CHANDERKUMAR OMPRAKASH HUF,NAVI MUMBAI V. INCOME TAX OFFICER, VASHI

ITA 2331/MUM/2025

AI Insights

The case involves an appeal by Chanderkumar Omprakash HUF against the order of the CIT(A)/NFAC, which dismissed the appeal on grounds of non-prosecution without addressing the substantive grounds raised. The primary issues revolved around the reassessment proceedings initiated by the Income Tax Officer (ITO) based on third-party information, the jurisdiction for issuing notice under section 148, and the additions made under unexplained expenditure. The Tribunal noted procedural lapses in the issuance of notices and acknowledged the assessee's claims of not receiving proper communication, leading to the decision to restore the case to CIT(A) for a detailed examination on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711394 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MOHAN
• Assessee Lawyers: KHUSHIRAM JADHWANI
• Keywords: Condonation of delay; Opportunity of being heard; Reasonable cause; Reassessment proceedings; Unexplained expenditure; Reopening of assessment; Principle of natural justice; Search and seizure; Competent authority; Borrowed satisfaction; Bogus
• Section: 148; 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 2331/MUM/2025 (AY: 2012-13) (Physical hearing) ChanderkumarOmprakash HUF Revenue-22, APMC Market, Phase II, Turbhe, Navi Mumbai – 400705. [PAN No. AABHC5968A] Vs ITO,Ward– 28(1)(3), Mumbai Vashi Railway Station, Vashi, Navi Mumbai-400705. Appellant / Assessee Respondent / Revenue Assessee by Shri Khushiram Jadhwani, Advocate Revenue by Sh. Surendra Mohan, Sr. DR Date of Institution 02.04.2025 Date of hearing 23.07.2025 Date of pronouncement 23.07.2025 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 17.12.2024 for assessment year (AY) 2012-13. The assessee has raised following grounds of appeal: “Ground No.1: Section 250: In Facts and circumstances of the case and in law, National Faceless Appeal Centre erred in dismissing appeal merely on the ground of non-prosecution of appeal without dealing with the grounds of appeal filed by the Appellant along with detailed statement of facts attached to form 35. Appellant contends that it could respond in appellate proceedings since the hearing notices were not sent to email id registered in form 35 filed. Ground No.2: Section 148: In Facts and circumstances of the case and in law, National Faceless Appeal Centre erred in confirming action of Ld. Assessing Officer in assumption of jurisdiction in initiating reassessment proceedings which is entirely based on third party information/statements withoutindependent application of my while recording reasons for re-opening of assessment. Appellant contends that Ld Assessing Officer has initiated reassessment proceedings merely on the basis of information supplied by the Investigation Printed from counselvise.com ITA No. 2331/Mum/2025 Chanderkumar Omprakash HUF 2 Wing, Karnal which in turn is based on generalized statement of third party who has not named the Appellant in his statement and hence it is a borrowed satisfaction and not the own satisfaction of the Ld. Assessing Officer Ground No.3: Section 151: In Facts and circumstance of the case and in law, the issuance of notice u/s 148 is wholly without jurisdiction in absence of grant of approval by competent authority after recording proper sanctions for recording reasons as mandated under section 151 of the Act. Appellant contends that the competent authority under section 151 has not accorded sanction after independent application of mind that it is fit for re- opening of assessment for the relevant assessment year. Ground No.4: Section 143(3) r.w.s 147: In Facts and circumstances of the case and in law, National Faceless Appeal Centre erred in confirming action of Ld. Assessing Officer in completing assessment proceeding under section 143(3) r.w.s 147 without appreciating the fact that Appellant has declared income in return of income after getting the accounts audited within the provisions of the Act and hence drawing adverse inference merely on the basis of thirty party information is bad in law and void ab-initio. Appellant contends that as per alleged information search and seizure action has been undertaken in case of one Shri Hitesh Jain and the business transactionundertaken by Appellant is with one M/s Shubhan Agro India (Prop Sushil Sharma) and hence both being independent entity under the Act. Ground No 5: Unexplained Expenditure: In Facts and circumstance of thecase and in law, National Faceless Appeal Centre erred in confirming action of Ld. Assessing Officer in making addition of Rs.30,03,482/- being payments made to a supplier M/s Shubhan Agro India (Prop Sushil Sharma) against the purchases affected from the supplier by treating the same as unexplained expenditure and bogus (a) by rushing through the reassessment proceedings without giving proper opportunity of being heard though Ld. Assessing Officer had ample time left for completing assessment proceedings. (b) without bringing on record any tangible evidence for the allegations made by him in the assessment order, (c) without appreciating that the payment was made to the supplier through banking channel and there is no evidence on record that the said amount has flown back to the Appellant and Printed from counselvise.com ITA No. 2331/Mum/2025 Chanderkumar Omprakash HUF 3 (d) without providing the statement of the third party who had given hostile statement about the supplier behind the back of the Appellant, thereby denying the opportunity of cross examining the hostile witness. Ground No 6: Order Against Principle Of Nature Justice: In Facts and circumstances of the case and in law, National Faceless Appeal Centre erred in confirming action of Ld. Assessing Officer in making addition of Rs.30,03,482/-thereby brushing aside the crucial documentary evidences, which were easilyavailable to Ld. Assessing Officer during assessment proceedings, hence proceedings are against the basic principle of natural justice. i) Copy of Purchases Register ii) Copy of Bank Statement iii)Copy of Ledger Account iv) Copy of Purchases invoice Ground NO 7: Unexplained Expenditure: In the facts and circumstances ofthe case and in law, National Faceless Appeal Centre erred in confirming action of Ld. Assessing Officer in making addition of Rs.30,03,482/- being payments made to a supplier against the purchases affected from the supplier by treating the same as unexplained expenditure and bogus without appreciating that no disallowance is called for when the Appellant has affected sales against the purchases from the alleged supplier and that can be proved by one to one identification. The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or ground of appeal on or before the hearing.” 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that there is delay of 43 days in filing appeal before Tribunal. The assessee has already filed application for condonation of delay as well as affidavit of karta of assessee-HUF. The delay in filing appeal is neither intentional nor deliberate. The assessee while filing appeal before ld. CIT(A) provided email address as [e-mail]. As primary e-mail and other [e-mail]. The notice was issued at some different Printed from counselvise.com ITA No. 2331/Mum/2025 Chanderkumar Omprakash HUF 4 email. Thus, notice of hearing was not issued through such email, copy of screen shot of ITBA portal showing issuance of notice on [e-mail] is filed. The ld. AR submits that since appeal of assessee was dismissed in ex-parte proceeding without allowing opportunity and that the assessee was not aware of passing order bt ld CIT(A). The assessee filed appeal immediately on coming to know the order of dismissal by ld CIT(A). The delay in filing appeal is not inordinate and may be condoned. He further prayed that ld CIT(A) has not adjudicated the appeal on merit, therefore, may be restored back to the file of ld. CIT(A) to adjudicate the appeal on merit. 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 rival submissions of both the parties and perused the record. Considering the fact that at the time of filing first appeal before ld. CIT(A), the assessee provided primarily email address [e-mail]. and secondly email address [e-mail]. However, no notice under section 250 was not issued through such email address. The notices were sent on different email address that is [e-mail], therefore, I find a reasonable cause for non-appearance as well as for non-filing appeal in time. Considering the explanation of ld. AR of the assessee, I find reasonable cause for condoning the delay in filing appeal. Further, considering the fact that ld. CIT(A) dismissed the appeal of assessee in ex-parte proceeding. Therefore, accepting the prayer of ld. AR of the assessee, the appeal is Printed from counselvise.com ITA No. 2331/Mum/2025 Chanderkumar Omprakash HUF 5 restored back to the file of appeal by ld. CIT(A) to adjudicate of the grounds of appeal afresh and in accordance with law. Needless to direct before passing assessment order afresh, the assessing officer 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 valid reasons. In the result, grounds of appeal of assessee allowed for statistical purpose. 5. In the result, the appeal of the assessee is allowed for statistical purpose. Order was pronounced in the open Court on 23 /07/2025 at the time of hearing. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated 23/07/2025 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 Printed from counselvise.com "