The submissions of the appellant during the appellate proceedings are reproduced as under: M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA

Ground No. 3 of appeal relates to addition of Rs. 10,90,73,795/- under section 56(2)(X) of the Act on account difference between DLC rate

1 At the time of passing of assessment order u/s 143(3) r.w.s 153B(1)(b) of the Income tax Act, 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under:-

2 The submissions of the appellant during the appellate proceedings are reproduced as under:

Ground No. 4 of appeal relates to disallowing total expenses of Rs. 66,48,590/-claimed by the assessee in the profit and loss account

1 At the time of passing of assessment order u/s 143(3) r.w.s 153B(1)(b) of the Income tax Act, 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under:-

2 The submissions of the appellant during the appellate proceedings are reproduced as under:-

Ground No. 5 of appeal relates to addition of Rs. 3,76,70,000/- under section 68 of the Act after treating unsecured loans as unexplained cash credits

1 At the time of passing of assessment order uls 143(3) rws 1538(1)(b) of the Income tax Act, 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under:-

2 The submissions of the appellant during the appellate proceedings are reproduced as under:-

Ground No. 6 of appeal relates to addition of Rs. 15,51,935/- after disallowing the provisions and liabilities shown by the assessee.

1 At the time of passing of assessment order u/s 143(3) rw.s 1538(1)(b) of the Income tax Act 1961 the AO has briefly stated relevant facts and some of excerpts are reproduced as under:- M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA

2 The submissions of the appellant during the appellate proceedings are reproduced as under:-

The last Ground of Appeal is that the appellant craves leave to add, alter. modify or amend any ground on or before the date of hearing.

1 The appellant has not added, altered, modified or amended any of the above mentioned grounds of appeal on or before the date of hearing. Accordingly such mention by the appellant in its ground is treated as general in nature, no needing any specific adjudication and is accordingly treated as disposed of.

The appellant stated that this appeal is against an order of assessment made under section 144 therefore the assessment order may set aside and refer the case back to the Assessing Officer for making a fresh assessment.

In the result, the appeal of the appellant is treated as dismissed without admission as discussed in para 2.3 of this order.’’

4 During the course of hearing of both the appeals, the main grievance of the ld.AR of the assessee is that the ld. CIT(A) has dismissed the appeals of the on the ground of delay without providing an opportunity to file an application for condonation of delay which is against the principles of natural justice and also submitted that the AO had passed ex-parte orders [i.e. u/s 144 read with Section 153C and other u/s 144 r.w.s. 153B(1)(b) in the respective appeals] without providing sufficient opportunity of being heard to the assessee and thus both the appeals may kindly be restored to the file of the AO for afresh adjudication by providing one more opportunity of being heard to the assessee. 3.5 On the other hand, the ld. DR supported the orders of the lower authorities and further vide letter No. CIT(DR-1)ITAT/JPR2025-26/698 dated 18-09-2025 filed the comments / report received form DCIT, Central Circle, Kota as to ITA Nos. 858 & 859/JPR/2025, for consideration. The report obtained from Shri D.S. Meena DCIT, Central Circle-Kota in respect of denial of receipt of DAK in the case of M/s. Princess Infra & Development LLP is reproduced as under:- ‘’(Office of the Dy.Commissioner of Income-tax,Central Circle-Kota) M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA Room No,. 212, IIndFloor,C.R. Building, Rawat Bhata Road, Kota

Further, the notice u/s 142(1) of the Act was issued electronically to the assessee on 28/11/2019, but the same was not delivered through mail. Therefore, the notice u/s 142(1) of the Act was again issued electronically on 10/12/2019 which was also not delivered through mad. Therefore, the said notice u/s 142(1) of the Act dated 10/12/2019 was also sent through speed post No. ER250834075IN dated 11/12/2019 on the returned address of the assessee i.e.59-B. Vallabh Nagar, Kato. The said notice u/s 142(1) of the Act dated10/12/2019 was returned by the postal department to this office on 12/12/2019 with remarks "लेनेसेइनकार" (Copy enclosed)

Further, the assessment order u/s 143(3) of the Act dated 27/12/2019 as well as computation & demand notice was sent electronically through mail but the same was not delivered through mail. Therefore, the assessment order u/s 143(3) of the Act dated 27/12/2019 as well as computation & demand notice was also sent to the returned address of the assessee i.e. 59-B, Vallabh Nagar, Kota vide speed post no. ER652341806IN dated 30/12/2019. The assessment order u/s 143(3) of the Act dated 27/12/2019 as well as computation & demand notice dated 27/12/2019 was returned by the postal department on 31/12/2019 with remarks ""लेने से इनकार" (Copy enclosed). M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA

That I am the partner of the assessee appellant firm and assessed to tax vide PAN No.: AFFPS2134B and appellant of the case.

That the Id. Assessing Officer passed the impugned order dated 27.12.2019 under section 143(3) of the Act and sent the same through speed post to the assessee’s registered address, however the same was not delivered to the assessee appellant and returned back with “Refused” remark.

That the assessee appellant LLP firm was incorporated on 10.03.2016 with its registered address at 59-B, Vallabh Nagar, Kota and the same address was mentioned in the appellant’s income tax returns. Subsequently, due to loss in its business the assessee appellant has closed its office situated at 59-B, Vallabh Nagar, Kota. M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA

That the assessee appellant submits that although the ld. Assessing Officer has rightly sent the notices and assessment order dated 27.12.2019 during the assessment proceedings mentioning assessee’s address as per record, however due to shift of the registered office the same got either unserved or returned with “refused” remark by some person not known to the assessee.

That the assessee appellant further humbly submits that the assessee appellant is law abiding citizen and always ready to comply with the notices and order passed by the department. The humble assessee seeks sincere apology for earlier submitting the non- delivery of impugned assessment order as this facts also came to the assessee after the ld. CIT appeal seeks report on the service of the order passed by the ld. Assessing officer.

The appellant assures this Hon’ble Authority that assessee appellant shall be vigilant for further proceeding and humbly prayed for one more opportunity for the assessment proceeding. 3.8 From the submissions of the affidavit of the assessee, it emerges out as under:- ‘’3. That the assessee appellant LLP firm was incorporated on 10.03.2016 with its registered address at 59-B, Vallabh Nagar, Kota and the same address was mentioned in the appellant’s income tax returns. Subsequently, due to loss in its business the assessee appellant has closed its office situated at 59-B, Vallabh Nagar, Kota.

That the assessee appellant submits that although the ld. Assessing Officer has rightly sent the notices and assessment order dated 27.12.2019 during the assessment proceedings mentioning assessee’s address as per record, however due to shift of the registered office the same got either unserved or returned with “refused” remark by some person not known to the assessee.

9 We have heard both the parties and perused the materials available on record.The Bench noted that it is an admitted fact that the assessee is ex-parte before the AO and also before the ld. Addl. CIT(A) relating to both the appeals. It is also noteworthy to mention that the assessee due to loss in business closed its office situated at 59-B, Vallabh Nagar, Kota and he M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA did not receive the assessment orders (supra) passed by the AO and thus the delay took place in filing the appeals before the ld.CIT(A). Hence, the assessee could not put forth his defence. It was the bounded duty of the assessee to appear before the statutory authorities as and when called for. It is noticed that various opportunities were provided to the assessee for settling the issue but the assessee remained lethargic and unserious in pursuing his case for which a cost of Rs.5,000/- in each case is imposed upon the assessee which will be deposited by the assessee in the Prime Minister Relief Fund. However, we are of the view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeals of the assessee for the assessment year 2016-17 and 2018-19 are allowed for statistical purposes. 3.10 Before parting, the Bench makes it clear that its decision to restore both the matters back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. M/S. PRINCESS INFRA & DEVELOPMENT LLP, KOTA VS ACIT, CENTRAL CIRCLE, KOTA 4.0 In the result, both the appeals of the assesseeare allowed for statistical purposes as indicate hereinabove. Order pronounced in the open court on 10 /10/2024. ¼jkBksM deys'kt;UrHkkbZ ½