GHEVERCHAND RIKHABCHAND JAIN,MUMBAI V. ACIT, CIRCLE 4(2)(1), MUMBAI

SA 14/MUM/2025

AI Insights

The case involves Gheverchand Rekhabachand Jain, the appellant, who sought a stay on the recovery of an outstanding tax demand for the assessment year 2014-15. The demand arose from additions made by the Assessing Officer under section 68 of the Income Tax Act, concerning unsecured loans and interest thereon. The appellant contested that the orders passed by the CIT(A) and the Assessing Officer were made without providing a reasonable opportunity of hearing. The Departmental Representative opposed the stay, arguing that the assessee's submissions were considered. The Tribunal found procedural lapses and substantial compliance by the assessee in terms of tax payment, leading to the decision to grant the stay.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37462 (ITAT-MUMBAI)
• Appeal Type: Stay Application
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUSHKARAJ BHANGEPATIL
• Assessee Lawyers: DHARAN GANDHI; VINITA NARA
• Keywords: Proportionate interest; Additional evidence; Application of stay; Extension of stay
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER S.A. No. 14/MUM/2025 (Arising out of ITA No.6619/MUM/2024) (Assessment Year : 2014–15) Gheverchand Rekhabachand Jain, 13/14, Kewal Industrial Estate, Senapati Bapat Mar, Lower Parel, Mumbai-400013. PAN: AABPJ 4847 P ……………. Appellant v/s Asst. CIT Circle 4(2)(1), Mumbai. ……………. Respondent Assessee by : Mr. Dharan Gandhi & Ms. Vinita Nara Revenue by : Mr. Pushkaraj Bhangepatil, Sr. DR Date of Hearing – 31/01/2025 Date of Order – 03/02/2025 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present Stay Application in ITA No. 6619/Mum/2024, for the assessment year 2014-15, seeking a grant of stay on recovery of outstanding demand of Rs.4,68,39,980/-. 2. During the hearing, the learned Authorized Representative (“learned AR”) submitted that the learned CIT(A) as well as the Assessing Officer has passed the order without affording reasonable opportunity of hearing to the assessee. The learned AR submitted that the AO made the S.A. No. 14/Mum./2024 2 additions resulting in the impugned demand without issuing any show cause notice and in further appeal before the learned CIT(A), the order was passed without awaiting the remand report from the AO in response to the additional evidence filed by the assessee. 3. On the other hand, the learned Departmental Representative (“learned DR”) submitted that all the objections/submissions of the assessee were duly considered by the Assessing Officer as well as by the learned CIT(A). Accordingly, the learned DR vehemently opposed the Stay Application and submitted that the assessee be directed to deposit the substantial amount of tax. 4. The brief facts of the case are that the assessee is an individual and is engaged in carrying on business as a trader in shares and securities and advancing loans against immovable properties. For the year under consideration, the assessee filed his return of income on 21.10.2014, declaring a total income of Rs.5,97,270/-. The return filed by the assessee was selected for scrutiny, and in response to the statutory notices, the assessee submitted confirmation of loan accounts and acknowledgement of the return of income of loan parties in support of unsecured loans availed during the year under consideration. The Assessing Officer completed the assessment after making the following additions: - Particulars Amount Cash credit u/s 68 (Unsecured loan taken) 13,47,45,627/- S.A. No. 14/Mum./2024 3 Interest paid on abovesaid loan taken 2,85,20,550/- Without prejudice to above, Proportionate Interest paid 2,40,06,629/- 5. In its appeal before the learned CIT(A), the assessee filed his detailed submissions and also furnished additional evidence. Accordingly, the learned CIT(A) sought a remand report from the concerned Assessing Officer. As per the assessee, in response to the notices issued during the remand proceedings, the assessee made its submissions. Subsequently, the appeal pending before the learned CIT(A) was transitioned to the National Faceless Appeal Centre and notices for the hearing were issued on 27.01.2021, 10.08.2022, 21.09.2023, 02.11.2023, 21.10,2024 and 19.11.2024. However, the assessee could not respond to any of the aforesaid notices and the learned CIT(A) dismissed the appeal filed by the assessee due to non-appearance on behalf of the assessee. 6. Having considered the submissions of both sides and perused the material available on record, we find that prima facie the balance of convenience lies in favour of the assessee. We further find that in the original notice of demand dated 29.12.2016 issued u/s 156 of the Act, the Assessing Officer raised a demand of Rs.6,43,14,300/-, which was revised on 14.01.2025 raising demand of Rs.4,65,39,980/-, after considering an amount of Rs.1,77,74,320/- paid by the assessee, which constitutes more than 27% of the original demand. S.A. No. 14/Mum./2024 4 7. Thus, in view of the first proviso to section 254(2A) of the Act, we are of the considered opinion that this is a fit case for a grant of stay on recovery of outstanding demand for a period of 180 days from the date of this order or till the disposal of the assessee’s corresponding appeal, whichever is earlier, subject to the condition that the assessee will not seek any adjournment without a just cause. In case of violation of the above condition, the stay herein granted shall be vacated and the appeal shall revert to its original position to be fixed in routine course. With these observations and subject to the condition, the Stay Application of the assessee is allowed. Needless to mention, during the continuation of stay on recovery of outstanding demand, the Revenue shall not take any coercive action against the assessee for the recovery of outstanding demand. 8. In the result, the Stay Application filed by the assessee is allowed. Order pronounced in the open Court on 03/02/2025 Sd/- -AMARJIT SINGH ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 03/02/2025 Rahul Sharma, Sr. P.S. S.A. No. 14/Mum./2024 5 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. True Copy By Order Assistant Registrar ITAT, Mumbai "