DEEJAY STOCKS PRIVATE LIMITED,MUMBAI V. DCIT4(2)(1), , MUMBAI

ITA 4691/MUM/2024

AI Insights

The case involves multiple appeals by Deejay Stocks Private Limited and the revenue against various orders related to the assessment years 2014-15, 2015-16, 2016-17, and 2017-18. The appeals primarily challenged the validity of the reopening of assessments under sections 147 and 148, and the subsequent additions and penalties imposed. The Tribunal noted that the AO and CIT(A) had passed exparte orders without adequately considering the assessee's circumstances, including the personal difficulties faced by the company's director and the change of the company's Chartered Accountant during the relevant period. The Tribunal decided to remand the matter back to the AO for a fresh assessment, allowing the assessee to contest the validity of the reopening and other legal issues.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126336 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: NISHIT GANDHI
• Keywords: Set aside; Reasonable cause; Statistical purposes; Restored; Deleted; Directions; E-mail
• Section: 148; 144; 139

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.4691/Mum/2024 (Assessment Year :2014-15) ITA No.4693/Mum/2024 to ITA No.4695/Mum/2024 (Assessment Year :2017-18) Deejay Stocks Private Limited 401, Shangrilla Apt L.T. Road, Borivali (W) Mumbai – 400 092 Vs. DCIT 4(2)(1) Mumbai PAN/GIR No.AADCD6404H (Appellant) .. (Respondent) ITA No.4671/Mum/2024 & 4668/Mum/2024 (Assessment Year :2015-16 & 2016-17) ACIT 4(2)(1) Mumbai Vs. Deejay Stocks Private Limited 401, Shangrilla Apt L.T. Road, Borivali (W) Mumbai – 400 092 PAN/GIR No.AADCD6404H (Appellant) .. (Respondent) Assessee by Shri Nishit Gandhi Revenue by Shri R.R. Makwana Date of Hearing 02/04/2025 Date of Pronouncement 21/04/2025 ITA No.4691/Mum/2024 and others Deejay Stocks Pvt. Ltd., 2 आदेश / O R D E R PER BENCH: The appeal for the A.Y.2014-15 in ITA No.4691/Mum/2024 has been filed by the assessee against order dated 19/07/2024 passed by NFAC for the quantum of assessment passed u/s.147 r.w.s. 144; appeal in ITA No.4671/ Mum/2024 & 4668/Mum/2024 have been filed by the Revenue against separate impugned order passed by ld. NFAC in relation to the penalty proceedings u/s.271(1)(c) for the A.Y.2015-16 and 2016- 17; appeal in ITA No.4694/Mum/2024 has been filed by the assessee against order dated 19/07/2024 passed by NFAC, Delhi for the quantum of assessment passed u/s.147 r.w.s. 144 for the A.Y.2017-18; appeal in ITA No.4693/Mum/2024 has been filed by the assessee against order dated 19/07/2024 passed by NFAC, in relation to the penalty proceedings u/s.272A(1)(d) for the A.Y.2017-18 and appeal in ITA No.4695/Mum/2024 has been passed by the ld. CIT(A) in relation to the penalty proceedings u/s. 271AAC(1) for A.Y.2017-18. ITA No.4691/Mum/2024 2. In this appeal assessee has challenged the validity of reopening u/s.147 / 148 and addition of Rs.52,50,000/- for alleged non-genuine profits on derivatives on BSE and USE. 3. At the outset, he has stated that both ld. AO and ld. CIT (A) have passed exparte order on the ground that assessee had not responded to the notices. Here in this case assessee has filed the ITA No.4691/Mum/2024 and others Deejay Stocks Pvt. Ltd., 3 return of income u/s. 139 on 30/11/2014 declaring total income of Rs.5,51,000/-. Later on based on certain information that assessee was beneficiary of dealing in illiquid derivatives through Trinay Securities from where assessee has earned Rs.52,50,000/- as undisclosed business profit. Even the ld. CIT(A) has passed the order exparte confirming the action of the ld. AO and he also referred to some SEBI order dated 27/01/2021. It had been stated that during the time period when these assessment proceedings were initiated erstwhile, the Director of the company who was looking after the affairs of the assessee company was going was pushed in various civil suits filed against him and during that time he was facing lots of personal difficulties, as both his parents were seriously ill and the conditions were getting worse and ultimately there was a death of his mother in the year 2022. Even the Chartered Accountant of the assessee was changed who was not able to file any response to the notice issued. It was only when tax demand recovery was issued and assessee was contacted through phone call, then only assessee came to know that assessment order has been passed. Before the ld. CIT (A) it appeared that written submissions were filed on three occasions, however, it is seen that nowhere these submissions have been dealt by the ld. CIT(A) as he has simply referred to SEBI on 27/01/2021 to decide the issue against it. Thus, in the interest of justice and the entire matter is restored back to the file of the ld.AO to decide the issue afresh and also assessee will be at liberty to raise all those legal issues including the validity of reopening u/s.147 / 148 before ITA No.4691/Mum/2024 and others Deejay Stocks Pvt. Ltd., 4 the ld. AO and if assessee challenges such validity then ld. AO has to follow the procedure laid down under the law. Accordingly, the appeal of the assessee is restored back to the file of the ld. AO and to be decided afresh and the grounds raised by the assessee are allowed for statistical purposes. ITA No.4671/Mum/2024 & ITA No.4668/Mum/2024 4. These are the appeals in relation to the penalty proceedings u/s. 271(1)(c). It had been stated that in the quantum proceedings, the matter has been restored back to the file of the ld. CIT(A) for fresh adjudication. Since quantum has been set aside to the file of the ld. CIT(A), accordingly, the impugned penalty appeal is also remanded back to the file of the ld. CIT(A) to be decided afresh after disposing of the quantum appeal and in accordance with law. Accordingly, appeals of the Revenue are allowed for statistical purposes. ITA No.4694/Mum/2024 5. The aforesaid appeal filed by the assessee against order dated 19/07/2024, assessee has challenged the validity of reopening u/s.147 and addition of Rs.53,93,600/- on account that certain information was received that assessee had sold shares of 53,93,600, which was not reflected in the accounts. Since assessee could not respond to the notices, ld. AO has passed an exparte order making the addition of Rs.53,73,600/-. Before the ld. CIT (A), assessee has filed the written submissions. However, ld. CIT (A) without discussing those written submissions has ITA No.4691/Mum/2024 and others Deejay Stocks Pvt. Ltd., 5 simply relied upon the order of the SEBI dated 27/01/2021. Since on similar issue in the A.Y.2014-15, we have restored back the entire issue to the file of the ld. AO to be decided afresh and also the legal issue which has been raised before us, therefore, in view of the directions given in A.Y.2014-15, the appeal of the assessee is remanded back to the file of the ld. AO to be decided afresh, accordingly, appeal of the assessee is allowed for statistical purposes. ITA No.4695/Mum/2024 6. In the aforesaid appeal assessee has challenged the levy of penalty of Rs.4,20,000/- u/s.271AAC(1). It is in respect of the same quantum of addition of Rs.53,93,600/- wherein, ld. AO has levied penalty @10% on the tax sought to be deducted which worked out to Rs.4,20,700/-. Since we have remanded back the issue to the file of the ld. AO to be decided afresh, accordingly, the impugned penalty levied by the ld. AO is quashed as infructuous and it is only when the ld. AO passes afresh assessment order, then, all these proceedings are left open to be decided on facts and in law. Accordingly, the appeal of the assessee is allowed. ITA No.4693/Mum/2024 7. In the aforesaid appeal assessee has challenged the levy of penalty of Rs.30,000/- for non-compliance u/s.272A(1)(d). We find that assessee has stated that when the assessment proceedings were initiated, the Director of the company who was ITA No.4691/Mum/2024 and others Deejay Stocks Pvt. Ltd., 6 looking after the affairs of the assessee company was pushed in various civil suits filed against him and also during that period both his parents were seriously ill and the conditions were getting worse and ultimately there was a death of his mother. Because of the above reasons, he could not keep track of notices sent on e-mail and assessee could not respond. Further new Chartered Accounted appointed also did not file any response to the notices issued. All these factors do constitute a reasonable cause for non-compliance and accordingly, in view of Section 273B, the penalty levied by the ld. AO is deleted in view of the above reasonable cause. Accordingly, the appeal of the assessee is allowed. 8. In the result, appeals of the assessee and revenue are allowed for statistical purposes. Order pronounced on 21st April, 2025. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 21/04/2025 KARUNA, sr.ps ITA No.4691/Mum/2024 and others Deejay Stocks Pvt. Ltd., 7 Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "