Hardcore Infotech Pvt Ltd vs ACIT, Central Circle 13, Delhi: Appeal on Assessment Year 2017-18

Introduction

In a significant ruling by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘SMC’, the case between Hardcore Infotech Pvt Ltd, the appellant, and the Assistant Commissioner of Income Tax (ACIT), Central Circle 13, Delhi, the respondent, was brought to light…

Background of the Case

The appeal, bearing case number ITA 1652/DEL/2022, was filed by Hardcore Infotech Pvt Ltd, located in New Delhi, stemming from disputes related to the assessment year 2017-18…

…The scrutiny assessment process highlighted discrepancies requiring further examination, leading to the case’s progression to the ITAT for a more conclusive decision…

Case Analysis

Initially, the case was selected for scrutiny through the Computer Assisted Scrutiny Selection (CASS), following which various notices were sent to the appellant. The company, engaged in trading, dealing, investments in shares, securities, and functioning as a NBFC, declared an income of Rs.6,101 for the aforementioned assessment year…

…Subsequently, the assessment framed under section 143(3) of the Act determined the total income to be Rs.20,88,701, against which the appellant filed an appeal…

Arguments and Proceedings

During the hearing, no representative for the appellant was present, a fact that prompted the ITAT to proceed ex parte in regards to Hardcore Infotech Pvt Ltd. On behalf of the respondent, Senior D.R. Shri Om Prakash supported the order of the Assessing Officer (AO)…

…The tribunal deliberated on the nuances of the case, particularly the appellant’s contention that Section 40A(3) should not be applied towards barter transactions, a claim that was central to the appeal…

Judgment and Conclusion

In his final verdict, the Accountant Member, Sh. Anil Chaturvedi, highlighted the failure of the Commissioner of Income Tax (Appeals) to adjudicate the matter on its merits as mandated by Section 250(6) of the IT Act. It was also emphasized that the principles of natural justice demand offering sufficient opportunity of hearing to all parties involved. Consequently, the case was set aside to the CIT(A) for re-adjudication after ensuring the appellant is granted enough opportunity to present its case…

…With the restoration of the issue to the CIT(A), the appeal by Hardcore Infotech Pvt Ltd was allowed for statistical purposes, marking a notable decision in the annals of the ITAT’s jurisprudence…

Significance of the Ruling

The ruling underscores the imperative of procedural fairness and the necessity for adjudicatory bodies to consider cases on their merits, ensuring that all parties are accorded adequate opportunities to present their arguments. This case between Hardcore Infotech Pvt Ltd and ACIT, Central Circle 13, Delhi sets a precedent for how appeals, especially those dismissed without comprehensive evaluations on their merits, should be handled, thereby reinforcing the tenants of justice and fairness in the tax assessment and appeal process…

Hardcore Infotech Pvt Ltd vs ACIT, Central Circle 13, Delhi: Appeal on Assessment Year 2017-18