I. G. AMODWALA INTERNATIONAL PVT. LTD.,BHARUCH V. INCOME TAX OFFICER, WARD 1(2), BHRUCH

ITA 275/SRT/2024

AI Insights

The case involves I.G. Amodwala International Pvt. Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals) that confirmed an addition of Rs.9 lakh to the assessee's income under section 68 of the Income-tax Act, 1961. The addition was initially made by the Assessing Officer based on cash deposits during demonetization, which were deemed unexplained. The CIT(A) dismissed the appeal due to non-compliance by the assessee in providing necessary submissions and evidence. The Tribunal found that the CIT(A) had not adequately considered the assessee's submissions and had not provided a reasonable opportunity of hearing, leading to the decision to remit the case back to the CIT(A) for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472217 (ITAT-SURAT)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Next Hearing Date: 08-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 12-03-2024
• Other Referred Cases: Glassline Equipment Pvt. Ltd. vs. CIT 253 ITR page 454, Collector, Land Acquisition vs. Mst. Katiji and Otrs. (1987) 167 page 471 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: KINJAL SHAH
• Keywords: Set aside; Principle of natural justice; Deemed to accrue or arise in india
• Section: 143(3); 142(1); 250; 68; 133(6)

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Æयायपीठ, सूरत IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.275/SRT/2024 Assessment Year: (2017-18) (Hybrid processing) I.G. Amodwala International Pvt. Ltd. Shop No.16-17, Navdeep Shopping Centre, Opp. G.P.Mills Panchbatti, Bharuch-392 001 Vs. Income Tax Officer, Ward-1(2), Bharuch, Income-tax Office, Hari Kunj, Station Road, Bharuch-396 069 èथायीलेखासं./जीआइआरसं./PAN/GIR No: AADCI 4534 K (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Appellant by Ms. Kinjal Shah, CA राजˢ की ओर से /Respondent by Shri Mukesh Jain, Sr-DR अपील पंजीकरण/Appeal instituted on 12/03/2024 सुनवाई की तारीख/Date of Hearing 08/10/2024 उद ्घोषणा की तारीख/Date of Pronouncement 29/10/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the appellant emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 10.11.2023 by the Commissioner of Income-tax (Appeals)/ Commissioner of Income-tax (Appeals) Addl/JCIT(A)-1, Pune [in short ‘Ld. CIT(A)’] for the Assessment Year (AY) 2017-18, which in turn arises out of assessment order passed by Assessing Officer (in short, “AO”) u/s 143(3) of the Act. Grounds of appeal raised by the assessee are as under: 2 ITA No.275/SRT/2024/AY.2017-18 I.G. Amodwala International Pvt. Ltd. “1. The order of the CIT(A) dated 10.11.2023 in response to appeal filed on 20.1.2020 against the order of AO dated 28.12.2019 computing total income at Rs.9 lakh added u/s 68 is bad in law and void. During course of hearing various notice were issued but they were either not served on the assessee or served after the date of hearing and not at address mention in the documents while filing appeal as well as filed before the AO. 2. It is submitted that your appellant was not given full chance and time for hearing the appeal and the order is passed in haste and hurry against principles of natural justice and therefore it is void ab-initio. 3. (a) Your appellant submits that the CIT(A) has passed appellate order wholly and fully relying on observation of the AO and he has not applied his mind and not looked into the matter available on file and other relevant documents. (b) The addition were made by the AO as mentioned by him in para 6 of his order is on presumption and guesswork which has been blindly followed by the CIT and confirming addition of Rs.9 lakh with regarding the facts of the case as well as the affidavit filed before the AO disregarding the principles laid down by Hon. Gujarat High Court in the case of Glassline Equipment Pvt. Ltd. vs. CIT 253 ITR page 454. 4. (a) Your appellant submits that Rs.9 lakhs credited in the books of the account is out of sales and arises during course of business of the appellant to which Sec. 68/69 does not apply and the said amount is not includable as income. (b) Without prejudice and in the alternative if any income is included then it is only the net profit thereof i.e. 2% of Rs.9 lakh be added as held by several judicial authorities. It is therefore submitted that reliefs claimed above be allowed and the order of the Assessing Officer be modified accordingly. Your appellant reserves right to add, alter, amend to withdraw any or all ground of appeal.” 2. The appeal was filed late by 63 days. The CIT(A) passed order u/s 250 of the Act on 10.11.2023 and the appeal should have been filed by 09.01.2024. However, it has been filed on 12.03.2024. The appellant has filed an affidavit of its Senior Officer of the Account Department. It is stated in the affidavit that the order u/s 250 of the Act was passed on 10.11.2023, but since the computer of the assessee-company was not functioning, the order could not be down 3 ITA No.275/SRT/2024/AY.2017-18 I.G. Amodwala International Pvt. Ltd. loaded by said Senior Accountant. His assistant took a print out and placed in the pending paper of the said Senior Accountant, who noticed that the CIT(A) dismissed the appeal. Thereafter, he went to his native place towards the end of November, 2023 to attend some social function and marriage ceremony. He returned in first week of December, 2024 from his native place but the pending papers including the order of CIT(A) was lost sight of. Thereafter, he visited the CA of the assessee-company and enquired regarding pending litigation and income-tax appeal. This reminded him of the impugned order and he took steps to file the appeal which resulted into delay of 63 days. It is submitted that he was not negligent or careless and slip up which took place was inadvertent. The appellant has requested to condone the delay and relied on the decisions in the case of Collector, Land Acquisition vs. Mst. Katiji and Otrs. (1987) 167 page 471 (SC). He further stated that the mistake was its first mistake and there was no mala fide or bad intention on his part. He, therefore, requested to condone the delay of 63 days. 3. On the other hand, Learned Senior Departmental-Representative (Ld.Sr- DR) for the Revenue has stated that the appellant has not properly explained the delay in filing appeal before the Tribunal. 4. We have considered the reasons given by the Ld. AR and perused the accompanied affidavit. We find that the delay of 63 days in filing appeal was not deliberate and intentional on the part of assessee. Reasons given in the affidavit is that the order of CIT(A) dated 10.11.2023 was noticed by the Senior 4 ITA No.275/SRT/2024/AY.2017-18 I.G. Amodwala International Pvt. Ltd. Account of the appellant-company on 20.11.2023 after which he went his native place to attend social function and marriage ceremony. He returned in first week of December, 2023 but forgot to take action in filing appeal before Tribunal. Only in January 1st week, 2024, he recollected about dismissal of appeal and he filed the appeal, which has been delayed by a short period of 63 days. Hence, there was sufficient cause for not filing the appeal on time. After considering the fact that assessee is not going to benefitted by filing appeal belatedly and further considering the fact that when technical consideration and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred, the short delay in filing the appeal is condoned. Let us now discuss the merit of the case. 5. Facts of the case in brief are that assessee filed its return of income (in short, ‘ROI’) on 30.10.2017 declaring total income at Rs.6,12,620/-. Subsequently, case was selected for scrutiny. The AO issued show cause notices u/s 142(1) on 05.10.2019 and 09.11.2019. Thereafter, assessee requested for time to file submission regarding show-cause notice issued. The AO issued notice u/s 133(6) of the Act to Bank Authorities and on perusal of bank statement and other details, it was found that assessee deposited cash in its bank account during demonetization to the tune of Rs.3,11,82,320/-. Out of total cash deposit, Rs.36,00,000/- has been deposited in Specified Banking Notes (‘SBN’). According to AO, assessee has deposited Rs.27,00,000/- in SBN out of closing cash balance on 08.11.2016. For balance amount of 5 ITA No.275/SRT/2024/AY.2017-18 I.G. Amodwala International Pvt. Ltd. Rs.9,00,000/- on 10.11.2016 assessee furnished affidavits from sales men. AO has not accepted reply of the assessee. The difference amount of Rs.9,00,000/- was treated by him as deemed income and added to total income of assessee u/s 68 of the Act. for the reasons discussed in para 5 and 6 of the assessment order. Aggrieved by the addition made by AO, assessee preferred appeal before CIT(A). 6. The CIT(A) issued six notices fixing the hearings on 11.01.2021, 01.1.2021, 23.02.2022, 07.12.2022, 24.05.2023 and 16.10.2023. The assessee did not file any written submission nor evidence nor sought any adjournment in response to the above notices. He, therefore, dismissed the appeal of assessee by observing that assessee failed to avail the opportunities to file evidence or counter arguments to support its claim. Further aggrieved by the order of CIT(A), the assessee has filed present appeal before the Tribunal. 7. Before us, Ld.AR of the assessee filed paper book containing pages 1 to 66. It was submitted that the notices were sent by the CIT(A) in the e-mail address of the previous consultant of the assessee. As a result, the assessee or its representative did not receive the notices and hence it could not comply with the details called for by the CIT(A). In absence of reply from assessee, CIT(A) passed the impugned ex parte order on 30.05.2023. He requested that one more opportunity may be given so that appellant would plead his case on merit. 6 ITA No.275/SRT/2024/AY.2017-18 I.G. Amodwala International Pvt. Ltd. 8. On the other hand, Ld.Sr-DR for the Revenue supported the order of lower authorities. He stated that assessee has been negligent in pursuing the appeal before CIT(A). 9. We have heard both the parties and perused the materials on record. The Ld. AR has argued that CIT(A) has passed order without giving reasonable and sufficient opportunities of being heard to assessee. The notices were sent in the e-mail address of the previous consultant. The CIT(A) dismissed appeal without discussing merits of the case. The impugned order passed by the CIT(A) is clearly violative of the express provisions of Section 250(6) of the Act, which provides that the appellate orders of the CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the submission of Ld.AR for the assessee that the assessment order was confirmed by CIT(A) in an ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. Considering all the facts and in the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file CIT(A) with a direction to pass a speaking order in accordance with law after granting adequate opportunity of hearing to assessee. However, considering the conduct of assessee is not complying to 7 ITA No.275/SRT/2024/AY.2017-18 I.G. Amodwala International Pvt. Ltd. various notices and opportunities granted by CIT(A) as well as delay in filing the appeal within the specified time, we deem it proper to impose cost of Rs.10,000/- (Rupees ten thousand) on the assessee, which shall be paid by assessee to the credit of the Gujarat High Court Legal Aid Authority within two weeks from receipt of this order. The assessee is also directed to be vigilant and to furnish all details and explanation as needed by CIT(A) by not seeking adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee is treated as allowed for statistical purposes. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced on 29/10/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) Æयाियक सदÖय/ Judicial Member लेखा सदÖय/ Accountant Member सूरत /Surat Ǒदनांक/ Date: 29/10/2024 Dkp Out Sourcing 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 // True Copy // By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, सूरत "