ABHIJIT SHARAD PHADKE,THANE V. NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT

ITA 406/MUM/2025

AI Insights

The case involves Abhijit Sharad Phadke, who appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, which upheld a significant addition of Rs. 74,83,717 to his income for the Assessment Year 2022-23. This addition was initially made by the Assessing Officer under section 144 of the Income Tax Act, 1961, due to non-compliance and non-submission of audited books of accounts despite a large turnover. The Tribunal found merit in giving the assessee another opportunity to present his case and directed the CIT(A) to consider the additional evidence provided.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473996 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2022-2023
• Other Referred Cases: Navinchandra N. Majithia vs State of Maharashtra & Ors
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: SUDHIR HUNNARGIKAR
• Keywords: Additional evidence; Principle of natural justice
• Section: 144; 44AB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI. OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 406/Mum/2025 (Assessment Year: 2022-23) Abhijit Sharad Phadke A 804, Azziano, Rustomjee Urbania, Mumbai Nashik Highway – 400601. Vs. National Faceless Assessment Centre 2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi – 110003. PAN/GIR No. ABQPP1034N (Assessee) : (Respondent) Assessee by : Shri. Sudhir Hunnargikar Respondent by : Shri. Ram Krishn Kedia, (SR. DR) Date of Hearing : 04.03.2025 Date of Pronouncement : 04.03.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2022-23. 2. The assessee has raised the following grounds of appeal: “GROUND NO 1 – CIT(A)NFAC erred in confirming Unjustified Huge Addition of Rs. 74,83,717 U/s144 only upon dictum VIGILANTIBUS ET NON DORMIENTIBUS JURA SUB VENIUNT, Appellant relies upon Supreme Court’s well settled judgement in Navinchandra N. Majithia vs State of Maharashtra & Ors Held- it is true that the pristine maxim Vigilantibus Non Dormientibus Jura Subveniunt (Law assists those who are vigilant and not those who sleep over their rights). But even a vigilant litigant is prone to commit mistakes. As the aphorism to err is human is more a ITA No. 406/Mum/2025 (A.Y. 2022-23) Abhijit Sharad Phadke 2 practical notion of human behavior than an abstract philosophy, the unintentional lapse on the part of a litigant should not normally cause the doors of the judicature permanently closed before him. THE EFFORT OF COURT SHOULD NOT BE ONE OF FINDING MEANS TO PULL DOWN SHUTTERS OF ADJUDICATORY JURISDICTION before a party who seeks justice, on account of any mistake committed by him, BUT TO SEE WHETHER IT IS POSSIBLE TO ENTERTAIN HIS GRIEVANCE IF IT IS GENUINE. GROUND NO 2 – The Learned CIT Appeals NFAC erred in confirming the unjustified huge addition of Rs. 74,83,717 made U/s 144 of the IT Act, 1961 without considering the Relevant Genuine Material Facts & the legal provisions of the Issue on which the Addition to the Assessment was based like Non-Availability of Tax Audit Report etc and the Material Credible Evidence of the Actual Fact of the transactions of Trading in Derivatives (Futures & Options) with a LOSS of Rs. 39,245/- & TURNOVER of Rs. 9,35,46,466/-, which is below Rs. 10 Crores U/s 44AB of the Act. The Actual Turnover of the Transactions of Derivatives according to the 8th edition of Guidance Note of ICAI is Rs. 1,42,810/- [As per the Certificate attached of the ICICI Direct (Broker)].” 3. Briefly stated, the assessee is an individual and had filed his return of income dated 29.07.2022, declaring total income at Rs. 23,93,560/- and business loss of Rs. 39,245. The assessee’s case was selected for scrutiny for verifying ‘large turnover but books of accounts not audited u/s. 44AB’ of the Act. Statutory notices were duly issued and served upon the assessee. It is observed that the assessee has been non-compliant throughout the assessment proceeding and the learned Assessing Officer ('ld. A.O.' for short) vide order dated 27.02.2024, passed u/s. 144 r.w.s. 144B of the Act, being the best judgment assessment, determined total income at Rs. 98,77,277/-, after making addition of Rs. 74,83,717/-. 4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 19.11.2024, upheld the addition made by the ld. AO, for the reason that the assessee had been non-compliant before the ld. CIT(A). ITA No. 406/Mum/2025 (A.Y. 2022-23) Abhijit Sharad Phadke 3 5. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 6. We have heard the rival submissions and perused the materials available on record. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee had ‘sufficient cause’ for his non-appearance before the lower authorities and prayed that the assessee may be given one more opportunity to present his case before the first appellate authority. The ld. AR further contended that the additional evidence filed by the assessee before the ld. CIT(A) is also to be considered and had stated that the same has been filed in the paperbook at page no. 21 to 27. 7. The learned Departmental Representative ('ld. DR' for short) for the revenue vehemently opposed to setting aside the issue back to the lower authorities for the reason that the assessee has constantly been non-compliant before the lower authorities inspite of various opportunities provided. 8. Upon considering the rival contentions, we are of the considered view that the assessee may be given one more opportunity by admitting the additional evidences filed by the assessee as per Rule 46A of the Income Tax Rules, 1962 and the ld. CIT(A) is directed to consider the same and decide the issue on the merits of the case. We also deem it fit to levy a cost of Rs. 5,000/- for recalcitrant attitude of the assessee in not being compliant before the lower authorities and the same is to be paid within 30 days of receipt of the order to the Prime Minister Relief Fund. We therefore remand all these issues back to the file of the ld. CIT(A) by adhering to the principles of natural justice and in the interest of justice dispensation. ITA No. 406/Mum/2025 (A.Y. 2022-23) Abhijit Sharad Phadke 4 9. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 04.03.2025 Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 04.03.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "