HEMLATA HARAKCHAND SHAH,AHMEDABAD V. THE ITO, WARD-6(1)(4), AHMEDABAD

ITA 835/AHD/2025

AI Insights

This case involves an appeal by Hemlata Harakchand Shah against the order of the Commissioner of Income Tax (Appeals), which confirmed an ex-parte assessment order under sections 144 and 147 of the Income Tax Act. The reassessment was based on information that the assessee had engaged in share transactions in a penny stock company, M/s. Hemo Organics Limited, without filing a return of income. The Assessing Officer treated the total amount of these transactions as unexplained investment and added it to the assessee's income. The CIT(Appeals) dismissed the appeal due to non-compliance with the mandatory provisions of Section 249(4) of the Act, as the assessee had not paid the advance tax due nor filed an application for exemption from this requirement. The ITAT, considering the substantial addition made and the interest of justice, decided to give the assessee another opportunity to present her case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717378 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 22-04-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATEEK SHARMA
• Assessee Lawyers: BIREN SHAH
• Keywords: Opportunity of being heard; Reassessment proceedings; Corroborative evidences; Unexplained investment; Cost of acquisition
• Section: 148; 144; 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER I.T.A. No.835/Ahd/2025 (Assessment Year: 2012-13) Hemlata Harakchand Shah, B/10, Shalin Apartments, Jawahar Chowk, Maninagar, Ahmedabad-380008 Vs. Income Tax Officer, Ward-6(1)(4), Ahmedabad [PAN No.CJEPS9180A] (Appellant) .. (Respondent) Appellant by : Shri Biren Shah, AR Respondent by: Shri Prateek Sharma, Sr. DR Date of Hearing 06.08.2025 Date of Pronouncement 13.08.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 31.01.2024 passed for A.Y. 2012-13. 2. At the outset, we observe that the appeal is time barred by 22 days. The delay of 22 days is condoned on due consideration of facts of assessee’s case and owing to causing no perceptible prejudice to other side. 3. The assessee has raised the following grounds of appeal: “1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT (Appeals) has erred in not admitting the appeal filed by the appellant and thereby confirming the order passed u/s. 144 r.w.s. 147 of the Act, which was void and deserves to be quashed. Printed from counselvise.com ITA No. 835/Ahd/2025 Hemlata Harakchand Shah vs. ITO Asst. Year –2012-13 - 2– 2. Without prejudice to the above, in law and in the facts and circumstances of the appellant's case, the Hon'ble ITAT is requested to consider the facts of the case, wherein the addition has been made on the basis of allegation that the appellant has failed to furnish any detail with regard to the share transaction aggregating to Rs. 13,32,916/- in the penny stock company M/s.Hemo Organics Limited during the year, without bringing on record the details of so-called transactions of Rs. 13,32,916/- to demonstrate that the appellant has carried out transaction of the total value of Rs. 13,32,916/-. 3. Without prejudice to the above, in law and in the facts and circumstances of the appellant's case, the Ld. CIT (Appeals) may be directed to admit the appeal of the appellant and delete the unsubstantiated addition made in the case of the appellant, without bringing on record the details of so-called transactions of Rs. 13,32,916/- to demonstrate that the appellant has carried out transaction of the total value of Rs. 13,32,916/-. 4. Without prejudice to the above, in law and in the facts and circumstances of the appellant's case, the appellant's total income should be determined after considering the actual sale value of shares of Memo Organics Limited amounting to Rs. 7,03,089/-, as against the purchase cost of Rs. 4,55,104/-, resulting into short term capital gain of Rs. 2,47,985/-. 5. The appellant craves leave to add, amend, withdraw and/or alter the ground or grounds of appeal either before or at the time of hearing of the appeal.” 4. The brief facts of the case are that reassessment proceedings were initiated in case of the assessee on the basis of information available with the Department demonstrating that the assessee had engaged in share transactions aggregating to ₹13,32,916/- in the shares of M/s. Hemo Organics Limited, a penny stock company, during the relevant assessment year. However, the assessee had failed to file her return of income under Section 139(1) of the Act. Accordingly, the Assessing Officer reopened the assessment and notice under Section 148 of the Act was served upon the assessee. The Assessing Officer noted that despite issuance of notice issued notice u/s 148 of the Act, the assessee did not file a return of income. Subsequently, a notice under Section 142(1) of the Act along with a detailed questionnaire, was issued and served on the assessee, yet no Printed from counselvise.com ITA No. 835/Ahd/2025 Hemlata Harakchand Shah vs. ITO Asst. Year –2012-13 - 3– compliance was made by the assessee. Given the assessee’s failure to respond to any of the statutory notices or submit any explanation regarding the share transactions, the Assessing Officer proceeded to finalize an ex- parte assessment under Section 144 of the Act. The total amount of ₹13,32,916/- was treated as unexplained investment and added to the income of the assessee for the impugned year under consideration. 