ASSISTANT COMMISSIONER OF INCOME TAX-26(1), MUMBAI, BKC, MUMBAI V. TATA EDUCATION TRUST, MUMBAI

ITA 4873/MUM/2024

AI Insights

The case involves an appeal by the Income Tax Officer, Ward 4.1, Thane against the order of the National Faceless Appeal Centre (NFAC), Delhi, which was passed under section 250 of the Income Tax Act, 1961 for the assessment year 2009-10. The appeal was filed due to the addition of unexplained deposits in the assessee's bank account, which was initially investigated and added by the Ld. AO under section 143(3). The Ld. CIT(A) had partly allowed the assessee's appeal but dismissed it on the grounds of limitation under section 249(3), which was contested by the revenue. The tribunal found inconsistencies in the CIT(A)'s order and remanded the matter back for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398077 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Other Referred Cases: CIT vs S. Chaniappa Mudaliar, Sunderalal Mannalal vs. Nandramdas Dwarakadas, CIT vs. B.N. Bhattachargee & ANR, CIT vs M/s Multiplan India Pvt Ltd, M/s Chemipol Vs. Union of India & Ors
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANNAVARAMKOSURI
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Accommodation entries
• Section: 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D”, MUMBAI BEFORESHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.4873/Mum/2023 (Assessment year: 2009-10) Income-tax Officer, Ward 4.1, Thane Room No.3, A Wing, 6thFloor. Ashar IT Park, Wagle Estate, Then-400 004 vs Dharmendra AmrutlalDarjeee B-96, Hari Om Nagar Bldg No.1, 100 Feet Road, Vasai (W), Vasi W- 401 202 PAN: AEHPD7667K APPELLANT RESPONDENT Assessee by : None Respondent by : Shri AnnavaramKosuri SR.AR. Date of hearing : 04/06/2025 Date of pronouncement : 06/06/2025 O R D E R Per Anikesh Banerjee (JM): Instant appeal of the revenue was filed against the order of the National Faceless Appeal Centre (NFAC), Delhi *in short, ‘Ld.CIT(A)+ passed under section 250 of the Income Tax Act, 1961 (in short, ‘the Act’)for A.Y. 2009-10, date of order 19/10/2023 for A.Y. 2009-10. The impugned order emanated from the order of the Learned Income-tax Officer, Ward 4(1), Thane(for brevity, ‘the Ld.AO’) passed under section 143(3), date of order 30/12/2016. 2 ITA 4873/Mum/2023 Dharmendra AmrutlalDarjeee 2. When the appeal was called for hearing, there was no representation on behalf of the assessee, nor was any adjournment petition filed. Considering the merits and quantum involved in the case, we have decided to proceed with the hearing ex parte with respect to the assessee, after hearing the Ld. DR. 3. We heard the rival submissions and considered the documents available on the record. On perusal of record, we find that the assessee’s case was reopened under section 148 for transactions in Oriental Bank of Commerce, Fort Branch, Mumbai bearing Account No.00231011001445. In said bank account total credit was made amount to Rs.24,73,73,000/- which includes cash deposit of Rs.85,000/-. On other hand, the debited amount from said bank account was Rs.24,73,69,818/- which includes cash withdrawal of Rs.23,22,42,000/-. The Ld.AO has investigated the issue and finally made an addition of unexplained deposit in bank account amount to Rs.24,73,73,000/-. The aggrieved assessee filed an appeal before the Ld.CIT(A) with a delay of 374 days. The Ld.CIT(A) concluded the appeal in following manners, after receiving the remand report from the Ld.AO. The appeal of the assessee was duly rejected for violation of section 249(3)of the Acton ground of limitation. The relevant part of the observation of the Ld.CIT(A) is reproduced as below:- “ Further, the Hon’ble Bombay High Court in the case of M/s Chemipol Vs. Union of India &Ors , in Central Excise Appeal No.62 of 2009, vide judgment dated 17th September 2009, while considering the judgement of Hon’ble Supreme Court in CIT vs S. ChaniappaMudaliar, AIR 1969 SC 1068, SunderalalMannalal vs. Nandramdas Dwarakadas, AIR 1958 and others judgements observed