IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-II NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .No.-4636/Del/2015 (ASSESSMENT YEAR-2009-10) Manish Nayyar, Vs ACIT, 16/46, Subhash Nagar, Circle-45(1), Delhi-110027. Civic Centre, PAN-AAKPN4073C New Delhi (APPELLANT) (RESPONDENT) I.T.A .No.-4638/Del/2015 (ASSESSMENT YEAR-2009-10) Surinder Nayyar, Vs ACIT, 16/46, Subhash Nagar, Circle-45(1), Delhi-110027. Civic Centre, PAN-AAJPP5723G New Delhi (APPELLANT) (RESPONDENT) Assessee by Sh.K.Sampath, Adv. & Sh. Sh.V.Raja Kumar, Adv. Revenue by Ms. Anima Barnwal, Sr.DR Date of Hearing 02.08.2016 Date of Pronouncement 30.09.2016 ORDER Both these appeals are being decided by common order as identical issues are agitated by two different assessee s in present appeals. ITA No.4636/Del/2015 has been filed by assessee assailing correctness of order dated 15.05.2015 of CIT(A)-15 pertaining to 2009-10 AY; ITA No.4638/Del/2015 has also been filed by assessee pertaining to same assessment year assailing correctness of identical order passed by very same authority on very same date. grounds raised by these two different assessee s are identical. For ready-reference, grounds from ITA No.4636/Del/2015 are reproduced hereunder:- I.T.A .No.-4636 & 4638/Del/2015 1. On facts and in circumstances of case and in law Ld.CIT(A) erred in confirming validity of proceedings u/s 147/148 of Income Tax Act, 1961 which due to inherent deficiency, defects and fallacy ought to have been quashed. 2. Without prejudice to foregoing Ld.CIT(A) erred in confirming 9% rate of return which being arbitrary and without any basis ought to be quashed and rate as returned by Appellant ought to be directed to be adopted and applied. 2. Ld.AR inviting attention to material available on record submitted that in both years, Assessing Officer solely to enhance profit rate re-opened cases after issuance of notice. exercise of power challenged in appeal it was submitted was dismissed by CIT(A) holding that issues whether reasons were communicated to assessee or not is academic. It was submitted that on these above facts alone assessee is confident that relief was allowable, however he would also like to bring certain other facts on record namely that assessee is registered Government contractor under Class IV B&R with MCD/CPWD and as per CPWD/contractee s requirement; he has to employ one diploma engineer for supervision of work allotted to him. Because of this, direct expenses of assessee are increased. In circumstances, 6% profit rate it was submitted was justified. It was also submitted that Assessing Officer in AY 2007-08 has accepted net profit @7% in assessee s own case. 3. It was his submission that whereas AO has applied rate of 12%, CIT(A had reduced it to 9% holding that partly assessee is right and AO is right. However, it was his submission admittedly facts and circumstances of assessee remains same over years and as per past history of assessee on issue where admittedly books of accounts have not been maintained and assessee continues to be contractor of same class in year under consideration also rate of 7% accepted by tax authorities should be accepted. Accordingly it was his submission that Page 2 of 4 I.T.A .No.-4636 & 4638/Del/2015 even if assessee for peace of mind does not want to contest re-opening, facts remains that profit rate of 7% has been accepted by Revenue. Inviting attention to impugned order dated 15.05.2015 it was his submission that Paper Book page 19 to 22 would show that AO in 2013-14 AY by his order u/s 143 dated 05.02.2016 has accepted tax rate of 7% of net profit gross profit. Accordingly, it was his prayer that for verifying that fact matter may be restored directing appropriate relief on verification. 4. Ld.Sr.DR, Ms.Anima Baranwal vehemently argued that it is duty of assessee to file and maintain books of accounts accordingly argument that net profit rate accepted in past must be applied does not make any sense. 5. Having heard submissions and perused material available on record. I find that though assessee after challenging jurisdiction proceedings to focus his prayer to acceptance of tax rate accepted by Revenue in assessee s own case, however I find that ground assailing jurisdiction has not been given up or withdrawn. Since challenge remains on record, it cannot be ignored. Considering challenge and grievance it is deemed appropriate to set aside impugned order on grounds that conclusion arrived at by CIT(A) cannot be upheld. duty of communicating reasons is important step, it cannot be circumvented. reasons for re-opening have to be communicated and if challenged that there is no communication it cannot be brushed aside as academic issue. issue is restored back to CIT(A) with direction to first decide jurisdictional issue and then if need be proceed to merits of additions. It may not be out of place to make it clear that incase estimates are resorted to then exercise is to be undertaken as per settled legal principles. Courts Page 3 of 4 I.T.A .No.-4636 & 4638/Del/2015 have been categorical in holding that if estimate had to be restored then assessee s own past history can generally be best guide and incase of inapplicability of same then comparison with identically situated persons, during same time, within area is best judge. Needless to say evidence collected and applied has to be confronted to assessee. Accordingly, in view of these obvious deficiencies and shortcoming in orders under challenge issues are restored to file of CIT(A) with direction to pass speaking order in accordance with law after giving assessee reasonable opportunity of being heard. 6. In result, appeals of assessee are allowed for statistical purposes. order is pronounced in open court on 30th of September, 2016. Sd/- (DIVA SINGH) JUDICIAL MEMBER Amit Kumar Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Page 4 of 4 Manish Nayyar v. ACIT, Circle-45(1), New Delhi