ARAJANBHAI PRATAPBHAI ZALA,VERAVAL, JUNAGADH V. INCOME TAX OFFICER, VERAVAL, JUNAGADH

ITA 237/RJT/2024

AI Insights

The case involves two appeals filed by Arajanbhai Pratapbhai Zala against the orders of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2015-16. The appeals were related to penalties and additions made under sections 271(1)(c) and 144 r.w.s 147 of the Income Tax Act, concerning alleged concealed income and unexplained investments. The tribunal noted procedural irregularities in the handling of the appeals by the assessee's representatives, which contributed to the delay in filing and response. The tribunal emphasized the need for a fair hearing and the principles of natural justice, leading to the decision to remand the case for re-assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 39552 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 27 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: 07-10-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 18-04-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: VIRAJ KAPURIA
• Keywords: Condonation of delay; Unexplained investment
• Section: 147; 144; 271(1)(c); 274

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 Nos. 237 & 281/RJT/2024 (Ǔनधा[रण वष[/Assessment Year: (2015-16) Arajanbhai Pratapbhai Zala, Plot No. 27, Krishna Society, Bypass Cross Road, Junagadh Highway, Veraval, Rajkot, Gujarat-362266 Vs. Income Tax Officer, Ward-4, JND Veraval èथायी लेखा सं./जीआइआरसं./PAN/GIR No.: AAMPZ9555B (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Appellant by : Shri Viraj Kapuria, A.R. राजèव कȧ ओर से/Respondent by : Shri Abhimanyu Singh Yadav, Sr. D.R. सुनवाई कȧ तारȣख/ Date of Hearing : 07/10/2024 घोषणा कȧ तारȣख/Date of Pronouncement : 15/10/2024 आदेश / O R D E R PER SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER: These two appeals filed by the assessee are 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 23-02- 2024 & 29.09.2023 for assessment year 2015-16. 2. The assessee has raised the following grounds of appeal:- ITA No. 237/RJT/2024 “1. The notice issued u/s 274 r w.s 271(1)(c) of the Act is bad in law. 2. The learned Assessing Officer has erred in law as well as fact in levying penalty u/s.271(1)(c) of the Act on alleged fact that appellant has concealed income of Rs. 71,26,500/- due to below mentioned reason, Rs.31,26,500/- on account of cash deposited in saving bank account. Page | 2 ITA Nos. 237 & 281 /RJT/2024 A Y: 2015-16 Rs.40,00,000/- on account of unexplained investment The appellant craves leave to add, alter, amend, delete or withdraw one or more grounds of appeal.” ITA No. 281/RJT/2024 “1. The assessment order passed u/s 144 r.ws 147 of the Act is bad in law. 2. The learned Assessing Officer has erred in law as well as on facts in making the huge addition of Rs. 2,71,26,500/- u/s 144 of the Act due to below mentioned reason, Rs. 31,26,500/- on account of cash deposited in saving bank account Rs. 40,00,000/- investment on account of unexplained The appellant craves leave to add, alter, amend, delete or withdraw one or more grounds of appeal.” 3. At the outset, the appeal for A.Y. 2015-16 was filed late by 156 days. In this connection, an application for condonation of delay duly supported by an affidavit is placed on record as follows:- “1. In my case, the assessment for A.Y. 2015-16 was completed u/s.144 of the Income Tax Act on 06.11.2017 date making various additions as under. a. Addition of Rs. 31,26,500/- on account of unexplained cash deposit. b. Addition of Rs. 40,00,000/- on account of unexplained investment in immovable property. 2. Aggrieved by the same, I preferred appeal before Hon'ble CIT(A). However, the said appeal has been filled late due to the reason that accountant (Mr. Hirenkumar Haribhai Dodiya) to whom assessment order has been handed over by instructing him to pass the same to chartered accountant to carry out necessary procedure had failed to inform the said chartered accountant. 3. Thereafter, when I have made inquiry about status of my appeal at that time I came to know that Mr. Hirenkumar Haribhai Dodiya (Accountant) has not provided the assessment order details to Chartered Accountant and therefore appeal before CIT(A) was not filled within available time prescribed by the Act. 4. On knowing the fact, I have filled appeal in a hurried manner on 07/03/2020. The case was not taken for hearing due to COVID-19 for 2 years after filing. Then after, in response to discrepancy raised, reply was filed by my A.R on 21/02/2023 date. 5. Meanwhile, for filling my income tax return for FY 2022-23, my regular tax consultant have changed my income tax credentials. 