AHEMAD IKBAL DALVANI,RAJKOT V. INCOME TAX OFICER, WARD-1, MORVI., RAJKOT

ITA 342/RJT/2024

AI Insights

The case involves Ahemad Ikbal Dalvani, a transport booking agent, who appealed against the order of the Learned Commissioner of Income Tax (Appeals) regarding the assessment year 2013-14. The AO had reopened the assessment based on service tax returns and treated the income from service as business income, making an addition of Rs. 2,75,96,879. The CIT(A) dismissed the appeal due to non-compliance by the assessee, who was bedridden and unaware of the proceedings. The ITAT noted the non-compliance and the medical condition of the assessee but emphasized the need for a fair hearing and thus remitted the case back to the AO.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472614 (ITAT-RAJKOT)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 16-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: DIGANT KYADA
• Keywords: Set aside; Business income; Reopening of assessment; Principle of natural justice
• Section: 147; 148; 144; 142(1)

Judgement Text

" आयकर अपीलȣय अͬधकरण,राजकोट Ûयायपीठ, राजकोट। IN THE INCOMETAXAPPELLATE TRIBUNAL, RAJKOT BENCH: RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER And SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No. 342/RJT/2024 (Ǔनधा[रण वष[/Assessment Year: (2013-14) Ahemad Ikbal Dalvani, 17, First Floor, Krishna Complex, Sanala Road, Nr. Ram Chowk, Morvi-363641 Vs. The ITO, Ward-1, Morbi èथायी लेखा सं./जीआइआरसं./PAN/GIR No.: ASEPD6870F (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Appellant by : Shri Digant Kyada, A.R. राजèव कȧ ओर से/Respondent by : Shri Abhimanyu Singh Yadav, Sr. D.R. सुनवाई कȧ तारȣख/ Date of Hearing : 08/10/2024 घोषणा कȧ तारȣख/Date of Pronouncement : 15 /10/2024 आदेश / O R D E R PER SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals) [in short, “the Ld. CIT(A)”], National Faceless Appeal Centre (in short “NFAC”), Delhi order dated 20.03.2024 for assessment year 2013-14. 2. The assessee has raised the following grounds of appeal:- “1 Reopening of Assessment a. Initiation of Action u/s. 148 of the Act is totally illegal and invalid and order passed based on such illegal notice deserves to be quashed and the same may kindly be quashed. 2. Exparte Assessment a. The learned AO in so far as he assessed the appellant u/s. 144 of the Act is totally bad on facts as also in law. 3. Business Receipts Page | 2 ITA No.342/RJT/2024 A Y:2013-14 a. The learned AO grievously erred on facts as also in law in treating the income from service of Rs. 2,75,96,879/- as business income and making addition of the same. The addition is made in total disregards to the facts of the case and submissions made and totally unjustified on facts as also in law and deserves to be deleted and may kindly be deleted.” 3. The appellant, an individual, is assessed to tax by National Faceless Assessment Centre (hereinafter referred to as the AO). He is a transport booking agent. More particularly explained that when a supplier wants to hire a goods vehicle to transport the goods, he contacts the appellant and the appellant immediately contacts to the transporter i.e. vehicle owner. The vehicle owner collects goods from the place of supplier and transports at the destination specified by supplier. The appellant pays the amount received from supplier to the transporter after retaining his commission which is normally Rs. 100 per vehicle per trip. The appellant is eligible for fixed commission only and for this reason he is a transport booking agent. For convenience, the suppliers pay the transportation charges to the appellant The appellant pays the service tax on behalf of the transporters. As commission income of the appellant was much below the basic exemption limit, return of income for the year under consideration was not fled. On the basis of service tax returns filed by the appellant, the assessment was reopened by notice issued u/s 148 of the Income Tax Act. 1961 (hereinafter referred to as the Act) dated 29.07.2022. Later on the AO issued notices u/s. 142(1) of the Act. During the course of assessment proceedings the appellant clarified the facts and furnished his financials before the AO on 26.01.2023. Suddenly he got neck pain with left upper limb radiating paid and numbness upto index finger. Due to this critical medical situation the doctors advised him for complete bed rest. As the appellant was completely bedridden, he was not aware of any of the notices and no further compliances could be made. However as the appellant was bedridden, he was not having knowledge of passing of order. Recently after receipt of recovery notice he enquired about the Page | 3 ITA No.342/RJT/2024 A Y:2013-14 status of assessment proceedings and found that the order has been passed. The AO, vide order u/s. 147 r.w.s. 144 of the Act dated 18.05 2023 assessed the total income at Rs.2.75,96,879/- wherein he treated the income from service of Rs. 2.75.96.879/- as business income and making addition of the same. 4. Feeling aggrieved by the assessment order dated 18-05-2023, the assessee filed appeal before in the office of ld. CIT(A). The ld. CIT(A) has disposed of the appeal with under mentioned remarks:- “It is clear that the Appellant is not aggrieved with the reassessment order impugned herein and is not interested in pursuing the same. Accordingly, the additions/disallowance as challenged in the Grounds of Appeal and in the Appeal Memo are hereby confirmed. The Last ground of appeal is always reserved for adding/altering/amending and/or substituting any or all grounds of appeal before the taking place of actual hearing or even in course of the hearing , if the situation so warrants. Since the appellant has nothing to say on this, This ground of appeal is dismissed as \"not pressed\" In view of the appellant's total non-compliance during appeal proceedings, I find it extremely difficult to adjudicate on the appeal for want of adequate submission and clarification, counter-clarification. In the result, the appeal is dismissed.” 5. The assessee preferred an appeal before the ITAT, Rajkot. The ld. A.R. that the assessee is not much familiar with the computer and its application so he could not get due attention on the email id sent by the Department However, the ld. CIT(A) has issued notice wherein time for compliance was granted for 11 days. The assessee was serious and he submitted the medical document issued by the Atlantais Spine Hospital. The assessee was bed ridden and was not aware of the order and demand notice of the Department. On the contrary, the ld. DR has submitted that the assessee has partly complied with the notice issued by the AO during the course of assessment. So, it is not good to submit that assessee was not aware of email. Page | 4 ITA No.342/RJT/2024 A Y:2013-14 6. We have heard both the parties and we note that the assessee’s case under consideration the assessment was carried out u/s. 144 of the Act and the impugned order passed by the ld. CIT(A) ex-parte order and non- speaking order. Therefore, we do not wish to make any comment on the merits of the grounds raised by the assessee. We note that the ld. CIT(A) has not decided the issue in respect of the grounds raised by the assessee in memo of appeal as per mandate of provisions of section 250(6) of the Act. Hence, we are of the view that one more opportunity should be given to the assessee to plead his case before the AO. On account of non- complying attitude of the assessee, the cost of Rs. 5000/- is imposed on the assessee which need to be deposited in Prime Minister Relief Fund. We note that it is settled principle of natural justice and fair play requires that the affected party is to be granted sufficient opportunity of being heard to the assessee to contest his case. Therefore, we deem it fit and appropriate to set aside the order of ld. CIT(A) and remit the matter back to the file of AO to adjudicate the issue afresh on merit after giving reasonable opportunity of hearing to the assessee. The AO shall allow opportunity of hearing to the assessee. The assessee is directed to place all the relevant evidences at the earliest possible time before the AO as and when called for. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 15/10/2024 in the Open Court. S Sd/- Sd/- (DR. ARJUN LAL SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot TRUE COPY Ǒदनांक/ Date: 15/10/2024 Copy of the Order forwarded to Page | 5 ITA No.342/RJT/2024 A Y:2013-14 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6.Guard File. By Order, Assistant Registrar/Sr. PS/PS ITAT, Rajkot "