5. In appeal, CIT(Appeals) dismissed the appeal of the assessee for statistical purposes on the ground of non-compliance with the mandatory provisions of Section 249(4) of the Act. The CIT(Appeals) observed as per the assessment order the Assessing Officer had computed the total income at ₹13,32,916/- and computed the tax liability accordingly. However, the assessee neither filed a return of income nor paid the advance tax due prior to filing the appeal before CIT(Appeals). Pursuant to this, a deficiency letter was issued to the assessee, requiring the assessee to comply with the requirements of Section 249(4)(b) by either furnishing proof of advance tax payment or making an application for exemption under the proviso to the said section. The assessee failed to respond to the deficiency letter and no reply or compliance was received from the side of the assessee by CIT(Appeals) thereafter. Further, CIT(Appeals) observed the assessee did not furnish any particulars of advance tax payment in Form No. 35 and wrongly marked the relevant column as “Not Applicable,” although Section 249(4)(b) clearly applied in the assessee’s case. The CIT(Appeals) noted no application seeking exemption from the operation of the said provision was also filed by the assessee, leaving the CIT(A) with no Printed from counselvise.com ITA No. 835/Ahd/2025 Hemlata Harakchand Shah vs. ITO Asst. Year –2012-13 - 4– authority to grant relief on a suo moto basis. In view of these facts, CIT(Appeals) held that since compliance with Section 249(4) of the Act is a condition precedent for admission of the appeal, the appeal of the assessee was held to be non-maintainable and was accordingly dismissed for statistical purposes. 6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. Before us, the Counsel for the assessee requested for grant of a fresh opportunity of hearing in the interest of justice, since assessment order was passed an ex-parte basis and also looking into the quantum of additions made in the hands of the assessee. The Counsel for the assessee submitted that if given opportunity of hearing, the assessee would furnish all supporting evidences in support of its case. 7. We have heard the rival contentions and perused the material on record. In the present case, we note that from the case records that it is evident that the assessment was completed ex parte under Section 144 of the Act, as the assessee failed to comply with the various statutory notices issued by the Assessing Officer under Sections 148 and 142(1) of the Act. In appeal before the CIT(Appeals), he dismissed the appeal of the assessee for statistical purposes on account of non-compliance with the mandatory condition under Section 249(4)(b) of the Act, as the assessee neither paid the advance tax due nor filed any application seeking exemption payment of taxes. Considering the substantial addition of ₹13,32,916/- made by the Assessing Officer and in the overall interests of justice, we are of the view Printed from counselvise.com ITA No. 835/Ahd/2025 Hemlata Harakchand Shah vs. ITO Asst. Year –2012-13 - 5– that the assessee deserves an opportunity to present her case on merits. Accordingly, we hereby restore the matter to the file of the Assessing Officer for de-novo consideration after affording a reasonable opportunity of being heard to the assessee. The assessee is directed to cooperate in the proceedings and furnish all necessary documents and explanations in support of her contentions. In case, there is any further non-cooperation on part of the assessee, the Assessing Officer would be at liberty to pass appropriate orders, in the light of material available on records. 8. In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 13/08/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 13/08/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 11.08.2025(Dictated on dragon software/Dictated half part) 2. Date on which the typed draft is placed before the Dictating Member 11.08.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 12.08.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 13.08.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 13.08.2025 7. Date on which the file goes to the Bench Clerk 13.08.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "