ARPIT MINERALS (P) LTD,NEW DEWLHI vs. ITO WARD -3(2), NEW DELHI

ITA 7486/DEL/2025Status: DisposedITAT Delhi18 December 2025AY 2009-10Bench: SHRI VIKAS AWASTHY (Judicial Member)4 pages

AI SummaryRemanded

Facts

The Assessing Officer (AO) made an ex parte addition of Rs. 30,60,000/- to the assessee's income, alleging accommodation entries, after the assessee claimed non-service of notices issued under Section 148 and Section 142(1). The assessee challenged the validity of the Section 148 notice due to an incorrect PAN and non-service before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A), however, restored the matter to the AO for fresh examination on merits without deciding the legal issues concerning the notice's validity.

Held

The Tribunal held that the CIT(A) erred by not first adjudicating the legal issues raised by the assessee regarding the validity and service of the Section 148 and Section 142(1) notices. It directed the CIT(A) to pass a speaking order on these legal issues after affording the assessee a reasonable opportunity to make submissions, before considering the merits of the case. Consequently, the appeal was allowed for statistical purposes.

Key Issues

Whether the CIT(A) should first adjudicate legal challenges concerning the validity and service of notices issued under Section 148 and Section 142(1) of the Income Tax Act before restoring the matter to the AO for examination on merits.

Sections Cited

148, 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI

Hearing: 18/12/2025Pronounced: 18/12/2025

(A.Y.2009-10) Arpit Minerals (P) Ltd., M-544, 3rd Floor, Paschim Vihar, New Delhi 110087 ...... अपीलार्थी/Appellant PAN: AADCA-8341-C बिाम Vs. Income Tax Officer, Ward-3(2), ..... प्रनिवादी/Respondent New Delhi अपीलार्थी द्वारा/Appellant by : Shri Ankit Kumar, Advocate प्रधििािीद्वारा/Respondent by : Shri Keshav Kishor Anand, Sr. DR सुिवाई की निथर्थ/ Date of hearing : 18/12/2025 घोषणा की निथर्थ/ Date of pronouncement : 18/12/2025 आदेश/ORDER

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 05.10.2025, for Assessment Year 2009-10 2. The ld. Counsel for the assessee submitted that the legal grounds raised by the assessee in Form No. 35, challenging validity of the notice issued u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), have not been adjudicated by the CIT(A). The CIT(A) restored the matter to the Assessing Officer (AO) for fresh examination on merits. He further submitted that the notice issued under section 148 of the Act (placed at page no. 24 of the paper book) bears an incorrect PAN. It was contended that the said notice, as well as the (AY 2009-10) subsequent notices issued under section 142(1) of the Act were never served on the assessee, therefore, the assessee could not participate in the assessment proceedings. The AO, in ex parte proceedings, made addition of Rs. 30,60,000/- holding that the assessee had obtained accommodation entries. The assessee in appeal before the CIT(A) has challenged validity of the assessment proceedings on the ground of a defective notice issued under section 148 of the Act, as well as on merits.

After examining the impugned order, I find that the CIT(A) records submissions of the assessee, takes note of the legal grounds raised in the appeal and finally restore the case of assessee for fresh examination on merits. Whereas, the CIT(A) ought to have decided the legal issues raised in Ground Nos. 3 to 5 of the appeal before adverting to the merits of the case. Accordingly, the appeal is restored to the CIT(A) for adjudication of the aforesaid legal issues by passing a speaking order, after affording reasonable opportunity of making submissions to the assessee, in accordance with law.