ITAT Quashes CIT(A)’s Order, Subject to Cost Payment of Rs 10,000
In a recent ruling, the Income Tax Appellate Tribunal (ITAT), Ahmedabad, quashed the CIT(A)’s order due to non-compliance by the company and directed a fresh hearing, subject to the payment of a Rs 10,000 cost to the Prime Minister’s National Relief Fund.
The assessee, IEC Projects Limited, filed its Income Tax Return (ITR) for the Assessment Year 2018-19, declaring the total income of Rs 3,96,870. During the assessment, the AO found that the assessee had made an investment of Rs 3,74,50,000 in 10,07,000 equity shares in the Company M/s Corrtech International Pvt. Ltd. On finding that this investment was not disclosed by the assessee, the AO treated it as unexplained and added the same to the income of the assessee. The AO also added Rs. 2,20,25,870 as estimated profit on contractual receipts of Rs. 27,53,23,377, applying a rate of 8% of gross receipts, but this amount was telescoped with the earlier addition. The total income was determined at Rs 3,78,76,873.
The assessee filed an appeal before the CIT(A); however, the same was rejected due to the non-compliance by the assessee. Therefore, the assesse filed an appeal before the Income Tax Appellate Tribunal (ITAT), Ahmedabad.
The assesse submitted that it was in Form No. 35, it had opted for a specific option that no notices and communication should be sent by mail given by the assesse. The assessee raised an argument that even after this, the notices were sent through e-mail communication, which was not accessed by the assessee and resulted in non-compliance before CIT(A).
The ITAT examined the case and observed that the CIT(A) had given three opportunities and the assessee had also responded to the second notice on 13.02.2025, requesting for adjournment. Therefore, the contention made by the assessee that the notices were not accessed through the e-mail was found incorrect. Due to the assessee’s misrepresentation and non-compliance before the CIT(A), the Tribunal levied a cost of Rs. 10,000 required to be paid to the Prime Minister’s National Relief Fund within 15 days.
However, since the CIT(A) did not decide the appeal on merits, the Tribunal set aside the order and sent the matter back to CIT(A) to decide afresh after giving the assessee one more opportunity, subject to the cost payment.
