ANIL PARMAR,MUMBAI V. ITO 20(1)(1), MUMBAI

ITA 2290/MUM/2025

AI Insights

The case involves Anil Parmar, the appellant, contesting the orders of the Income Tax Officer (ITO) and the National Faceless Appeal Centre (NFAC) regarding the assessment year 2010-11. The primary issues raised included the violation of natural justice due to inadequate hearing opportunities, the legality of the reopening of the assessment under section 147 of the Income Tax Act, and the addition of a derivative loss claimed in the income tax return amounting to Rs. 12,93,226. The Tribunal found merit in the appellant's claim of not being given a fair hearing and restored the case to the CIT(A) for a comprehensive review.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708778 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2010-2011
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: CHINTANSHAH
• Keywords: Reopening of assessment; Principle of natural justice
• Section: 147

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 2290/MUM/2025 (AY: 2010-11) (Physical hearing) Anil Parmar 13/2, Jain House, Jer Bai Wadia Road Parel, Mumbai-400012. [PAN No. ACAPJ5731D] Vs ITO-20(1)(1), Mumbai Piramal Chambers, Lalbaug, Mumbai – 400012. Appellant / Assessee Respondent / Revenue Assessee by Shri Chintan Shah, CA Revenue by Sh. Surendra Mohan, Sr. DR Date of institution of appeal Date of hearing 31.03.2025 15.07.2025 Date of order pronouncement 15.07.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of Ld. CIT(A)/NFAC dated 21.01.2025 for assessment year (AY) 2010-11. The assessee has raised following grounds of appeal: Ground I: Want of Natural Justice “1. On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre (NFAC) erred in upholding the order passed by Income Tax Officer (ITO) without giving reasonable opportunity of hearing to the appellant and thereby violating the principles of natural justice. 2. The appellant prays that the order passed by the ITO be struck down as bad in law. Without prejudice to Ground I Ground I: Reopening of assessment bad in law 1. On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre (NFAC) erred in confirming the action of Income Tax Officer (ITO) in reopening the assessment under section 147 of the Act. ITA No. 2290/Mum/2025 Anil Parmar 2 2. The appellant prays that reopening of assessment under section 147 of the Act is void ab initio and/or otherwise bad in law. Without prejudice to Ground I and II Ground III: Addition of derivative loss claimed in Income Tax Return amounting to Rs. 12,93,226/- 1. On the facts and circumstances of the case and in law, the NFAC erred in confirming the action of ITO in making an addition of the derivative loss on the ground of alleged client code modification in the appellant's trading activities. 2. The appellant submits that the transaction of derivative loss was genuine and in the normal course of business. The modifications made to client codes were done due to technical issues arising from the trading platform/system and were corrected immediately. 3. The appellant further submits that there is no material or evidence to support that the trading activities were undertaken to avoid tax liabilities, and the transactions were executed as per the standard business practices followed by the appellant. 4. The Appellate prays that the addition made on account of derivative loss due to client code modification be deleted in full. Ground IV: General The appellant craves leave to all to, alter and / or amend the above grounds of appeal.” 2. Rival submissions of both the parties have heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that ld. CIT(A) has not given fair and reasonable opportunity to the assessee. The appeal was filed on 30.01.2017 at the time when physical hearing of appeal was in prevalent. Later on the appeal of assessee was migrated to faceless appeal system. After taking the appeal in faceless manner, only one date of hearing was communicated to the assessee vide notice dated 03.01.2025 for ITA No. 2290/Mum/2025 Anil Parmar 3 making compliance on or before 20.01.2025. in response to such notice, the assessee sought adjournment vide application/ request dated 18.01.2025. The ld. CIT(A) / NFAC neither allowed adjournment nor referred such request of assessee in the impugned order and dismissed the appeal in ex-parte proceeding, copy of screen shot of ITBA portal showing request of adjournment was also filed on record. The ld. AR of the assessee finally submits that CIT(A), violated the principle of natural justice in not allowing adequate opportunity to the assessee. He prayed that matter may be restored back to the file of ld CIT(A) with direction to allow fair and reasonable opportunity to the assessee. He undertakes on behalf of assessee to be more vigilant in future in making timely compliances. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the revenue supported the order of ld. CIT(A). 4. I have considered the submissions of both the parties and perused the record carefully. On careful perusal of record, I find merit in the submission of ld. AR of the assessee that despite seeking adjournment by assessee, the ld. CIT(A) dismissed the appeal by proceeding ex-parte against the assessee. In my view, no reasonable opportunity was allowed to the assessee. The appeal of assessee was pending since long. Thus, in my view no fair and proper opportunity of hearing was allowed to the assessee. Hence, the matter is restored back to the file of ld. CIT(A) to adjudicate on the grounds of appeal on merit. Needless to direct the CIT(A) shall allow reasonable opportunity of hearing to the assessee. Assessee is also directed to be more vigilant in future in making timely compliance and not to seek adjournment without any ITA No. 2290/Mum/2025 Anil Parmar 4 valid reasons. In the result, grounds of appeal of assessee allowed for statistical purpose. 5. In the result, the appeal of the assesseeis allowed for statistical purpose. Order was pronounced in the open Court on15 /07/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated 15/07/2025 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai "