HUSENI STATIONERY & PAPER MART,GODHRA V. THE INCOME TAX OFFICER WARD 1, GODHRA, GODHRA

ITA 1972/AHD/2024

AI Insights

The case involves Huseni Stationery & Paper Mart appealing against the orders of the Commissioner of Income Tax (Appeals), which were passed by the National Faceless Appeal Centre, Delhi. The appeals were initially dismissed by the CIT(Appeals) due to delays in filing, which the assessee attributed to non-communication by their chartered accountant and limited access to the Income Tax Portal. The Tribunal found that the CIT(Appeals) had not considered the merits of the case while dismissing the appeal on technical grounds of delay. Consequently, the Tribunal decided to restore the matter to the Assessing Officer for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712711 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.P. MAKWANA
• Assessee Lawyers: CHETAN AGARWAL
• Keywords: Condonation of delay; Invalid notice; Reassessment proceedings; Reopening of assessment
• Section: 148; 144; 139

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. Nos.1971&1972/Ahd/2024 (Assessment Year: 2017-18) Huseni Stationery & Paper Mart, Nr. Hasnan Masjid, Old Post Officer Road, Savliwada, Godhra-389001 Vs. Income Tax Officer, Ward-1, Godhra [PAN No.AAHFH8907Q] (Appellant) .. (Respondent) Appellant by : Shri Chetan Agarwal, AR Respondent by: Shri B. P. Makwana, Sr. DR Date of Hearing 15.07.2025 Date of Pronouncement 28.07.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: These appeals have 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 orders dated 08.08.2024 & 05.12.2023 passed for A.Y. 2017-18. 2. At the outset, we observe that both appeals are time barred by 20 days. The delay of 20 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: ITA No. 1971/Ahd/2024 (A.Y. 2017-18) “1. Learned CIT(A) erred in law as well as on fact in dismissing appeal on the ground of limitation and not condoning delay of 367 days, without giving any notice of hearing. Printed from counselvise.com ITA Nos. 1971&1972/Ahd/2024 Huseni Stationery & Paper Mart vs. ITO Asst.Year –2017-18 - 2– 2. Learned CIT(A) erred in law as well as on fact in upholding reopening of assessment beyond three years for alleged escapement of income below Rs.50lakhs. 3. Learned CIT(A) erred in law as well as on fact in upholding invalid notice u/s. 148 dated 28.07.2022, which was issued manually and without DIN, hence invalid and void-ab-initio. 4. Learned CIT(A) erred in law as well as on fact in upholding notice u/s. 148 dated 28.07.2022 issued manually by jurisdictional assessing officer instead of faceless manner. 5. Learned CIT(A) erred in law as well as on fact in upholding notice u/s. 148 dated 28.07.2022, which was issued by taking approval from PCIT whereas as per provisions of the Act approval of PCCIT is require.” 4. The brief facts of the case are that the assessment was completed on ex-parte basis under section 144 of the Income Tax Act, 1961 (Act), on account of non-compliance by the assessee during the reassessment proceedings initiated under section u/s 148 of the Act by the Assessing Officer. The Assessing Officer noted that assessee failed to file the Income Tax Return (ITR) in response to the notice issued under section 148 of the Act and did not submit any reply to the various statutory notices, including the Show Cause Notices and letters issued during the course of reassessment proceedings. During the course of reassessment, the Assessing Officer observed that the assessee had deposited cash amounting to Rs. 41,77,000/- in its bank account during the demonetization period in Financial Year 2016- 17. The Assessing Officer observed that although the assessee had originally filed a return under section 139 of the Act for Assessment Year 2017-18, no response and nor any explanation was provided in response to the subsequent notice issued u/s 148 of the Act. of the Act. Despite being granted multiple opportunities, the assessee failed to submit any supporting documents or evidence to explain the nature and source of these substantial cash deposits made by the assessee in his bank account. As a result, in the absence of any Printed from counselvise.com ITA Nos. 1971&1972/Ahd/2024 Huseni Stationery & Paper Mart vs. ITO Asst.Year –2017-18 - 3– reply or supporting documentation, the Department was unable to verify the genuineness of the deposits. The Assessing Officer treated the cash deposits of Rs. 41,77,000/- as unexplained money under section 69A read with section 115BBE of the Act, and this amount was added to the total income of the assessee. The Assessing Officer observed that since there was no cooperation from the assessee, he had no option but finalize the reassessment proceedings on ex-parte basis, based on available material. Accordingly, the Assessing Officer finalized the assessment at a total income of Rs. 42,07,810/- (which comprised of income declared by the assessee of Rs. 30,810/- and the addition of Rs. 41,77,000/- on account of unexplained money made by the Assessing Officer). Further, penalty proceedings under section 271AAC(1) were also initiated separately for the unexplained money added under section 69A read with section 115BBE of the Act. 5. In appeal, the Commissioner (Appeals) dismissed the appeal filed by the assessee on the grounds of delay in filing of appeal. The CIT(Appeals) noted that in Form 35, the assessee admitted that there was a delay of 367 days in filing the appeal and also filed a petition seeking condonation of delay in filing appeal. The assessee in his condonation application submitted that the ex-parte assessment order was served on the income tax portal, but was not communicated by the chartered accountant to the assessee. The assessee only became aware of the order when their bank accounts were seized by the Department, after which the assessee obtained a copy of the order and filed appeal before CIT(Appeals). The assessee further submitted that the delay was unintentional and due to change in the authorized representative, which was a genuine cause. However, the Commissioner (Appeals) refused to Printed from counselvise.com ITA Nos. 1971&1972/Ahd/2024 Huseni Stationery & Paper Mart vs. ITO Asst.Year –2017-18 - 4– condone the delay and held that the appeal was required to be filed within 30 days from the date of receipt of the order, as per section 249(2) of the Act, and the explanation provided by the assessee did not constitute sufficient cause for the delay. The reliance on the chartered accountant's failure was not accepted as a valid reason by CIT(Appeals), and the application for condonation of delay was rejected under section 249(3) of the Act. Accordingly, since the appeal was not filed within the prescribed time, CIT(Appeals) refused to admit the same. 6. Before us, the Counsel for the assessee submitted that the assessee had given complete responsibility of compliances to his tax consultant, who failed to respond to notices issued by the Department, leading to an ex-parte assessment and penalty order. The assessee firm was unaware of these orders until the bank accounts were attached by the Department, due to lack of communication from the consultant and limited access to the Income Tax Portal. Therefore, appeals were filed by the assessee before the CIT(A) with some delay, which was due to non-awareness about passing of assessment order. The appeal was dismissed by CIT(Appeals) solely on the grounds of limitation without considering the merits of the assessee’s case. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee without discussing the merits of the case. On hearing both the parties before us, we note that the CIT(Appeals) dismissed the appeal filed by the assessee solely on the ground of delay in filing of appeal without discussing the merits of the assessee’s case. The Commissioner (Appeals) noted that the assessee had filed the appeal with a delay of 367 days and had also submitted a petition seeking condonation of Printed from counselvise.com ITA Nos. 1971&1972/Ahd/2024 Huseni Stationery & Paper Mart vs. ITO Asst.Year –2017-18 - 5– the said delay. In the condonation petition, the assessee submitted that although the ex-parte assessment order was served on the income tax portal, it was not brought to the assessee’s attention by his chartered accountant, who had been entrusted with the responsibility of handling all tax-related matters, including compliance with notices issued by the Income Tax Department. The assessee further submitted that he became aware of the assessment order only after the Department took coercive action, such as the seizure of bank accounts, and immediately thereafter obtained a copy of the order and filed an appeal before the Commissioner (Appeals). Before us, the assessee’s counsel reiterated the submissions made before CIT(Appeals) and further contended that the delay in filing the appeal was neither intentional nor motivated by any malafide intention, but was purely on account of circumstances beyond the control of the assessee, particularly the non- communication by the consultant and the assessee’s limited access to the e- portal of the Income Tax Department. It was also submitted that the assessment order was passed ex-parte and the assessee was denied a reasonable opportunity to present the facts and substantiate the nature and source of cash deposits, which were duly recorded in the books of accounts as arising from genuine business transactions. Accordingly, looking into the assessee’s facts, the matter is hereby restored to file of the Assessing Officer for de novo consideration, after giving due opportunity of hearing to the assessee. 8. In the result, appeal filed by the assessee in ITA 1971/Ahd/2024 is allowed for statistical purposes. Printed from counselvise.com ITA Nos. 1971&1972/Ahd/2024 Huseni Stationery & Paper Mart vs. ITO Asst.Year –2017-18 - 6– ITA No. 1972/Ahd/2024 (A.Y. 2017-18) 9. The assessee has raised the following grounds of appeal in ITA No. 1972/Ahd/2024: “1. Learned CIT(A) erred in law as well as on fact in dismissing appeal on the ground of limitation and not condoning delay of 123 days, without giving any notice of hearing. 2. The Ld. CIT(A) erred in law as well as on facts in confirming penalty of Rs. 3,22,673 imposed by the Ld. AO u/s. 271AAC(1) of the Act.” 10. The appeal filed by the assessee in ITA 1972/Ahd/2024 relates to levy of penalty in relation to quantum additions. Since the assessee’s appeal in relation to quantum additions has been restored to file of the Assessing Officer for de novo consideration, accordingly, the assessee’s appeal against levy of penalty is also restored to the file of the Assessing Officer. 11. In the result, both appeals filed by the assessee are allowed for statistical purposes. 12. In the combined result, both appeals filed by the assessee are allowed for statistical purposes. This Order pronounced in Open Court on 28/07/2025 Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 28/07/2025 TANMAY, Sr. PS TRUE COPY Printed from counselvise.com ITA Nos. 1971&1972/Ahd/2024 Huseni Stationery & Paper Mart vs. ITO Asst.Year –2017-18 - 7– 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 23.07.2025 (Dictated by dragon software) 2. Date on which the typed draft is placed before the Dictating Member 23.07.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 28.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 28.07.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 28.07.2025 7. Date on which the file goes to the Bench Clerk 28.07.2025 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 "