Digitally 2025:CGHC:28357-DB signed by SISTA SISTA SOMAYAJULU NAFR SOMAYAJULU Date:

2025.07.01

14:50:35 HIGH COURT OF CHHATTISGARH AT BILASPUR +0530 TAXC No. 33 of 2023 {Arising out of order dated 29-8-2022 passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur in ITA No.108/RPR/2018}

The Assistant Commissioner of Income Tax, Central-2, Raipur, Chhattisgarh ... Appellant versus Shri Sunil Kumar Agrawal, Near Girls College, Sewa Kunj Road, Raigad, Chhattisgarh ... Respondent For Appellant : Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Chaudhari, Standing Counsel for the Income Tax Department. For Respondent : Mr. Anand Dadariya, Advocate.

Division Bench: -

Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Deepak Kumar Tiwari, JJ.

Judgment on Board (27/06/2025)

Sanjay K. Agrawal, J.

1. The substantial question of law involved, formulated and to be answered in this tax appeal preferred under Section 260A of the Income Tax Act, 1961 (for short, ‘the IT Act’) states as under: -

“Whether in view of the fact that the assessee before the Settlement Commission had voluntarily accepted 10% NP and when there is no change in the business and the modus operandi, the learned ITAT committed an error of law in not accepting 10% NP for the assessment year

2014-15 also?”

2. The aforesaid substantial question of law has to be answered in the following factual backdrop: -

3. The Income Tax Officers conducted a survey under Section 132 of the IT Act in the Radheshyam Agrawal Group, Raipur/ Raigarh to which the assessee/respondent herein is a member and during the course of search, apart from case, several incriminating documents were found and seized from the residential and business premises of the assessee. In order to complete the assessment proceedings for the block period assessment year 2006-07 to 2011-12, notice under Section 153A of the IT Act was issued and served upon the assessee and also notice under Section 143(2) of the IT Act was issued relating to the assessment year 2012-13. Thereafter, the assessee along with three other persons of the group filed Settlement Applications before the Income Tax Settlement Commission (ITSC), Additional Bench, Kolkata and the ITSC passed order under Section 245D(4) of the IT Act on 28-9-2015 and has determined the total income and total tax liabilities in the case of the assessee for the block period assessment year 2006-07 to 2012-13 and the rate of net profit was further enhanced by the assessee to the extent of 10% by submitting a letter dated 18-9-

2015 which was ultimately accepted by the ITSC.

4. Thereafter, on 23-3-2015, the assessee has filed his return of income for the assessment year 2014-15 declaring total income at ₹ 6,65,13,730/- and on 31-8-2015, the case of the assessee was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS) and notice under Section 143(2) of the IT Act was issued and served upon the assessee. Ultimately, on 29-11- 2016, show cause notice was issued to the assessee to show cause as to why the net profit @ 10% of the gross contract receipts during the financial year relevant to the assessment year under consideration should not be adopted, which the assessee replied competently and finally, on 29-12-2016, assessment order under Section 143(3) of the IT Act was passed determining total income at ₹ 13,25,03,140/- holding 10% of the net profit of total gross contract receipts. The assessment order was challenged by the assessee before the CIT (Appeals) and the CIT (Appeals) by order dated 28-3-2018 partly allowed the appeal and deleted the resultant addition of ₹ 6,59,89,410/- holding net profit at 5.37% of the gross contract receipts. Feeling aggrieved and dissatisfied against the order of the CIT (Appeals), the Revenue has preferred appeal before the ITAT which the ITAT has dismissed by the impugned order dated 29-

8-2022 leading to filing of the instant tax appeal in which the substantial question of law has been formulated which has been project