Loading judgment…
Facts
The assessee, a civil and road contractor, filed an appeal against the order of the CIT(A) which upheld the assessment order passed ex parte u/s 144 of the Income Tax Act, 1961. The assessee contended that the assessment order and the CIT(A)'s order were passed without adequate opportunity and proper consideration of evidence and submissions.
Held
The Tribunal observed that the assessment order was passed ex parte and the CIT(A) did not discuss the merits of the case, violating the principles of natural justice and the requirements of Section 250(6) of the Act. Therefore, the Tribunal set aside the orders of both the AO and the CIT(A).
Key Issues
Whether the assessment order and the CIT(A)'s order were passed in violation of natural justice and without proper consideration of evidence and submissions, and whether the matter should be remanded for fresh assessment.
Sections Cited
144, 250(6), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 27.12.2024, I.T.A. No.: 77/PAT/2025 Assessment Year: 2017-18 Brijesh Kumar. which has been passed against the assessment order u/s 144 of the Act, dated 28.12.2019. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. The order of the CIT(A) in dismissing the appeal is illegal and biased.
The order of the A.O. has been passed in a haste to avoid time barring on 28.12.2018 without allowing the assessee adequate opportunity to produce evidences and other details. The assessment by the A.O. has been done summarily on the basis of audited figures and without imparting natural justice to the assessee and therefore, fit for remanded back for fresh verification in light of the evidences and submissions filed before A.O. and CIT(A).
The CIT(A) has dismissed the appeal without examining the replies and evidences treating them as additional evidences and simply on the basis of A.O.'s order, dismissed the appeal which is again a violation of natural justice.
In view of the ad hoc 10% expenditure in contract work disallowed Rs. 61,19,226/-, forfeiture of deduction claimed under Chapter VI-A Rs. 1,45,316/- and cash deposited during the demonetization period Rs. 14,00,000/- aggregating to Rs. 76,64,582/- which were added to the total income, is requested to be deleted.”
Brief facts of the case are that the assessee is a civil contractor and also a road contractor. The return was filed showing total income of ₹59,96,120/-. The case was selected for scrutiny on account of large turnover shown in the ITR but the Audit Report in Form-3CD was not filed. It is stated in the Statement of Facts that the assessee appeared on designated date and filed written submission, yet the assessment had been made u/s 144 of the Act without considering the submissions filed on 28.12.2019. A sum of ₹14 Lakh deposited in the bank account maintained with Allahabad Bank was added u/s 69A of the Act and further disallowance was made @10% of various expenses claimed and the deduction claimed under Chapter VI-A was also denied. Aggrieved I.T.A. No.: 77/PAT/2025 Assessment Year: 2017-18 Brijesh Kumar. with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who did not consider the request of the assessee to admit the evidence filed and dismissed the appeal as no evidence was filed before the Assessing Officer (hereinafter referred to as Ld. 'AO').
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before us stating that the Ld. CIT(A) did not consider the submissions and on ad-hoc basis observed that fresh evidences uploaded at the time of appellate proceeding cannot be admitted and has dismissed the appeal.
Rival contentions were heard and the submissions made have been examined. In the course of the hearing before us, the Ld. AR submitted that assessment order is ex parte and the Ld. CIT(A) has also not discussed the merits of the case and the written submissions filed were also not considered and natural justice has been denied to the assessee. The assessment order was getting time barred on 31.12.2019, the notice was received on 01.12.2019 and the second notice was received on 12.12.2019, yet an ex parte order was passed. It was submitted that the reasons mentioned are not correct as Audit Report was filed within the extended date. The assessee is a contractor and had shown profit of 5.1% which is reasonable in this line of business, yet 10% of the various expenses claimed were disallowed and the net profit works out to about 12%. Before the Ld. CIT(A), the assessee had filed the paper book but the same was not admitted under Rule 46A of the Income Tax Rules, 1962 and our attention was drawn to page 3 of the order of the Ld. CIT(A) where it is mentioned in para 4 that the assessee had uploaded the submission in the appeal portal. The Ld. AR submitted that the matter may be remanded back to the Ld. AO for I.T.A. No.: 77/PAT/2025 Assessment Year: 2017-18 Brijesh Kumar. imparting justice and verification of the evidences and submissions filed and to pass a speaking order.
The Ld. DR did not have any serious objection to this request of the Ld. AR.
We have considered the rival submissions. Since the assessment order is ex parte and the Ld. CIT(A) has not also discussed the merits of the case, in the interest of justice and fair play it was considered that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. In this respect, it is relevant to examine the provisions of section 250(6) which are reproduced as under: “250(6) – The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.”
Thus, section 250(6) of the Act casts a duty on the Ld. CIT(A) to pass an order in appeal which should state the points for determination and the decision as well as the reason for arriving at such decision. In the present case before us, the Ld. CIT(A) has not mentioned the reasons after examining the records while disposing of the appeal. The Ld. CIT(A) has neither adjudicated upon various grounds of appeal nor has passed a reasoned order for arriving at the decision, as is required u/s 250(6) of the Act. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) as well as the order of the Ld. AO and remit the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek I.T.A. No.: 77/PAT/2025 Assessment Year: 2017-18 Brijesh Kumar. unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 6th August, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 06.08.2025 Bidhan (Sr. P.S.) I.T.A. No.: 77/PAT/2025 Assessment Year: 2017-18 Brijesh Kumar. Copy of the order forwarded to:
Brijesh Kumar, Chauria Tola Dhumnagar, Nautan, West Champaran, Bihar, 845459. 2. DC/AC, Circle-1, Muzaffarpur.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Patna Bench, Patna.
Guard File. //// By order