ABDUL SAMAD,CHENNAI vs. ACIT, CENTRAL CIRCLE -1(1), CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-16, Chennai, dated 29.03.2023 relevant to the assessment year 2009-10.

Brief facts of the case are that the assessee has filed his return of income on 29.09.2009 admitting income at ₹.3,60,990/-. Subsequently, a search and seizure operation under section 132 of the Income Tax Act, 1961 [“Act” in short] was carried out in the case of M/s. S.S. Hyderabad Biryani Pvt. Ltd., Old No. 35, 1st Floor, Amman Koil Street, Near Chicken Market, Broadway, Chennai. Consequent to search operation, the Assessing Officer has received information from the DDIT(Inv.), Unit-3(2), Chennai vide his letter dated 09.03.2016. On verification of the said information, the Assessing Officer has noticed that in the case of the assessee, the income has escaped assessment for the assessment year 2009-10 and a notice under section 148 of the Act was issued after recording the reasons for reopening of assessment. The assessee, has not filed the return of income in response to notice under section 148 of the Act nor furnished any reply to the notices issued under section 142(1) of the Act. Therefore, the Assessing Officer proposed to show-cause the assessee as to why the assessment should not be completed under section 144 of the Act at an estimated profit of ₹.92,15,673/-. In reply, the AR of the assessee, vide his letter dated 01.12.2016, objected to the estimation of profit. After considering the explanation of the assessee, the Assessing Officer has completed the assessment under section 144 r.w.s. 147 of the Act dated 16.12.2016 by assessing income of the assessee at ₹.95,76,663/- after making addition of undisclosed profit on undisclosed sales of ₹.92,15,673/-. On appeal, the ld. CIT(A) confirmed the assessment order.

On being aggrieved, the assessee is in appeal before the Tribunal. When the appeal was taken up for hearing, the ld. counsel for the assessee has submitted that in the grounds of appeal, the assessee has raised a legal issue of reopening of assessment, which is not valid and to further strengthen, the assessee filed a petition under Rule 11 of the ITAT Rules, 1963, seeking permission to file additional grounds of appeal. The ld. counsel further submitted that the ld. CIT(A) has not passed detailed order and simply confirmed the assessment order. Thus, the ld. counsel prayed that the entire matter may be remitted back to the file of the ld. CIT(A) for fresh adjudication and passing detailed order.

On the other hand, the ld. DR relied on the orders of authorities below.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. So far as the legal issued raised by the assessee with regard to reopening of assessment is concerned, the assessee has not raised such ground before the ld. CIT(A) and therefore, the ld. CIT(A) has not adjudicated the legal issue. Considering the petition under Rule 11 of the ITAT Rules, 1963 filed by the assessee and also raising legal issue in the grounds of appeal before the Tribunal, to meet the ends of natural justice, we are of the opinion that the assessee shall raise the legal issue before the ld. CIT(A) and the ld. CIT(A) may adjudicate and pass order in accordance with law.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 06th March, 2024 at Chennai.