6. However, the said change in my income tax credentials have not been informed to Chartered Accountant who have filled appeal before Hon'ble CIT(A). Further the said Chartered Accountant has also not taken any efforts to check online about issuance of any hearing notice after his last reply filed on my behalf on 21/02/2023. 7. Thereafter, on 14/02/2024 1 have received E-mail from department regarding hearing for penalty appeal pending before CIT(A). Page | 3 ITA Nos. 237 & 281 /RJT/2024 A Y: 2015-16 8. After receiving the said E-mail, I have informed my tax consultant and he informed me that the said email is for hearing of appeal related to penalty matter which was filed against penalty order u/s. 271(1)(c) by me along with main appeal. 9. Further, he also informed to me that order has been passed by Hon'ble CIT(A) dated 29/09/2023 regarding main appeal. However, the said intimation has not been provided by Chartered Accountant who has filled appeal as he has not taken follow up of the said matter on regular manner. 10. As I do not possess proper knowledge regarding the tax litigation, I was under belief that my authorized representative is looking after my income tax appeal matter in a regular manner but due to mistake of my accountant and A.R., matter has not been properly handled by him and order has been passed by CIT(A) confirming demand of Rs. 22,54,250/- 11. Due to the above-mentioned reason, there is delay in filing of appeal before your honour. I request your honour to kindly consider the above and condone the delay and oblige me. 12. Further, if I have not been allowed to file appeal before your honour than it will cause financial hardship as it is high value case and also it is just paper demand. Further, I assure the Hon'ble Tribunal that I shall remain fully vigilant for the tax related matters now onwards and shall make all compliances in this matter also immediately. Kindly consider the above and oblige me.” 4. The ld. AR was submitted that the appeal could not be filed in time because the old consultant has changed the password and the account who was responsible for watching the E-mail could not do work effectively so no effort to verify the email portal of the Department, hence occurred. It is further prayed that an opportunity should be given to represent the case before the ld. CIT(A). On the contrary, the ld. D.R. submitted that the assessee is having non-co-operative attitude no reply to notice submitted. The case before the AO was also dismissed ex-parte However, the ld. DR has not objected to the prayer of the assessee. 5. We have heard both the parties and perused all the relevant materials available on record. It was noted that the accountant, Mr. Hiren Kumar Dodiya changed the password and did not inform to the chartered accountant of the appellant. Hence, the appeal could not be filed in time that it was a covid period which is started from 7th March, 2020. In those days, it was difficult to move completely lockdown was declared by Page | 4 ITA Nos. 237 & 281 /RJT/2024 A Y: 2015-16 Government. It was further noticed that appellant came to know about the dismissal of appeal. When the appellant received an email from the department in respect of notice for levying penalty u/s. 271(1)(c). that the appellate taken immediate action and with the help of CA the appellate file an appeal before the Training. It is settled law that principle of natural justice and fair play required affected party should be granted sufficient opportunity of being heard and contest the case. Therefore, we of the view that one more opportunity should be given to the assessee to present his case before the lower authorities and remit the matter back to the file of ld. AO for fresh adjudication on merit after giving opportunity of being heard and the assessee further directed to submit all relevant documents in support of the income earned during the year and also comply with the notice. Further appeal in ITA 237/RJT/2024 for penalty is also allowed for statistical purposes. 6. In the result, the both the appeal of the assessee are allowed for statistical purposes. Order is pronounced on 15/10/2024 in the Open Court. Sd/- Sd/-S (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 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 "