HIREN ARUNBHAI VAIDYA,RAJKOT V. ITO, WARD-3(1)(3), RAJKOT, RAJKOT

ITA 238/RJT/2024

AI Insights

The case involves Hiren Arjunbhai Vaidya, who appealed against the order of the Commissioner of Income Tax (Appeals), which had dismissed his appeal ex-parte and rejected his application for condoning the delay in filing the appeal. The original assessment by the Income Tax Officer included a significant addition of Rs. 1,01,97,342 as unexplained money under section 69A read with section 115BBE of the Income Tax Act, 1961, due to unexplained credit entries in his bank account during the demonetization period. The Tribunal found that the assessee was not properly notified of the proceedings due to the negligence of his tax consultant, leading to the decision to allow the appeal and remand the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473090 (ITAT-RAJKOT)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 20-04-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: MEHUL RANPURA
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Principle of natural justice
• Section: 147; 144; 143(2); 69A

Judgement Text

" Page | 1 ITA No.238/RJT/2024 Hiren Arunbhai Vaidya IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.238/RJT/2024 (\u000bनधा\u000fरणवष\u000f / Assessment Year: (2017-18) (Physical Hearing) Shri Hiren Arjunbhai Vaidya Block No.C6, Dwarkesh Park H J Doshi Hospital Road, Rajkot -36006 Vs. ITO Ward -3(1)(3) Rajkot \u0013थायीलेखासं./जीआइआरसं./PAN/GIR No.: ADEPV9112H (Assessee) (Respondent) Assessee by : Shri Mehul Ranpura, AR Respondent by : Shri Abhimanyu Singh Yadav, Sr.-DR Date of Hearing : 11/11/2024 Date of Pronouncement : 25 /11/2024 आदेश / O R D E R PER DINESH MOHAN SINHA, AM: The appeal filed by the assessee, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘NFAC/Ld. CIT(A)’], dated 19.02.2024, u/s 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), dated 16.12.2019 for Assessment Year 2017-18. 2. The assessee has raised following grounds of appeal: “1.The grounds of appeal mentioned hereunder are without prejudice to one another. Page | 2 ITA No.238/RJT/2024 Hiren Arunbhai Vaidya 2.The learned 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 appeal ex-parte. 3.Ld. CIT(A) erred on facts as also in law in rejecting the appellant's application for condoning delay in filing the appeal. The appeal may kindly be directed to be decided on merits. 4.The Ld. CIT(A) erred on facts as also in law in confirming addition ofRs. 1,01,97,342/- made u/s.69A r.w.s. 115BBE of the Act as unexplained money on the alleged ground that the appellant failed to explain source of credit entries in bank account held with different bank alongwith necessary documentary evidence. The addition confirmed is totally unjustified and uncalled for and deserves to be deleted and may kindly be deleted. 5.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. At the outset, the appeal is delayed by 39 days. Ld. AR has filed an application for condonation of delay. The relevant part of the condonation of delay are reproduced as follows: “5. However, the appellant had shifted his business to Goa and relocated with family in Goa. Further, his consultant handling taxation related matters had submitted e-mail address to department in my name and had neither responded to notices received in e-mail nor intimated the appellant about assessment proceedings. Thus, the appellant had no knowledge of issuance of above notices and consequently assessment was finalized ex-parte by the AO. 6.Subsequently, when the appellant was served with the notice for recovery of outstanding demand at his new address of Goa, it came to his knowledge that assessment order in his case was passed making huge additions and it was served upon to him through mail. Therefore, the appeal was not filed before the prescribed time of 30 days from service of assessment order.” 4. Ld. AR submitted that the appellant had shifted to Goa and settled with family in Goa. Hence, the notices were not received. The cause of Page | 3 ITA No.238/RJT/2024 Hiren Arunbhai Vaidya delay the tax consultant who was engaged for pursuing the appeal has not given due attention to the matter and the appeal was disposed of ex-parte by the Ld. CIT(A). 5. On the contrary Ld. DR has submitted that due to such careless and negligence attitude on the part of the consultant nobody attended the appellate proceedings and Ld. ITO also passed ex-parte order u/s 144/ 147 of the Act. 6. We have heard both the parties and we note that it is because of the mistake of the tax consultant the appeal was not pursued before the Ld. CIT(A). The assessee should not be suffer because of mistake committed by the Ld. counsel. We find that there is a sufficient cause to condone the delay, therefore, we condoned the delay and admitted the appeal of the assessee for hearing. 7. Brief facts of the case that the assessee is an individual, and engaged in the business of retail trading of Namkeen items under the name and style “Krishna Foods” and he has also derived income from other sources. For A.Y.2017-18 return was filed on 24.10.2017 declaring net income at Rs.2,90,570/-. During the demonetization period the appellant deposited cash of Rs.26,69,000/- in various accounts maintained with various banks, that the case was selected for limited scrutiny under CASS and issued notice u/s 143(2) of the Act on 21.09.2018 electronically. The Ld. AO passed the ex-parte assessment order on 16.12.2019 and income assessed at Rs.1,01,97,342/- u/s 69A of the Act. The assessee feeling aggrieved by the order of Ld. AO filed an appeal before the Ld. CIT(A) along with application for condonation of delay. The CIT(A) has rejected application Page | 4 ITA No.238/RJT/2024 Hiren Arunbhai Vaidya for condonation of delay and simultaneously appeal of the assessee was also dismissed. 8. The assessee is in appeal before us against the order passed by the Ld. CIT(A) 9. Ld. AR has submitted that the appellant has shifted from Rajkot to Goa. The notice issued by the Ld. CIT(A) was not complied with due to mistake of the tax consultant and prayed for one more opportunity to present the case before the authorities. 10. On the contrary the Ld. DR submitted that since the assessment order as well as appellate order both are ex-parte the assessee is negligent in perusing the case before the Income Tax Authority as he should be penalized for negligence behavior. 11.We have heard both the parties and perused all the material available on record. We note that the ld. CIT(A) has noted that notice issued to the assessee for hearing of the case but the order is silent on the service of notice upon the assessee. We further note that the impugned order of the Ld. CIT(A) is a non-speaking order. We do not wish to make any comment on the merits of the grounds raised by the assessee. We further note that the CIT(A) has not decided the issue in respect of the grounds raised by the assessee in memo of appeal as per the mandate of the provision of section 250(6) of the Act. We are of the view that one opportunity should be given to the assessee to present his case before the Ld.AO. A cost of Rs.5,000/- is imposed on the assessee for non- compliance attitude which is to be deposited with Prime Minister Relief Page | 5 ITA No.238/RJT/2024 Hiren Arunbhai Vaidya Fund. We note that it is settled law that principle of natural justice and fair play required that effected party should be granted sufficient opportunity of being heard to context this case. Therefore, we deem it fit and proper to set aside the order of the CIT(A) and remit the mater back to the file of Ld. AO to adjudicate the issue afresh on merits after giving reasonable opportunity of being heard to the appellant. The assessee is also directed to furnish all the evidence before the AO as when ask for. 12. In the result, the appeal of the assessee is Allowed for statistical purposes. Order is pronounced in the open court on 25/11/2024. Sd/- Sd/- (Dr. A.L. SAINI) (DINESH MOHAN SINHA) ACCOUNTANT MEMBER JUDICIALMEMBER Patel, Sr. PS Rajkot True Copy \u001bदनांक/ Date:25 /11/2024 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 Date Initial 1. Draft dictated on (dictation sheet is enclosed with main file.) 13.11.24 } PS 2. Draft placed before author 13.11.24 PS 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member. 5. Approved Draft comes to the Sr.PS/PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Draft dictation sheets are attached PS "