HEMANTKUMAR DHANSUKHLAL KANSARA,NAARI V. ITO, WARD-2, NAARI

ITA 986/SRT/2024

AI Insights

The case involves two appeals by Hemantkumar Dhansukhlal Kansara against the orders of the Commissioner of Income-tax (Appeals) for the assessment years 2012-13 and 2013-14. The appeals were related to additions made under section 69A of the Income-tax Act, concerning unexplained deposits in the assessee's bank account. The Assessing Officer had reopened the assessment based on information from the DDIT (Inv.), Mumbai, and made additions due to non-compliance by the assessee in responding to notices. The CIT(A) upheld these additions, leading to the appeals before the Tribunal. The Tribunal found that the assessee was not given adequate opportunities of hearing, thus violating the principles of natural justice, and remitted the matter back for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 39090 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA; MUKESH JAIN
• Assessee Lawyers: RAJESH M UPADHYAY
• Keywords: Set aside; Principle of natural justice
• Section: 147; 148; 144; 142(1); 250; 69A

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Æयायपीठ, सूरत 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 Nos.985 & 986/SRT/2024 (िनधाªरण वषª /Assessment Year: 2012-13 & 2013-14) (Physical Hearing) Hemantkumar Dhansukhlal Kansara 4-313, Avani Exports, Patwa, Navsari – 396 445 बनाम Vs. Income Tax Officer, Ward-2, Navsari, Income Tax Office, Charpool, Awabaug, Navsari -396 445 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AETPK 7498 B (अपीलाथȸ/Appellant) (Ĥ×यथȸ /Respondent) िनधाŊįरती की ओर से /Appellant by Shri Rajesh M Upadhyay, AR राजˢ की ओर से /Respondent by Shri Ravi Kant Gupta, CIT-DR & Mukesh Jain, Sr. DR अपील पंजीकरण/Appeal instituted on 24/09/2024 सुनवाई की तारीख/Date of Hearing 26/12/2024 उद ्घोषणा की तारीख/Date of Pronouncement 26/12/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: These two appeals by the assessee emanate from the separate orders passed under section 250 of the Income-tax Act [in short, ‘the Act’] of the Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [in short, ‘the CIT(A)’], both dated 31.07.2024 for the assessment years (AYs) 2012-13 and 2013-14. In both appeals, the facts are common and grounds of appeals raised by the assessee are similar except variance of amounts. Hence, with the consent of the parties, both the appeals are clubbed and heard together and are decided by this consolidated order for sake of convenience 2 ITA Nos.985 & 986/SRT/2024 (AYs 12-13 & 13-14) Hemantkumar D Kansara and brevity. Grounds of appeal raised by the assessee in ITA No. 985/SRT/2024 for AY 2012-13, treated as “lead” case, are as follow: “1. Ld CIT(A), NFAC, Delhi has erred in law and on fact to confirm AO’s addition of Rs.23,21,500/- made u/s 69A being to total deposits/credits in appellant’s bank account No.013072400001 with HSBC Bank ignoring the bank statement that deposits are made out of earlier withdrawal from the same bank account of the appellant. 2. Additional Ground: The AO has erred in law and on fact to reopen appellant’s assessment u/s 147 and issue of notice u/s 148 of the Act merely on the basis of Information from DDIT (Inv.), Unit 1(1), Mumbai that the appellant had deposited/credited Rs.23,21,500/- in his bank account with HSBC Bank during AY 2012-13. Ld.CIT(A), NFAC, Delhi has also erred in upholding the action of the AO.” 3. Brief facts of the case are that the assessee had not filed his original return of income for AY.2012-13. As per the information received from DDIT(Inv.) Unit 1(1), Mumbai, assessee had deposited/credited total amount of Rs.23,21,500/- in his bank account No.013072400001 maintained with HSBC Bank during the subject assessment year. As assessee had not filed his ITR, source of credit/cash deposit remained undisclosed and unexplained. The case was accordingly reopened u/s 147 of the Act after obtaining prior approval of Ld.PCIT, Valsad after recording the reasons. Notice u/s 148 was issued on 29.03.2019. Subsequently, notices u/s 142 and show cause notice were issued to assessee which were not responded to. The AO has given the above details in para-3.2 of the assessment order. The show cause notice is at para-4.3 of the assessment order. Due to non-compliance of the assessee to the notices u/s 142(1) and show cause notice, AO made best judgment assessment u/s 144 of the Act by adding Rs.23,21,500/- u/s 69A of the Act. 3 ITA Nos.985 & 986/SRT/2024 (AYs 12-13 & 13-14) Hemantkumar D Kansara 4. Aggrieved by the order of AO, the assessee filed appeal before CIT(A). The CIT(A) issued four notices fixing the hearing on 08.01.2021, 02.08.2023, 24.11.2023 and 10.07.2024. In the last notice, the assessee was required to furnish written submission on or before 25.07.2024. The assessee did not file any reply in response to the above notices. Therefore, the CIT(A) has decided the appeal on the basis of the materials available on record including the assessment order. He observed that law assists those who are vigilant about their rights and not those who sleep over the matter. The onus was on the appellant to explain the cash deposit and credit entries appearing in the bank account. However, appellant failed to substantiate his claim and no documentary evidence was submitted to explain the nature and sources of cash deposit and the credit entries. Hence, he held that AO was justified in making addition of Rs.23,21,500/- u/s 69A of the Act. The appeal was dismissed. 5. Aggrieved by the order of Ld. CIT(A), the assessee filed appeal before the Tribunal. The Learned Authorized Representative (Ld. AR) of the assessee submitted that the assessee is engaged in hospitality services. He submitted that the appellant was not given adequate opportunity of hearing by the lower authorities. He submitted that the AO has passed an order u/s 144 r.w.s. 147 after issuing show cause notice. He further submitted that the CIT(A) has issued the last notice on 10.07.2024 and fixed the hearing on 25.07.2024. He passed the order u/s 250 of the Act immediately thereafter on 31.07.2024. It shows that the order was passed without hearing the assessee in violation of the 4 ITA Nos.985 & 986/SRT/2024 (AYs 12-13 & 13-14) Hemantkumar D Kansara principles of natural justice. He submitted that another opportunity may be given to the assessee to pleads his case on merit. The Ld.AR also raised additional ground on validity of reopening the assessment/s 147 of the Act. 6. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) of the Revenue supported the order of lower authorities. He submitted that the AO has given three notices and show cause notice which is clear from the table at 3.2 of the assessment order which have not been replied to. Similarly, the CIT(A) also issued four notices which remained unanswered. Hence, the assessee has been negligent and non-cooperative due to which the addition made by the AO was rightly confirmed by CIT(A). He submitted that the additional ground should not be admitted as such ground was not raised earlier. 7. We have heard both the parties and perused the materials available on record. It is an undisputed fact that the assessee has been totally non- cooperative to the statutory notices and the show cause notice issued to him by the AO and the CIT(A). It is further seen that assessee had not filed his original return of income of AY.2012-13 though there were cash deposit and credit entries to the extent of Rs.23,21,500/- in his bank account with HSBC Bank. We also find that the CIT(A) has also issued four notices which were not replied to. Therefore, the CIT(A) passed the order after six days from the last date of hearing. Considering all these facts, we are of the view that the assessee was negligent and non-cooperative before the lower authorities. The Ld. AR 5 ITA Nos.985 & 986/SRT/2024 (AYs 12-13 & 13-14) Hemantkumar D Kansara requested that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit. Considering the facts of the case, we are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, we hold that the interests of justice would be met in case the AO re-examines the entire issue afresh subject to payment of cost of Rs.10,000/- (Rupees ten thousand only) by the assessee to the credit of the Gujarat High Court Legal Aid Authority within two weeks from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO with a direction to pass de novo assessment order with law after granting adequate opportunity of hearing to the assessee. The assessee is given liberty to raise any new issue before the AO. The assessee is directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the AO by not seeking adjournment without valid reasons. With these directions, the grounds of appeal and additional ground raised by the assessee are allowed for statistical purposes. 8. In the result, appeal of assessee is allowed for statistical purposes. ITA No.986/SRT/2024 (A.Y 2013-14) 9. The CIT(A) has also passed a similar order as was the order u/s 250 of the Act for AY 2012-13 (supra) discussed above. Therefore, following the reasons given therein, we remit the issue back to the file of AO with similar observation in ITA No.985/Srt/2024 (supra) subject to payment of cost of Rs.15,000/- 6 ITA Nos.985 & 986/SRT/2024 (AYs 12-13 & 13-14) Hemantkumar D Kansara (Rupees fifteen thousand only) by the assessee to the credit of the Gujarat High Court Legal Aid Authority within two weeks from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO with a direction to pass de novo assessment order in accordance with law after granting adequate opportunity of hearing to the assessee. 10. In the result, the appeal is allowed for statistical purposes. 11. In combined result, both appeals of the assessee are allowed for statistical purposes. Registry is directed to place one copy of this order in both the appeals folder / case file(s). Order pronounced on 26/12/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) Æयाियक सदÖय/ Judicial Member लेखा सदÖय/ Accountant Member Ǒदनांक/ Date: 26/12/2024 Dkp Outsourcing Sr.P.S* आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Appellant  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ (अपील)/ The CIT(A)  िवभागीय ÿितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडª फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत "