SHRI HARIOM JEE RICE MILL,ROHTAS vs. ACIT,CENTRALCIRCLE-1, PATNA

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ITA 72/PAT/2023Status: HeardITAT Patna09 December 2025AY 2018-194 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The ITAT admitted the legal issues raised by the assessee concerning the validity of the notice under Section 143(2), the assessment proceedings under Section 143(3) without a Section 127 order, and the alleged absence of mandatory show cause notices. The Tribunal held that these issues arose from the assessment record and went to the root of the matter, and that an assessee is at liberty to raise any legal issue before any appellate authority for the first time, even if not raised before lower authorities. The ITAT relied on the decisions in Jute Corporation of India Ltd. vs CIT, National Thermal Power Co. Ltd v. CIT, and PCIT vs. Britannia Industries Ltd. Since these issues were not adjudicated by the first appellate authority, the ITAT restored the additional grounds to the file of the learned CIT(A) with a direction to decide them after affording a reasonable opportunity of hearing to the assessee and considering the relevant facts. The Tribunal did not decide the merits of the additions or the applicability of Section 115BBE or the interest charges. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Shri Hariom Jee Rice Mill, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Patna Bench, against the order of the Commissioner of Income-tax (Appeals) [CIT(A)], Patna-3, dated 23.11.2022, for the Assessment Year (AY) 2018-19. The assessee had revised its grounds of appeal. The ITAT noted that the assessee raised legal issues regarding the assessment proceedings and additions made, which were not adjudicated by the first appellate authority. The Tribunal decided to admit these legal issues as they arose from the assessment record and went to the root of the matter. The ITAT relied on Supreme Court and Calcutta High Court decisions to admit these additional grounds.

What were the issues?

1. Whether the notice issued under Section 143(2) of the Income Tax Act, 1961, dated 24.09.2019, by the Income Tax Officer (ITO), Ward-3(4), Sasaram, was valid, considering alleged non-compliance with CBDT Instruction F.No.225/157/2017/ITA-II dated 23.06.2017 and CBDT Instruction No. 01/2011 dated 31.01.2011. 2. Whether the assessment framed under Section 143(3) by the Additional Commissioner of Income-tax (ACIT), Central Circle-1, Patna, was invalid due to the absence of an order under Section 127 of the Act by the competent authority, and whether the migration of the PAN based on a CBDT letter without a transfer order under Section 127 was arbitrary and void ab initio. 3. Whether the additions made by the Assessing Officer and confirmed by the CIT(A) were void ab initio and bad in law due to the absence of a mandatory show cause notice. 4. Whether the addition of Rs. 9,23,530/- on account of cash found during survey was arbitrary and bad in law. 5. Whether the addition of Rs. 3,73,62,593/- on account of alleged difference of stock was arbitrary and bad in law. 6. Whether the addition of Rs. 8,26,04,367/- on account of goods of farmers found in the assessee's premises was arbitrary and bad in law. 7. Whether the invocation of Section 115BBE of the Act was arbitrary and bad in law, and whether the CIT(A) erred in not adjudicating this ground. 8. Whether the charging of interest under Sections 234A, 234B, and 234C was erroneous, particularly concerning the applicability of Section 234A when the return was filed under Section 139(1) before the due date, and whether the CIT(A) erred in not adjudicating the ground related to Section 234B. Assessee's Contention: The assessee argued that the notice under Section 143(2) was invalid due to non-compliance with CBDT instructions. The assessment was invalid due to the absence of a Section 127 order for PAN migration. Additions were made without mandatory show cause notices and were arbitrary. Interest under Sections 234A and 234B was wrongly charged. The assessee relied on CBDT instructions and Supreme Court/High Court decisions. Revenue's Contention: The judgment does not record any specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 143(3),Section 127,Section 115BBE,Section 234A,Section 234B,Section 234C,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA

Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM

For Appellant: Shri Vishal Kr. AR
For Respondent: Shri Md. AH Chowdhary, DR
Hearing: 27.11.2025Pronounced: 08.12.2025

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Patna-3 (hereinafter referred to as the “Ld. CIT(A)”] dated 23.11.2022 for the AY 2018-19.

2.

The assessee has revised and concise the grounds of appeal which are as under:-

“1. For that the revised grounds of appeal hereto are without prejudice to each other.

2. For that the Assessment Order as passed is bad in law and fit to be quashed in view of following legal issues / grounds:- (i) For that the learned ITO, W-3(4), Sasaram erred in issuing notice u/s 143(2) of the Act dated 24.09.2019 without complying to 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. (ii) For that the assessment has been framed u/s 143(3) by learned ACIT, Central Circle-1, Patna without issue of notice u/s 143(2) of the Act. notice u/s 2.2. Since, the issue raised before us is not raised before the first appellate authority by the assessee therefore, this additional ground is restored to the file of the learned CIT (A) with a direction to decide the same after affording reasonable opportunity of hearing to the assessee and also after taking into account the facts relating to these issues. Accordingly, the appeals of the assessee are allowed for statistical purposes.

3.

In the result, the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 08.12.2025.

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