as follows- “We cannot altogether lost sight of the Rule that every court or tribunal has an inherent power to dismiss a proceeding for non-prosecution when the petition / 3 ITA 4873/Mum/2023 Dharmendra AmrutlalDarjeee Appellant before it does not wish to prosecute the proceedings. In such situation, unless the statue clearly requires the court or tribunal to hear the Appeal/proceeding and decide it on merits, it can dismiss the Appeal/proceeding for”. The Delhi Bench of ITAT in CIT vs M/s Multiplan India Pvt Ltd (1991) 38 ITD 320 (Del), has held that in a similar circumstance, the Appeal may be dismissed as un- admitted. In fact, the Hon’ble Apex Court in CIT vs. B.N. Bhattachargee & ANR (1979) 10 CTR 0354 (1979) 118 ITR 0461 has held that the words ‘preferred an Appeal’ in section 245M means more than formally filing it but effectively pursuing it. In view of the above judicial pronouncements coupled with the fact that the Appellant has not pursued the appeal, I am left with no option but to dismiss the appeal.” the Ld.CIT(A) considered the merit of the case and finally, the addition was duly confirmed amount to Rs.12,36,865/- and the rest of the amount was duly deleted. The Ld.CIT(A) has taken the ground that the assessee has executed the work related to commission income @0.5% for A.Y. 2020-11 and @10% for A.Y. 2011- 12 for providing the accommodation entries. So the Ld.AO is not justified in making the addition of entire amount whereas 0.5% commission for arranging the accommodation entry of Rs.24,73,74,000/- which works out to Rs.12,36,865/- was confirmed by the Ld.CIT(A). Accordingly, the appeal of the assessee was partly allowed. Being aggrieved on the impugned appeal order, the revenue filed an appeal before us, but the assessee has not filed any appeal against the order of the Ld.CIT(A). 4. We find that the impugned appellate order passed by the Ld. CIT(A) is bifurcated into two parts. In the first part, the learned CIT(A) dismissed the appeal on the ground of maintainability under section 249(3) of the Act by refusing to 4 ITA 4873/Mum/2023 Dharmendra AmrutlalDarjeee condone the delay in the filing of the appeal. Once the appeal is held to be non- maintainable, there remains no jurisdiction to adjudicate the matter on merits. However, in the second part, the Ld. CIT(A) proceeded to consider the factual aspects of the case and recorded findings by relying upon the remand report dated 09/08/2019 submitted by the Ld. AO through the Joint CIT, Range-4, Thane. We observe that the Ld. CIT(A) cannot simultaneously take mutually inconsistent stands in the same order, as such conduct is contrary to the settled principles of law. The appellate order thus suffers from legal infirmity, as it reflects two contradictory conclusions within a single proceeding, thereby rendering the order untenable in law and devoid of judicial propriety. In view of the above, we find no alternative but to set aside the impugned order and remand the matter back to the file of the Ld. CIT(A). We direct the Ld. CIT(A) to condone the delay of 374 days in filing the appeal and to adjudicate the matter afresh by passing a reasoned and speaking order on merits. Further, the remand report already on record and accepted by the Ld. CIT(A) shall be duly considered. The assessee shall also be permitted to file any additional evidence, if sought to be submitted, in accordance with law.It is clarified that the assessee must be granted a reasonable opportunity of being heard in the de novo proceedings. At the same time, the assessee is expected to act with due diligence and extend full cooperation for expeditious disposal of the appeal. 5 ITA 4873/Mum/2023 Dharmendra AmrutlalDarjeee 5. In the result, the appeal of the revenue bearing ITANo.4873/Mum/2023 is allowed for statistical purposes. Order pronounced in the open court on 06th day of June, 2025. Sd/- sd/- (VIKRAM SINGH YADAV) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 06/06/2025 Pavanan Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "