DIPANSHU GUPTA,HOWRAH V. ITO, WARD - 37(1), KOLKATA

ITA 2448/KOL/2024

AI Insights

The case involves appeals by Dipanshu Gupta against the orders of the CIT(A) for the assessment years 2015-16 and 2017-18, which were based on ex parte assessments. The AO had made significant additions to the assessee's income, treating large bank deposits as unexplained money under section 69A of the Income Tax Act, 1961. The CIT(A) dismissed the appeals due to non-compliance with procedural requirements. The Tribunal noted that the assessee was imprisoned during the relevant period and had not received proper legal representation, leading to the decision to set aside the CIT(A)'s orders and direct a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298644 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Other Referred Cases: CIT Vs. B.N. Bhattachargee & Another 118 ITR 461, Estate of Late Tukoji Rao Holker Vs. CWT 223 IR 480 (MP), CIT Vs. Multiplan India Pvt. Ltd. 38 ITD 320 (Del)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Reassessment proceedings; Accommodation entries
• Section: 147; 148; 144; 119; 250; 143(1); 271(1)(c); 69A

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA श्री प्रदीप क ुमार चौबे, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta Vs. ITO, Ward -37(1), Kolkata (Appellant) (Respondent) PAN: ATUPG8153F Appearances: Assessee represented by : Manish Tiwari FCA. Department represented by : Roma Chaudhary, JCIT, Sr. DR. Date of concluding the hearing : April 21st, 2025 Date of pronouncing the order : April 23rd, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: Both these appeals filed by the assessee are against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2015-16 & AY 2017-18 dated 29.07.2024 & 07.06.2024, which have been passed against the assessment orders u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 25.03.2022 & 27.03.2022, respectively. Page | 2 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 2 of 10 1.1. The Registry has informed that the appeals filed by the assessee are barred by limitation by 119 days and 66 days. Applications seeking condonation of delay have been filed by the assessee stating as under: AY 2015-16 “In the instant case the Ld. CIT(A) passed order under section 250 of the IT Act, 1961 on 29.07.2024. So the due date of filing of appeal before the Hon'ble ITAT was 28.09.2024, but the appellant individual due to following reasons was unable to submit the appeal before the Hon'ble ITAT, Kolkata within the due date. 1.) That the appellant Sri Dipanshu Gupta is not conversant with income tax matters and for income tax matters, he is fully dependent on his tax consultant. On behalf of the appellant Sri Dipanshu Gupta his tax consultant register his mail ID and mobile no. on income tax portal for various types of communication with the department. In this process, the appellant failed to get any recent communications and developments of his income tax matters. 2.) That due to some dispute, the Tax consultant of the appellant Sri Dipanshu Gupta is not at all co-operating with the appellant for nearly last one year. For this reason, the income tax matters of the appellant remain pending. 3.) That the appellant Sri Dipanshu Gupta was also involved in various types of business related legal troubles / issues. For smooth running of the business, Sri Dipanshu Gupta had to concentrate on his legal matters. As a result of those legal issues, all his current and pending income tax proceedings remained unnoticed and unattended. 4.) That the appellant only recently came to know the incident of ex-parte appeal orders u/s 250 dated 29.07.2024 for AY 2015-16. 5.) Then, after the appellant began to search for a new tax consultant for his income tax matters and ultimately decided to file appeal against the said appellate orders for the aforesaid assessment years. In this process, there is lapse of total 66 days in filing the appeal against order u/s 250 dated 29.07.2024. Now considering the above stated situation and also keeping in mind that the appellant is not conversant with income tax matters kindly condone the delay of 66 days in filing appeal and allow the appellant to file appeal.” AY 2017-18 “In the instant case the Ld. CIT(A) passed order under section 250 of the IT Act, 1961 on 07.06.2024. So the due date of filing of appeal before the Page | 3 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 3 of 10 Hon'ble ITAT was 06.08.2024, but the appellant individual due to following reasons was unable to submit the appeal before the Hon'ble ITAT, Kolkata within the due date. 1.) That the appellant Sri Dipanshu Gupta is not conversant with income tax matters and for income tax matters, he is fully dependent on his tax consultant. on behalf of the appellant Sri Dipanshu Gupta his tax consultant register his mail ID and mobile no. on income tax portal for various types of communication with the department. In this process, the appellant failed to get any recent communications and developments of his income tax matters. 2.) That due to some dispute, the Tax consultant of the appellant Sri Dipanshu Gupta is not at all co-operating with the appellant for nearly last one year. For this reason, the income tax matters of the appellant remain pending. 3.) That the appellant Sri Dipanshu Gupta was also involved in various types of business related legal troubles / issues. For smooth running of the business, Sri Dipanshu Gupta had to concentrate on his legal matters. As a result of those legal issues, all his current and pending income tax proceedings remained unnoticed and unattended. 4.) That the appellant only recently came to know the incident of ex-parte appeal orders u/s 250 dated 07.06.2024 for AY 2017-18. 5.) Then after, the appellant began to find out a new tax consultant for his income tax matters and ultimately decided to file appeal against the said appellate order for the aforesaid assessment year. In this process, there is lapse of total 119 days in filing the appeal against order u/s 250 dated 07.06.2024. Now considering the above stated situation and also keeping in mind that the appellant is not conversant with income tax matters, kindly condone the delay of 119 days in filing appeal and allow the appellant to file appeal.” 1.2. Considering the applications for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeals within the statutory time limit. We, therefore, condone the delay and admit the appeals for adjudication. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: Page | 4 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 4 of 10 AY 2015-16 “1.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in passing the order u/s 250 dated 29.07.2024 on exparte view without going into the merits of the case. 2.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the initiation of reassessment proceedings u/s 147 of the Act by the AO. 3.) (a) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the huge addition of Rs. 53,87,175/- u/s 69A r.w.s. 115BBE of the Act without going into the merits of addition. (b) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who considered entire credits in Bank A/c without considering the contra entries and accepted commission income @ 1% without any basis. 4.) That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing.” AY 2017-18 “1.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in passing the order u/s 250 dated 07.06.2024 on exparte view without going into the merits of the case. 2.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the initiation of reassessment proceedings u/s 147 of the Act by the AO. 3.) (a) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the huge addition of Rs. 4,84,23,000/- u/s 69A r.w.s. 115BBE of the Act without going into the merits of addition. (b) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who considered entire credits in Bank A/c without considering the contra entries and accepted commission income @ 1% without any basis. 4.) That the appellant craves leave to add, alter, adduce or amend any ground or grounds on or before the date of hearing.” We will first take up ITA No. 2448/KOL/2024 being the appeal for AY 2015-16. Page | 5 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 5 of 10 3. Brief facts of the case are that the assessee is an individual and had furnished return of income for the AY 2015-16 in ITR-4 declaring total income of Rs. 2,59,850/-. The return was processed u/s 143(1) of the Act on 09.01.2016 on the same amount of income and subsequently, notice u/s 148 of the Act was issued on 30.03.2021, but no fresh return of income was filed in response to the notice issued u/s 148 of the Act. The assessee also did not comply to the subsequent notices issued and therefore, the Assessing Officer (hereinafter referred to as ld. 'AO') passed the assessment order 147 read with Section 144 read with Section 144B of the Act on 25.03.2022 and the total income was assessed at Rs. 56,47,025/- in which only one addition of Rs. 53,87,175 as unexplained money u/s 69A of the Act was made. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who vide order dated 29.07.2024 dismissed the appeal as the assessee did not produce relevant details/documents despite the opportunities provided by the Ld. AO and also during the appellate proceeding failed to comply with the notices issued. The assessee had requested for adjournment before the Ld. CIT(A) on 17.07.2023 but since he did not comply with the subsequent two notices dated 11.07.2024 and 19.07.2024 issued by the office of the Ld. CIT(A), it was inferred by the Ld. CIT(A) that the assessee was not interested in pursuing the appeal and the appeal was dismissed. Reliance was placed upon the decisions in the case of CIT Vs. B.N. Bhattachargee & Another 118 ITR 461 (relevant pages 477 and 478), Estate of Late Tukoji Rao Holker Vs. CWT 223 IR 480 (MP), CIT Vs. Multiplan India Pvt. Ltd. 38 ITD 320 (Del). The Ld. AR who appeared before the Bench submitted that the orders before the Ld. AO as well as the Ld. CIT(A) were made ex parte and requested that the matter may be set aside and Page | 6 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 6 of 10 the assessee may be granted another opportunity to make proper representation before the Ld. AO. The Ld. Sr. DR supported the order of the Ld. CIT(A) but raised no serious objection on the request of the Ld. AR to remit the matter to the Ld. AO as the assessee has sufficient evidence to explain the deposits in the bank account. While making assessment the Ld. AO noted on perusal of the ITR filed by the assessee that the assessee did not disclose his bank accounts in the return of income. The bank accounts were A/c. No. 50200006355716 maintained with HDFC Bank, A/c. No. 627705055427 and 627705055070 maintained with ICICI Bank. The income was estimated @ 1% of the accommodation entries of Rs. 57,22,23,272/- being total credits in the three bank accounts by inferring as under: “On perusal of the ITR filed by the assessee, it is observed that the assessee did not disclose these bank a/c in his return of income. It is observed that huge fund has been credited and immediately the fund is transferred to other concerns almost of identical amount and leaving a minimum balance in the account without any business or economic rationale. Considering the nature of transactions in the said bank a/c and also considering the fact that the assessee is not the real beneficiary, it can be said that the account of the assessee has been used for the layering of funds in lieu of commission. After the process of such debits and credits, the fund got credited to its final destination i.e. in the account of beneficiaries. As there is no fixed percentage of commission in this line of transactions, it is to be fair enough to consider commission @ 1% on the said accommodation entry of Rs. 57,22,23,272/- (total credit of Rs. 57,22,23,272/-). Therefore, it can be said that he earned Rs. 57,22,230/-, From the ITR filed by the assessee for the A.Y. 2015-16, it is noticed that the assessee had shown income from business of Rs. 3,35,055/- as commission income. Therefore, it can be construed that the assessee had not considered commission income of Rs. 53,87,175/-and the amount of Rs. 53,87,175/-remained unexplained & undisclosed. Since the assessee did not furnish/produce any reply/document in his support, Hence the entire amount of Rs. 53,87,175/- is treated as unexplained money of the assessee u/s 69A of the income tax act, 1961 and added to the total income returned by the assessee.” Page | 7 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 7 of 10 4. Before the Ld. CIT(A) for condonation of delay the assessee submitted facts as under: “In the instant case the assessment order under section 147/144/144B of the IT Act, 1961 was completed on 25.03.2022. So the due date of filing of appeal before the Ld. CIT(A) was 24.04.2022, but the appellant individual due to following reasons was unable to submit the appeal before the CIT(A) within the due date. 1.) Due to some issue not related with income tax issues, the appellant Sri Dipanshu Gupta was in imprisonment for the period from January 2022 to April 2022. As a result of the imprisonment of appellant, all his current and pending issues were in a very bad position and all the issues were unnoticed and unattended. 2.) Further, the appellant Sri Dipanshu Gupta is not conversant with income tax matters and for income tax matters, he is fully dependent on his lawyer Shri K.K. Jha, CA. On the other hand, Shri K.K. Jha forwarded his user ID and password with the department for various types of communication with the department on behalf of the appellant Sri Dipanshu Gupta. In this process, the assessee failed to get any recent developments of his income tax matters. 3.) Again, Sri, K.K. Jha is an old man and during the year year 2021, he was 77 and he was suffering from various old age diseases. Due to his prolonged illness. Sri Jha was unable to look after the various income tax affairs of his clients. In this process, the various notices, assessment order etc missed by the appellant. 4.) Due to the outbreak of the worldwide, COVID-19 pandemic and nationwide lockdown since 24.03.2020. The movement of ailing K.K. Jha was very restricted and he hardly move out of his house, so he failed to keep track of the various recent developments of income tax matters of his clients. 5.) Ultimately Sri K.K. Jha died on 27.01.2018 days after the death of Shri K.K. Jha, the appellant take interest of his income tax affairs and only recently came to know the incident of ex-parte assessment order under section 147/144/1448 dated 25.03.2022, penalty order under section 271(1)(b) dated 15.09.2022 & u/s 271(1)(c) dated 23.09.2022, assessment order u/s 147/144 dated 27.03.2022 for the assessment year 2017-18 and penalty order u/s 71AAC(1) dated 27.09.2022. 6.) Then, after the appellant began to search a new tax consultant for his income tax matters and ultimately selected S. Jaykishan as his new CA firm for his income tax affairs. In this process, there is lapse of total 366 days in Page | 8 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 8 of 10 filing the appeal against order u/s 147/144/1448 dated 25.03.2022. Now considering the above stated situation and also keeping in mind that the appellant is not conversant with income tax matters kindly condone the delay of 366 days in filing appeal and allow the appellant to file appeal before your good office.” 5. Before the Ld. CIT(A) also the assessee did not submit any documentary evidence and the submission regarding the demise of the Chartered Accountant Mr. K.K. Jha was found to be contradictory. The fact remains that there was no proper representation before either the Ld. AO or even before the Ld. CIT(A). 6. It is observed that the Ld. CIT(A) has accepted the justification for the delay and condoned the delay in filing the appeal. It is also observed that the assessment order is dated 25.03.2022 and same facts are equally applicable to the assessment order that the assessee was in imprisonment for the period from January, 2022 to April, 2022 and as a result of the imprisonment of the assessee, all his current and pending issues were in a very bad position and all the issues went unnoticed and unattended and after the death of his Ld. Counsel Mr. K.K. Jha, the assessee was made aware of the ex parte order and he engaged a new consultant which resulted in lapse of 366 days in filing the appeal. While the Ld. CIT(A) has accepted the reason for the delay in filing the appeal but did not consider the same sufficient for non-compliance. The order of the Ld. CIT(A) is dated 29.07.2024. Since the reasons for non- compliance were not same as for those filing the appeal in time before the Ld. CIT(A) as well as non-representation before the Ld. AO, therefore, in the interest of justice and fair play it was considered imperative by the Bench that the order of the Ld. AO may be set aside and the assessee may be granted another opportunity. Page | 9 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 9 of 10 7. As regards the assessment order of AY 2017-18, the same is dated 27.03.2022 and the appeal before the Ld. CIT(A) is also delayed. The Ld. CIT(A) has accepted the reason for the delay in filing the appeal and condoned the same but treated the appeal as non-maintainable and dismissed the same. During the year the total deposits in the bank accounts 5,24,23,00,000/- on which commission @ 1% was estimated by the Ld. AO and as the assessee had shown Rs. 40,00,000/- as commission income the balance amount of Rs. 4,84,23,000/- was added to the income of the assessee. Since the facts are identical and neither before the Ld. AO nor even before the Ld. CIT(A) the assessee could make proper representation on account of being imprisoned, therefore, both the orders of Ld. CIT(A) as well as the Ld. AO are set aside and the Ld. AO is directed to make fresh assessment de novo after granting opportunity of being heard to the assessee for both the assessment years. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes. 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 23rd April, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 23.04.2025 Bidhan (P.S.) Page | 10 I.T.A. Nos.: 2448 & 2449/KOL/2024 Assessment Years: 2015-16 & 2017-18 Dipanshu Gupta. Page 10 of 10 Copy of the order forwarded to: 1. Dipanshu Gupta, 104, Naskar Para Road, Ghusuri, Howrah, West Bengal, 711104. 2. ITO, Ward -37(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "