HIREN HARAKHCHAND RAMBHIA,MUMBAI V. ACIT RANGE 27(1), MUMBAI

ITA 5530/MUM/2024

AI Insights

The case involves Hiren Harakhchand Rambhia, the assessee, who appealed against the penalty imposed by the Additional Commissioner of Income Tax under section 271D of the Income Tax Act, 1961, for allegedly borrowing a cash loan of Rs. 1,22,00,000 from Mr. Nilesh Bharani. The penalty was initially confirmed by the CIT(A) despite the assessee's non-compliance and failure to substantiate his claims during the proceedings. The Tribunal noted the assessee's request for another opportunity to present his case and decided to remand the case back to the CIT(A) for a thorough examination on merits, instructing the assessee to comply strictly with the procedural requirements.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25613 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: V.D. PARMAR
• Keywords: Document seized; Documents seized; Opportunity of cross examination
• Section: 250; 132; 44AD; 271D

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA No. 5530/Mum/2024 (Assessment Year: 2012-13) Hiren Harakhchand Rambhia 5, Trupti Bungalow, Near Parimal CHS Ltd., R B Mehta Marg, Ghatkopar (E), Mumbai – 400077. Vs. Addl. CIT Range 27(1) Room No. 411, 4th Floor, Tower No. 6, Vashi Rly Complex, Vashi, Navi Mumbai – 400703. PAN/GIR No. AAAPR6855L (Assessee) : (Respondent) Assessee by : Shri. V. D. Parmar, Adv. Respondent by : Shri. Hemanshu Joshi (Sr. DR) Date of Hearing : 30.01.2025 Date of Pronouncement : 30.01.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals), Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2012-13. 2. The assessee has raised the following grounds of appeal: 1. “On facts and circumstances of the case and in law the order passed us 271D is bad in law as there is no proper recording of satisfaction by appropriate authority or initiating penalty proceedings us 271 D and hence the said penalty order needs to be quashed. 2. On facts and circumstances of the case and in law Ld.CIT(A) erred in confirming penalty us 2710 of Rs 1,22,00,000/-. ITA No. 5530/Mum/2024 (A.Y. 2012-13) Hiren Harakhchand Rambhia 2 3. On facts and circumstances of the case and in law Ld. CIT(A) erred in confirming penalty us 271D of Rs 1,22,00,000/- without providing adequate opportunity of being heard. 4. On facts and circumstances of the case and in law Ld. CIT(A) erred in confirming penalty us 271D of Rs 1,22,00,000/- as same is levied on assumption and presumption basis without appreciating the fact that assessee has denied borrowing of any loan from party. 5. On facts and circumstances of the case and in law Ld. CIT(A) erred in confirming penalty us 271D of Rs 1,22,00,000/- as AO himself is not sure whether assessee has taken loan from Mr Nilesh Bharani or from firm M/s Evergreen Enterprises as both are separate entities in eyes of law, so there is no proper application of mind. 6. On facts and circumstances of the case and in law Ld. CIT(A) erred in confirming penalty us 271D of Rs 1,22,00,000/- as same is levied on assumption and presumption basis as per information it is not clear whether assessee has taken or given loan to party. Thus information on basis of which penalty is levied is vague and general in nature. 7. On facts and circumstances of the case and in law Ld.CIT(A) erred in confirming penalty us 271D of Rs 1,22,00,000/- as AO has not provided copies of seized documents and statements of parties who alleges that such cash loan is given to assessee and also opportunity of cross examination not provided to assessee.” 3. Brief facts of the case are that the assessee is an individual and pursuant to search and survey action u/s. 132 of the Act carried out in the case of M/s. Evergreen Enterprises, where statement of Mr. Nilesh Bharani, one of the partners of M/s. Evergreen Enterprises and Jagdish T. Ramani and Ors. stated that several individual and business concern has borrowed cash loan through M/s. Evergreen Enterprises, in which the assessee was one of the parties who had borrowed cash loan of Rs. 1,22,00,000/- from Mr. Nilesh Bharani. The learned Assessing Officer ('ld. A.O.' for short) reopened the assessee’s case vide notice u/s. 148, where the assessee had filed his return of income dated 17.09.2019, in response to the said notice declaring an income of Rs. 6,62,472/- on presumptive basis, declaring turnover of Rs. 40,54,595/- and declared gross profit u/s. 44AD amounting to Rs. 9,43,672/-. The ld. AO had passed the assessment order ITA No. 5530/Mum/2024 (A.Y. 2012-13) Hiren Harakhchand Rambhia 3 u/s. 147 r.w. 144B of the Act dated 10.01.2022, determining total income at Rs. 6,62,472/- and initiated penalty proceeding u/s. 271D of the Act. The ld. AO then passed the penalty order u/s. 271D of the Act, dated 29.07.2022, levying a penalty amounting to Rs. 1,22,00,000/- towards the cash loan borrowed from Mr. Nilesh Bharani, vide an ex parte order on the ground that the assessee has failed to substantiate the said transaction. 4. Aggrieved the assessee was in appeal before the first appellate authority, challenging the impugned penalty order and the ld. CIT(A) vide an ex parte order dated 02.09.2024, upheld the penalty levied by the ld. AO on the ground that the assessee has failed to comply with the notices issued by the first appellate authority. 5. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 6. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the penalty levied by the ld. A.O. before the first appellate authority but has been non-compliant throughout the appellate proceeding. Even before the ld. AO, the assessee has been constantly been non- compliant and has failed to cooperate with the proceedings. 7. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee may be given one more opportunity to present his case before the first appellate authority and that the assessee has got a good case on the merits. 8. The learned Departmental Representative (‘ld. DR’ for short) vehemently objected to remanding the issue back to the ld. CIT(A) for the reason that the assessee has ITA No. 5530/Mum/2024 (A.Y. 2012-13) Hiren Harakhchand Rambhia 4 deliberately been non-compliant and has not availed several opportunities given by the lower authorities. 9. In the above facts of the case, we deem it fit to extend one more opportunity to the assessee to appear before the first appellate authority along with his submissions with documentary evidences in support of his contentions, by adhering to the principles of natural justice and interest of justice dispensation. The ld. CIT(A) is directed to decide the issue based on the submission of the assessee and on the merits of the case and in accordance with law. The assessee is directed to strictly comply with the proceedings without any undue delay from his side. 10. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 30.01.2025 Sd/- Sd/- (RENU JAUHRI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 30.01.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "