What did the Tribunal hold?

The tribunal held that the CIT(A) was not justified in enhancing the income without issuing a notice to the assessee. The tribunal also found the Assessing Officer's estimation of 8% to be reasonable.

The assessee's income was estimated at 8% by the Assessing Officer. The CIT(A) enhanced this estimation to 25% without issuing a notice to the assessee. The assessee appealed this enhancement.

What were the issues?

Whether the CIT(A) was justified in enhancing the gross profit ratio without issuing a notice to the assessee, and whether the enhancement was reasonable.

Sachin Shankar Agnihotri, Wardha vs ACIT | ITAT Nagpur 2024

Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR

Before: SHRI V. DURGA RAO

For Appellant: Ms. Alfia Rozie

For Respondent: Shri Sandipkumar Salunke

Since the issue raised by the assessee in both these appeals are common, except variation in figures, therefore, as a matter of convenience these appeals were heard together and are being disposed off by way of this consolidated order. The common ground raised by the assessee in both the years under consideration is as under:–

2 Shri Sachin Shankar Agnihotri “1. Whether on the facts and circumstances of the case, the learned Commissioner of Income Tax appeals was justified in enhancing the gross profit ratio from 8% as estimated by the Assessing Officer to 25% while passing the appellate order, without providing a rationale for doing so. 2. The appellant craves leave to add or alter any other grounds that may be taken at the time of hearing.”

I have heard both the sides, perused the records and gone through the order passed by the authorities below. I find that the Assessing Officer estimated the income of the assessee @ 8% and accordingly the assessment was completed. On appeal, the learned CIT(A) enhanced the estimation made by the Assessing Officer from 8% to 25% without issuing notice to the assessee. According to me, if at all the learned CIT(A) wanted to enhance the income assessed by the Assessing Officer, it was mandatory for the learned CIT(A) to issue notice to the assessee. In this case, no such notice was issued by the learned CIT(A) to the assessee. Apart from this, I also find that the estimation made by the Assessing Officer @ 8% is found to be reasonable and no enhancement was required by the learned CIT(A) further. Accordingly, the addition made by the Assessing Officer has to survive. In view of the above, I set aside the impugned order passed by the learned CIT(A) and delete the enhancement made by the learned CIT(A) by upholding order passed by the Assessing Officer for the assessment year 2018–19 and 2019–20.

In the result, appeals filed by the assessee for the assessment year 2018–19 and 2019–20 are partly allowed. Order pronounced in the open Court on 20/12/2024

SACHIN SHANKAR AGNIHOTRI,WARDHA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1), NAGPUR, NAGPUR

What did the Tribunal hold?

What were the facts?

What were the issues?

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