DEPUTY COMMISSIONER OF INCOME TAX (CENTRAL), SRINAGAR vs. M/S STAR TRADERS, SRINAGAR

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ITA 105/ASR/2025Status: DisposedITAT Amritsar03 February 2026Bench: SHRI MANOJ KUMAR AGGARWAL (Accountant Member), SHRI UDAYAN DASGUPTA (Judicial Member)4 pages

AI SummaryDismissed

Facts

The assessee, M/s Star Traders, engaged in cross-border trade, faced an ex-parte assessment under Section 153A read with Section 144 of the Income Tax Act, 1961, following a search. The Assessing Officer made additions for unexplained purchases and estimated profits on export and domestic sales due to the assessee's non-compliance and failure to produce books of accounts. The CIT(A) set aside the assessment for a fresh assessment.

Held

The Income Tax Appellate Tribunal upheld the CIT(A)'s decision to set aside the assessment for a de novo fresh assessment. The tribunal agreed that the CIT(A) was justified in invoking the amended provisions of Section 251(1) given the ex-parte nature of the original assessment and the lack of assessee representation at earlier stages. The tribunal did not express any opinion on the merits of the additions.

Key Issues

The key legal issue was whether the CIT(A) was justified in setting aside an ex-parte assessment for fresh assessment under Section 251(1) without deciding the case on merits, especially when the assessee had not appeared at any stage.

Sections Cited

Section 153A, Section 144, Section 250, Section 251(1), Section 132, Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘DB’ AMRITSAR

Before: SHRI MANOJ KUMAR AGGARWAL & SHRI UDAYAN DASGUPTA

Hearing: 02.02.2026Pronounced: 03.02.2026

O R D E R Per Udayan Dasgupta, J.M.:

This appeal is filed by the revenue against the order of the ld. CIT (A) – 5 Ludhiana, dated 24.12.2024 passed u/s 250 of the Income Tax Act, 1961 (henceforth the Act) which has emanated from the order of the DC/ACIT Central Circle, Srinagar, dated 31.03.2022 passed u/s 153A rws 144 of the Act.

In course of hearing there was no appearance by the assessee or his counsel on repeated calls, but considering the issues involved and A.Y. 2013-14 2 the grounds contained we proceed to dispose off this appeal after hearing the Ld DR.

The Ld DR submitted that in the instant case assessment has been completed exparte u/s 153A, in pursuance of a search carried out on 02/09/2020 u/s 132 of the Act, and in absence of any return being filed in response to notices issued u/s 153A and in absence of any representation by the assessee to various notices subsequently issued, income has been determined at Rs. 9.26 crores (which included additions on account of unexplained purchase u/s 69C Rs.7.99 crores, plus an addition of Rs.63.93 lakhs being estimated profits on export sales calculated @ 8% of gross plus Rs. 63.61 lakhs being profits calculated @ 8% on unaccounted domestic sales).

The matter carried in appeal has been set aside to the files of the AO for fresh assessment, by the Ld CIT(A) by invoking the amended provisions u/s 251(1), considering the fact that the assessment has been completed u/s 144 of the Act.

The revenue has come up in appeal before the tribunal against the said order of the Ld CIT(A) on the ground that the Ld first appellate authority has not decided the issue on merits and was not justified in setting aside the assessment order. A.Y. 2013-14 3 6. We find from records that the assessee is engaged in cross border trade ( barter basis - LOC trade ) and there has not been a single representation by the assessee at any stage before the AO and no books of accounts has been produced and the entire purchase for the year has been considered as income plus addition on account of estimated profits generated from export and import of goods under barter system @ eight percentage has been added back, both ways on sales as well on purchase.