Sonia Chowdhry, New Delhi V. DCIT, Central Circle- 31, New Delhi

ITA 1034/DEL/2022

AI Insights

The case involves an appeal by Sonia Chowdhry, the Managing Director of M/s. Franchise India Brand Ltd., against the order of the CIT(A) which pertained to the assessment year 2018-19. The primary contention arose from discrepancies in reported salary income and unexplained assets discovered during a search operation under section 132 of the Income Tax Act, 1961. The Assessing Officer added significant amounts to the assessee's income as unexplained salary, jewellery, and cash. The CIT(A) dismissed the appeal ex parte due to non-compliance with hearing notices, which was attributed to the COVID-19 pandemic and personal health issues of the assessee's representative. The Tribunal found it just and fair to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 302783 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 28-11-2022
• Assessment Year: misc
• Appeal Filed On: 12-01-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; FORM 26AS
• Section: 132; 143(3)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.1034/Del/2022 Asstt. Year: 2018-19 O R D E R PER ASTHA CHANDRA, JM The appeal by the assessee is directed against the order dated 28.04.2022 of the Ld. Commissioner of Income Tax (Appeals) - 30, New Delhi (“CIT(A)”) pertaining to assessment year (“AY”) 2018-19. 2. The assessee is an individual and is stated to be Managing Director of M/s. Franchise India Brand Ltd.. She is having income primarily from salary. A search under section 132 of the Income Tax Act, 1961 (the “Act”) was conducted on 14.09.2017 at the residential premises of the assessee. She filed her return for AY 2018-19 on 31.08.2018 declaring income of Rs. 11,87,560/-. The Assessing Officer (“AO”) found that as per Form 26AS the Sonia Chowdhry, 8716, Sector-C, Pocket 8, Vasant Kunj, New Delhi – 110 070 PAN ACYPC8466A Vs. DCIT, Central Circle-31 New Delhi (Appellant) (Respondent) Assessee by: Shri Akash Garg, Advocate Shri Parth Davar, Advocate Department by : Shri H.K. Choudhary, CIT-DR Date of Hearing 29.11.2022 Date of pronouncement 02.12.2022 ITA No. 1034/Del/2022 2 assessee had received salary of Rs. 24,65,000/- from M/s. Frnachise India Brand Ltd. whereas in the return the assessee offered salary of Rs. 13,71,000/- only for tax. The assessee furnished explanation which was not acceptable to the Ld. AO who added the difference of Rs. 10,94,000/- (Rs. 24,65,000 – Rs. 13,71,000) to the income of the assessee. During search, jewellery of Rs. 9,95,345/- was found at the residence and jewellery worth Rs. 46,92,380/- was found from her bank locker. According to the Ld. AO the assessee could not explain the source of acquisition of the said jewellery. He, therefore, added Rs. 56,87,725/- ( Rs. 9,95,345 + Rs. 46,92,380) to the income of the assessee as unexplained jewellery. In addition, cash of Rs. 6,00,000/- was also found from the same bank locker for which the assessee, according to the Ld. AO could not explain source of acquisition. He, therefore, added the same to the income of the assessee as unexplained cash. Accordingly, the assessment was completed on total income of Rs. 85,69,285/- as against the income declared in the IT return at Rs. 11,87,560/- on 25.12.2019 under section 143(3) of the Act. 3. Aggrieved, the assessee filed appeal before the Ld. CIT(A). During appellate proceedings, several notices of hearing issued by the Ld. CIT(A) remained uncomplied with. None appeared for or on behalf of the assessee. Department also was not represented before the Ld. CIT(A) who decided the assessee’s appeal ex parte and dismissed the same. This has brought the assessee before the Tribunal challenging the impugned additions. 4. It is observed from the appellate order that the Ld. CIT(A) has himself observed that the proceedings are taking place in times of Covid-19 and written submission and documents could be furnished electronically as well. However, it could not be done which resulted in ex parte order passed by him. 5. The Ld. AR submitted that during Covid-19 period there was panic all around and the Ld. AR of the assessee also suffered from fracture and septic preventing him to attend the proceedings. It was therefore urged that the ITA No. 1034/Del/2022 3 order of the Ld. CIT(A) be set aside and restored back to the file of the Ld. CIT(A) for decision afresh after hearing both the parties. The Ld. AR undertakes to cooperate fully in the proceedings. The Ld. CIT(DR) had no objection. 6. Having regard to the facts and circumstances of the case as set out above, we are of the view that it would be just and fair as also in the interest of justice that the order of the Ld. CIT(A) is set aside and restored back to his file for decision afresh after allowing reasonable opportunity of being heard to the assessee as also the Revenue. We, order accordingly, 7. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 2 nd December, 2022. sd/- sd/- (ANIL CHATURVEDI) (ASTHA CHANDRA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:02/12/2022 Veena Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the ITA No. 1034/Del/2022 4 Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order