TIRUPATI MINERALS AND INDUSTRIES,NAGPUR vs. DCIT OR ACIT - DEPUTY OR ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2(1), NAGPUR, NAGPUR
Facts
A survey action under section 133A of the Act was conducted at the business premises of M/s. Tirupati Developers, leading to the impounding of documents. The Assessing Officer reopened the assessment under section 147, issuing notices under sections 148 and 142(1). Due to the assessee's non-response, an ex-parte assessment order was passed, making additions for unaccounted cash expenditure under section 69C.
Held
The Tribunal held that both the Assessing Officer and the CIT(A) passed ex-parte orders without deciding the grounds raised by the assessee on merits. As per section 250(6) of the Act, it is the duty of the CIT(A) to decide the appeal on merits. Therefore, the matter was restored to the Assessing Officer for a decision on merits after providing a reasonable opportunity of hearing to the assessee.
Key Issues
Whether the ex-parte orders passed by the lower authorities without deciding the appeal on merits were justified and if the matter should be remanded to the Assessing Officer for a decision on merits.
Sections Cited
133A, 147, 148, 142(1), 69C, 250(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC” BENCH : NAGPUR
Before: SHRI V. DURGA RAO
IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR “SMC” BENCH : NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER ITA.Nos.202, 203 & 204/NAG./2024 [E-APPEALS] Assessment Years 2017-2018, 2019-2020 & 2020-2021
The DCIT or ACIT, Deputy Tirupati Minerals and or Asst. Commissioner of Industries, 3rd Floor, NKY Income Tax, Central Circle- Towers, Ajni Square, vs. 2(1), BSNL RTTC Bldg. NAGPUR – 440 015. Communication Road, Maharashtra. Seiminary Hills, NAGPUR. PAN AAHFT0298C Maharashtra. PIN 440 006. (Appellant) (Respondent) For Assessee : Shri Suren Duragkar, C.A. For Revenue : Shri Abhay Y. Marathe, Sr. DR Date of Hearing : 27.01.2025 Date of Pronouncement : 28.01.2025 ORDER PER V. DURGA RAO, J.M. : The above three appeals filed by the assessee are directed against the separate orders all dated 22.02.2024, of the learned CIT(A)-3, Nagpur, relating to assessment years 2017-2018, 2019- 2020 and 2020-2021. Since common issues are involved in these appeals, these appeals were heard together and are being disposed
2 ITA.Nos.202, 203 & 204/NAG./2024 of by this single consolidated order for the sake of convenience and brevity. 2. Facts of the case, in brief, are that the assessee is a firm and had not filed it’s original return of income. A survey action u/sec.133A of the Act was conducted at the business of M/s. Tirupati Developers and certain incriminating documents related to the assessee were found and impounded. Therefore, the Assessing Officer reopened the assessment u/sec.147 of the Act by taking necessary approval from the competent authority. The Assessing Officer issued statutory notices u/sec.148 and 142(1) of the Act to the assessee. Since there was no response from the side of the assessee, the Assessing Officer passed ex-parte assessment order u/sec.147 r.w.s.144 of the Act by making addition of Rs.1 lakh each for assessment years 2017-2018 and 2019-2020 and Rs.5,10,000/- for the assessment year 2020-2021 u/sec.69C of the Act on account of unaccounted cash expenditure in the hands of the assessee. In appeal, the learned CIT(A) confirmed the addition made by the Assessing Officer in absence of any explanation from the side of the assessee.
3 ITA.Nos.202, 203 & 204/NAG./2024 3. Aggrieved by the order(s) of the learned CIT(A), the assessee is in appeal before the Tribunal contending, inter alia, that he was not having any business activity during the impugned assessment year(s). He submitted that the assessee firm is a partnership firm having partners viz., Mr. Prashant Bongirwar and Mr. Rahul Upganlawar with Mr. Ashish Belorkar who are common partners in firm “Tirupati Minerals and Industries [“Assessee”] and “Tirupati Developers” [Searched Firm]. He submitted that the amounts in question were paid by M/s. Tirupati Developers on behalf of the partners. He, therefore, submitted that the impugned addition u/sec.69C of the Act is not warranted in the hands of the assessee and prayed that the addition(s) made for the impugned assessment years should be deleted. 4. The Learned DR on the other hand relied on the orders of the lower authorities. He submitted that despite numerous opportunities granted by the lower authorities, the assessee failed to substantiate it’s case and as such the orders of the lower authorities are in accordance with law and be confirmed. 5. I have heard the rival submissions made by both the orders and perused the material on record. I find that the authorities
4 ITA.Nos.202, 203 & 204/NAG./2024 below has passed ex-parte order(s) without deciding the grounds raised by the assessee on merits. As per sec.250(6) of the Act, it is the bounden duty of the learned CIT(A) to decide the appeal on merits by giving reasons for decision and adjudication thereof, even assessee did not appear before him. Since both the lower authorities passed the impugned ex-parte order(s), I deem it fit and appropriate in the larger interest of justice to restore the matter in issue back to the file of Assessing Officer to decide the issue on merits, by providing reasonable opportunity of being heard to the assessee. I made it clear that it is the assessee’s risk and responsibility to plead and prove it’s case in consequential proceedings without taking any adjournment under any pretext, failing which, the Assessing Officer is at liberty to pass order as per fact and law. I hold and direct accordingly. 6. In the result, all the three appeals of the assessee are allowed. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 28.01.2025. Sd/- (V. DURGA RAO) JUDICIAL MEMBER Nagpur, Dated 28th January, 2025 VBP/-
5 ITA.Nos.202, 203 & 204/NAG./2024
Copy to 1. The appellant 2. The respondent 3. The CIT(A), Nagpur concerned 4. The CIT, Nagpur concerned 5. The D.R. ITAT, Nagpur SMC-Bench, Nagpur 6. Guard File.
//By Order// True Copy Sr. Private Secretary : ITAT : Nagpur Bench NAGPUR.
