Salgaocar Mining Industries Pvt Ltd. Vs DCIT (ITAT Panaji)
Fresh Legal Challenge to Reopening Rejected; Revenue-Difference Addition Remanded on Natural Justice Grounds: ITAT Panaji
The Panaji Bench of the Income Tax Appellate Tribunal, Panaji Bench partly allowed the appeal of Salgaocar Mining Industries Pvt. Ltd. for AY 2006-07, admitting relief only on the ground of natural justice and remanding the issue of alleged difference in business receipts to the CIT(A) for fresh adjudication.
The assessee challenged a best judgment reassessment u/s 144 r.w.s. 147, wherein the AO had made additions of ₹87.62 lakh towards alleged undisclosed business receipts from group entities and ₹1.82 lakh towards excess depreciation, following the assessee’s persistent non-compliance in reassessment proceedings. The CIT(A) upheld the additions.
Before the Tribunal, the assessee sought to raise a fresh legal ground for the first time, contending that the reassessment was without jurisdiction u/s 147–151. The ITAT refused to admit this legal ground, holding that it did not arise from facts found by lower authorities, would require fresh factual examination, and could not be entertained merely by invoking NTPC. Reliance was placed on the Special Bench decision in All Cargo Global Logistics Ltd..
On merits, the Tribunal noted that the assessee had failed to file a return in response to notice u/s 148, repeatedly sought reasons, and adopted a non-cooperative and adversarial stance, justifying the AO’s recourse to section 144. Accordingly, no infirmity was found in the AO’s action per se.
However, on the limited issue of opportunity before the CIT(A), the ITAT held that although some opportunity was granted, the assessee’s plea that it was not afforded reasonable time to file reconciliation statements, ledger extracts and invoices could not be brushed aside. Relying on the Delhi High Court ruling in CIT v. Jansampark Advertising & Marketing (P) Ltd., the Tribunal held that first appellate proceedings must ensure effective adjudication on merits.
Accordingly, the ITAT:
