CHANDUBHAI BHAGABHAI PATEL,SURAT V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), SURAT., SURAT

ITA 554/SRT/2024

AI Insights

The case involves Chandubhai Bhagabhai Patel, a farmer, who appealed against the order of the Commissioner of Income Tax (Appeals) which confirmed the additions made by the Assessing Officer under sections 69A and 115BBE of the Income Tax Act, 1961. The additions were related to unexplained cash deposits during the demonetization period and discrepancies in reported capital gains. The Tribunal found that the assessee was not adequately represented due to notices being sent to an incorrect email address, and thus, in the interest of justice, decided to give another opportunity for the assessee to present his case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473289 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 10-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 11-05-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: P. M. JAGASHETH
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 250; 69A

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.554/SRT/2024 Assessment Year: (2017-18) (Physical Hearing) Chandubhai Bhagabhai Patel, 774, Navu Faliyu, Punagam, Puna, Surat – 395010. Vs. The ACIT, Circle – 2(1)(1), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: BIMPP9812N (Appellant) (Respondent) Appellant by Shri P. M. Jagasheth, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 28/10/2024 Date of Pronouncement 08/11/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 12.03.2024 by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.12,08,000/- on account of cash deposit made during demonetization period treated as alleged unexplained cash money u/s.69A of the Income tax Act and erred in applying tax rate of 60 percent u/s.115BBE of the Act. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of 2 ITA No.554/SRT/2024/AY.2017-18 Chandubhai Bhagabhai Patel Rs.2,00,00,000/- on account of alleged difference in Short Term Capital Gain as per value of property transferred as reported in SFI and value reported in ROI. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO. 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings u/s.271AAC of the Income Tax Act, 1961. 5. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty proceedings u/s 270A of the Income Tax Act, 1961. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 3. Brief facts of the case are that the assessee filed return of income for the AY.2017-18 on 19.03.2018, declaring total income at Rs.10,53,490/-. The assessee is a farmer and had carried out agricultural activity. On perusal of the details, Assessing Officer (in short, ‘AO’) noticed that assessee had deposited Rs.6,08,000/- and Rs.6,00,000/- in his bank accounts with Dena Bank and SBI respectively during the demonetization period. The assessee submitted that the deposits were out of sale of agricultural produces and cash on hand. He further submitted that Rs.6,00,000/- was withdrawn from SBI account on 15.10.2016 and balance of Rs.6,08,0000/- was out of accumulated cash balance on hand. The AO noted that the assessee has not given details for verification of the genuineness of source of cash deposits. Being not satisfied with the explanation of the assessee, the AO invoked provisions of section 69A and added 3 ITA No.554/SRT/2024/AY.2017-18 Chandubhai Bhagabhai Patel Rs.12,00,000/- u/s 69A of the Act. He also held that the total income is to be taxed u/s 115BBE of the Act. 3.1 The AO further asked to furnish value of the property transferred as the value reported in SFT is higher than the value of property transferred in ITR. The assessee simply stated that sale consideration was Rs.2,00,00,000/- and purchased of the same was Rs.1,90,92,251/-. Thus, there was capital gain of Rs.9,07,749/-. Since in the SFT, the sale consideration was shown at Rs.4,00,00,000/- instead of Rs.2,00,00,000/-, AO added the difference of Rs.2,00,00,000/- to the total income. Thus, the assessed income was Rs.2,22,61,490/- against return of income of Rs.10,53,490/-. 4. Aggrieved by the order of AO, the assessee filed this appeal before CIT(A). The CIT(A) issued notices of hearing requiring assessee to comply on 04.04.2021, 31.12.2021, 10.11.2022, 07.12.2022, 27.09.2023 and 11.03.2024. The assessee had requested for adjournment vide letters dated 31.12.2021, 10.11.2022 and 07.12.2022. The CIT(A) observed that after the last adjournment, two notices were issued but assessee did not file any reply. Therefore, it could be presumed that assessee’s response was only a delaying tactics and he is not interested in prosecuting the appeal. Therefore, the CIT(A) dismissed the appeal. 5. Aggrieved by the order of Ld. CIT(A), the assessee filed appeal before the Tribunal. The Learned Authorized Representative (Ld. AR) submitted that notices were sent on separate e-mail id i.e., [e-mail] instead of correct e-mail id i.e., [e-mail]. He further submitted that 4 ITA No.554/SRT/2024/AY.2017-18 Chandubhai Bhagabhai Patel the assessee’s share in the land sold was 50%, therefore, the consideration of the assessee would be Rs.2,00,00,000/- instead of Rs.4,00,00,000/- adopted by the assessee. He submitted that the assessee has a strong case on merit and requested to give one more opportunity to plead its case on merit. 6. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) of the Revenue supported the order of lower authorities. He stated that adequate opportunities had been given to the assessee. However, he would have no objection if the matter is restored to the file of AO for fresh adjudication. 7. We have heard both the parties and perused the material available on record. It is an undisputed fact that the assessee did not respond to the notices issued to him by the CIT(A), as stated in the facts of the case. However, the assessee has requested for adjournment which has been duly noted by the CIT(A). The Ld. AR submitted that the notices were issued in a wrong e-mail id and not in the correct address given by assessee. The Ld. AR requested for one more opportunity in the interests of justice and fair play. We find that CIT(A) has passed an ex parte order due to non-compliance by the assessee before him. The Ld. AR stated that one more opportunity of hearing may be given to him for presenting his case properly. We are of the view that one more opportunity should be given to the assessee to plead his case. It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to 5 ITA No.554/SRT/2024/AY.2017-18 Chandubhai Bhagabhai Patel contest his case. Therefore, without delving deeper into the merits of the case, in the interest of justice, we set aside the order of CIT(A) and restore the matter back to the file of AO for de novo adjudication and to pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee is also directed to furnish explanation and submit the relevant details and documents before the AO without taking adjournment bereft of valid reasons. For statistical purposes, the appeal of the assessee is treated as allowed. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced in the open court on 08/11/2024 Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 08/11/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "