PNC Kanpur Highways Limited vs The DCIT, 19(1), Delhi

PER RAMIT KOCHAR, AM:

This appeal in ITA No. 555/Del/2026 for Assessment Year: 2018-19 has arisen form the learned CIT(A) appellate order u/s 250 dated 20.11.2025 in DIN & Order No: ITBA/NFAC/S/250/2025-26/1082823414(1), which in turn has arisen from the assessment order dated 06.09.2021 passed by the AO u/s 143(3) r.w.s 144B of the Income Tax Act, 1961 (hereinafter called “the Act”), for Assessment Year 2018-19 in DIN ITBA/AST/S/143(3)/2021-22/1035318192(1).

Brief facts of the case are that the assessee filed its return of income u/s 139 declaring income of Rs.1,26,04,490/- on 14.09.2018. The case was selected by Revenue for framing complete scrutiny. During the course of assessment proceedings , Statutory Notices were issued by the AO to the assessee u/s 143(2) and 142(1) of the 1961 Act. Four SCN’s were also issued by the AO to the assessee. The details are recorded in assessment order at page 2. Personal hearing was also granted by AO to the assessee, through video conferencing. The assessee participated in the assessment proceedings The assessee is engaged in an engineering and infrastructure construction business formed as SPV to carry the work of two laning of paved shoulders of Kanpur-Kabrai section of NH-86 in the state of U.P.. The AO made additions to the tune of Rs.17,20,89,411/- to the returned income of the assessee.

Aggrieved , the assessee filed first appeal with ld. CIT(A) , who dismissed the appeal of the assessee. The ld. CIT(A) issued as many as four notices to the assessee, but the same were not responded by the assessee, which led to the dismissal of the appeal filed by the assessee mainly for the reasons that the assessee did not participated in the first appellate proceedings before ld. CIT(A), wherein the assessment order passed by the AO was upheld by ld. CIT(A).

Still aggrieved, the assessee has now filed second appeal with the Tribunal. The ld. Counsel has moved an application dated 20.05.2026 for adjournment, and also simultaneously prayed in the adjournment application that in view of principles of natural justice, the matter may be restored back to the file of ld. CIT(A) for denovo adjudication of appeal of the assessee. The adjournment application stood rejected by the Bench. It is one of the grounds of appeal raised by the assessee before the Tribunal, that the assessee has not received any notices from ld. CIT(A). It is stated in grounds of appeal that correct email id is on record with department but despite this no notices issued by ld. CIT(A) was received by the assessee.

We have considered rival contentions and perused the material on record. We have observed that the assessee filed its return of income u/s 139 declaring income of Rs. 1,26,04,490/- , on 14.09.2018. The case was selected by Revenue for framing complete scrutiny. During the course of assessment proceedings , Statutory Notices were issued by the AO to the assessee u/s 143(2) and 142(1) of the 1961 Act. Four SCN’s were also issued by the AO. The details are recorded in assessment order at page 2. Personal hearing was also granted by department to the assessee through video conferencing. The assessee participated in the assessment proceedings The assessee is engaged in an engineering and infrastructure construction business formed as SPV to carry the work of two laning of paved shoulders of Kanpur-Kabrai section of NH-86 in the state of U.P.. The AO made additions to the tune of Rs. 17,20,89,411/- to the returned income of the assessee. The assessee being aggrieved filed first appeal with ld. CIT(A). During appellate proceedings, the ld. CIT(A) issued four notices dated 06.11.2023, 04.01.2024, 31.01.2024 and 14.07.2025 to the assessee. There was no response from the assessee. The ld. CIT(A) dismissed the appeal of the assessee by upholding the additions made by the AO vide assessment order . The assessee has denied having received the aforesaid notices claimed to be issued by ld. CIT(A), in the grounds of appeal raised before ITAT. The ld. CIT(A) has not mentioned the details of service of notices in his appellate order. The ld. CIT(A) dismissed the appeal of the assessee. It is observed that ld. CIT(A) has not made any independent enquiry as is contemplated u/s 250(4) before upholding assessment order. It is also observed that ld. CIT(A) has not even called for assessment records. The ld.CIT(A) is required and obligated to pass appellate order in compliance with the provisions of section 250(6), as ld. CIT(A) is required to pass reasoned and speaking order on merits in accordance with law. Reference is drawn to provisions of Section 250(6), wherein ld. CIT(A) has to state point for determination, his decision and reasons thereof. The principles of natural justice are breached . The ld. CIT(A) is not toothless as his powers are co-terminus with the powers of the AO, which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by ld. CIT(A) and did not file the requisite details/documents to support his contentions. Thus, the assessee is equally responsible for its woes as the assessee did not comply with the notices issued by the AO as well ld. CIT(A). Both the parties are ad-idem that the matter can go back to the file of ld. CIT(A) for denovo adjudication of the appeal of the assessee. Keeping in view the entire factual matrix as culled out above in this order, it will be fair to both the parties as well in the interest of justice, that the appellate order passed by ld. CIT(Appeals) be set aside and the matter be remanded back to the file of ld. CIT(Appeals) for fresh adjudication after giving proper opportunity of being heard to both the parties .The assessee is directed to comply with the notice issued by ld. CIT(Appeals) during the appellate proceedings in set aside remand proceedings, otherwise ld. CIT(A) shall be free to decide the appeal ex-parte on merits in accordance with law, after complying with provisions of Section 250(6). We clarify that we have not commented on merits of the issues. Thus, the appellate order passed by ld. CIT(A) is set aside and matter is restored back to the file of ld. CIT(A) for fresh adjudication. The appeal of the assessee is allowed for statistical purposes. We order accordingly.

In the result,the appeal filed by the assessee is allowed for statistical purposes.