DURLABHJI KANJIBHAI SINOJIYA,MORBI V. ITO, WARD-5(3), MORBI, MORBI

ITA 357/RJT/2024

AI Insights

The case involves Durlabhaji Kanjibhai Sinorjiya, the appellant, who contested the order of the CIT(A) regarding the reassessment of income for the assessment year 2009-10. The reassessment was based on information from a search operation that revealed the appellant's involvement in transactions deemed to be accommodation entries, which were used to justify the purchases of shares and bring unaccounted funds into the books. The CIT(A) dismissed the appeal ex-parte due to non-compliance with multiple notices. The ITAT found that the CIT(A) did not adequately address the issues raised in the appeal and granted another opportunity for the appellant to present his case.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472613 (ITAT-RAJKOT)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-10-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 20-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: MEHUL RANPURA
• Keywords: Corroborative evidences; Third party statement; Accommodation entries; Bogus
• Section: 147; 148; 142(1); 143(2); 143(1)

Judgement Text

" आयकर अपीलȣय अͬधकरण,राजकोट Ûयायपीठ, राजकोट। IN THE INCOMETAXAPPELLATE TRIBUNAL, RAJKOT BENCH: RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER And SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No. 357/RJT/2024 (Ǔनधा[रण वष[/Assessment Year: (2009-10) Durlabhaji Kanjibhai Sinorjiya, Anupam Society Ravapar Road, Morbi, Dist: Morbi-363641 Vs. Assistant Commissioner of Income Tax, Circle-2(2), Rajkot èथायी लेखा सं./जीआइआरसं./PAN/GIR No.: AESP0922B (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Ǔनधा[ǐरती कȧ ओर से/Appellant by : Shri Mehul Ranpura, A.R. राजèव कȧ ओर से/Respondent by : Shri Abhimanyu Singh Yadav, Sr. D.R. सुनवाई कȧ तारȣख/ Date of Hearing : 09/10/2024 घोषणा कȧ तारȣख/Date of Pronouncement : 15/10/2024 आदेश / O R D E R PER SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals) [in short, “the Ld. CIT(A)”], National Faceless Appeal Centre (in short “NFAC”), Delhi order dated 30.08.2023for assessment year 2009-10. 2. The assessee has raised the following grounds of appeal:- “1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the \"CIT(A)\"] erred on facts as also in law in dismissing the appeal ex-parte. 3. Ld. CIT(A) erred on facts as also in law in not deciding the ground of appeal related to validity of notice issued u/s 148 of the Income tax Act, 1961. Page | 2 ITA No.336/RJT/2024 A Y:2009-10 That on facts as also in law, initiation of action u/s. 147 of the Act is invalid and assessment made on such invalid initiation deserves to be quashed and may kindly be quashed. 4. The Id. CIT(A)erred on facts as also in law in confirming addition of Rs.14,81,754/- being sale proceeds of sale of shares of Mahapoly Tube on the alleged ground of accommodative entry. The addition confirmed is unjustified and uncalled for, which may kindly be deleted. 5. The Id. CIT(A)erred on facts as also in law in confirming addition of Rs.2,222/- being alleged commission expenses said to have been paid on the above accommodative entry. The addition made and confirmed is bad in law as also on facts therefore the same may kindly be deleted. 6. Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal. 3. The brief facts of the case are that the assessee is an individual deriving pension income from other sources and long term capital gain. The assessee filed return of income on 02-09-2019 declaring income of Rs. 88,460/-. Income was assessed u/s. 143(1) of the Act (hereinafter referred to as the \"Act\") without any modification. During the search u/s 132 of the Act in the case of M/s. Mahasagar Securities Pvt. Ltd. (MSPL) now M/s. Alliance Intermediateries & Network Pvt. Ltd. (AINPL) and its group companies and concerns, it was noticed that the said searched parties were engaged in providing bogus bills of sales and purchases of securities, the directors of companies were engaged in fraudulent billing activities and in the business of providing bogus speculation profit/loss, short term/long term capital gain/loss for trading in shares and securities and in commodities. Further, from seized computer date, a list of clients/beneficiaries who have taken entries from the above companies were extracted and it was reported by DDIT Unit 1(4), Mumbai that the transactions entered into by the beneficiaries with the searched parties were bogus and were represented the undisclosed income of the Page | 3 ITA No.336/RJT/2024 A Y:2009-10 beneficiaries for assessment year 2009-10 It was reported that the appellant was one of the party appearing in the said list forwarded by the DDIT (Inv.)-1(4), Mumbai who also forwarded the details of transactions by the appellant with AINPL. On the basis of above information the case was re-opened by issuing notice u/s. 148 of the Act on 27.03.2014 and served upon the appellant on 28.03.2014 requiring the appellant to file her return of income and the appellant duly complied with the said notice by filing letter dated 23.04.2014 requesting therein to treat her return of income filed on 02.09.2009 as the return of income filed in pursuance of the notice u/s. 14 of the Act. During reassessment u/s. 147, as noted at Para 5 of assessment order, the appellant, in response to notices issued u/ss. 142(1) and 143(2) of the Act, furnished various details, which inter all included contra confirmation from AINPI, contract notes, copies of bills raised by the company, copies of bank account etc However, the AO vehemently contended from verification of the above details that bills issued by AINPL were bogus and not genuine and it was taken just for the sake of getting accommodation entries to justify the purchases of shares shown as stock and a device employed to bring unaccounted fund into the books of account. That the assessee has replied to the notice on 16-03- 2015 . Subject to the above remarks and details made available on record and also after discussion, the total income of the assessee is computed as under:- 4. Aggrieved by the order dated 17-03-2015 fo the ld. AO, the assessee filed an appeal before the office of ld. CIT(A). The ld. CIT(A) has disposed of the appeal after giving seven notices and there was no compliance to any notice. The ld. CIT(A) has disposed of the appeal with following observations:- ”Since the assessee has failed to submit details pertaining to the present appeal and raise grounds of appeal against the order of the Assessing Officer the undersigned has left with no other alternative but to reject the appeal The appellant has not submitted Page | 4 ITA No.336/RJT/2024 A Y:2009-10 any supporting evidences to substantiate the filing of this appeal No response has been received from the assessee during the appellate proceedings Under these circumstances, the appeal is decided on the basis of data available on record The appellant has not filed any evidences to controvert the order of the AO As, it is clear that the assessee has not made any submissions in spite of giving several opportunities the action of the AO is upheld and the appeal of the assessee is hereby rejected. 5. Against this impugned order, the assessee filed an appeal before the ITAT, Rajkot. During the course of hearing, the ld. AR submitted that the old accountant has changed his password because of that the ld. counsel of the appellant could not perused the website of the Department. In this way, the notices were not duly complied with and the appellant prayed for one more opportunity to represent his case before the ld. CIT(A). On the contrary, the ld. DR submitted that this is a case of AY. 2009-10 more than 14 years has gone. It is difficult to verify the content, however the ld. DR has not objected the prayer of the appellant for granting opportunity. 6. We have heard the matter and perused the materials available on record. We find that the assessee duly appeared before the AO and joined the assessment proceedings and the petitioner is a regular return filer. However, the ld. CIT(A) has issued seven notices, first notice was given on 01-03-2021 and the 7th notice was given on 26-03-2024. It is further noted that the order of the ld. CIT(A) issued but not talked about anything about the notice whether served on the assessee or not. We further noted that the ld. CIT(A) passed order ex-parte and has not decided the issue in respect of grounds raised by the assessee in memo of appeal as per the mandate of provisos of section 250(6) of the Act. Hence, we are of the view that one more opportunity should be given to the assessee to plead his case before the ld. CIT(A). Therefore, we set aside the order of ld. CIT(A) and remit the matter back to the file of AO to adjudicate the issue afresh on merit after giving reasonable opportunity of Page | 5 ITA No.336/RJT/2024 A Y:2009-10 being heard to the assessee. We further direct to the appellant to comply with the notice issued by the ld. CIT(A) and joined the appellate proceedings. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order is pronounced on 15/10/2024 in the Open Court. Sd/- Sd/- (DR. ARJUN LAL SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot TRUE COPY Ǒदनांक/ Date: 15/10/2024 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6.Guard File. By Order, Assistant Registrar/Sr. PS/PS ITAT, Rajkot "