Ms. Gunjan Agarwal, Barabanki. V. The Income Tax Officer-5(4), Barabanki.

ITA 107/LKW/2023

• Counselvise Citation: [2024] 130 COUNSELVISE.COM (IT) 4954 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-01-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEVE KRISHNA SHARMA
• Assessee Lawyers: SHRISHUBHAMRASTOGI
• Keywords: Set aside; Business income; Unexplained cash credit; Salary income; Bogus
• Section: 148; 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.107/LKW/2023 A.Ys. 2012-13 Income Tax Officer-5(4), Barabanki. Vs. Ms. Gunjan Agarwal, Fatehpur, Barabanki- 225001 (U.P.). PAN AASPA 4237D (Respondent) (Appellant) Shri Shubham Rastogi, CA Appellant by Shri Sanjeev Krishna Sharma, Addl. CIT( DR) Respondent by 11/01/2024 Date of hearing 29/02/2024 Date of pronouncement O R D E R This appeal has been preferred by the assessee against order dated 27.01.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2012-13. 2. The brief facts of the case are that a notice u/s. 148 of the Income Tax Act, 1961 (hereinafter called the ‘Act’) was issued in the case of the assessee and in response thereto the assessee filed her Return of Income showing income from salary at Rs.65,000/-, business income at Rs.5,15,961/- and income from other sources at Rs.68,069/-. The assessee also showed income from Long Term 2 ITA No. 107/Lkw/2023 Capital Gain to the tune of Rs.8,60,714/- from speculative business and claimed it as exempt. The assessee was required by the Assessing Officer to file relevant documents from time to time to which the assessee duly responded. Thereafter, the assessment was completed after making an addition u/s.68 of the Act amounting to Rs.8,60,714/- by holding that the Long Term Capital Gain being claimed as exempt was bogus and that the same was unexplained cash credit in terms of Section 68 of the Act. 3. Aggrieved, the assessee approached the ld. First Appellate Authority challenging the addition. However, the assessee was given as many as eight opportunities but there was no representation or submission made by the assessee before the NFAC and, therefore, the appeal of the assessee was dismissed. 4. Now, the assessee has approached this Tribunal challenging the dismissal of appeal by the NFAC by raising the following grounds of appeal: (1) The Ld. CIT(A), NFAC, Delhi failed to appreciate that the issuance of notice u/s 148 of I.T Act, 1961 solely on the basis of reasons being information from DIT (Investigation), Mumbai, without making independent enquiry and 3 ITA No. 107/Lkw/2023 verification by Ld. A.O. Thus the reasons are only opinion and do not meet the requirement of Sec. 147/148 of the I.T. Act, 1961. (2) That the reasons recorded failed to establish any live link with the information received from DIT (Inv) Mumbai and formation of belief by Ld. A.O. Thus, the reasons and the subsequent assessment proceeding are invalid and liable to be quashed. (3) The assessee has originally filed return u/s 139 of I.T. Act where all the details were shown. Thus, there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, hence the present proceeding u/s 148 of I. T. Act and subsequent assessment are invalid. (4) The Ld. C.I.T. (A) did not appreciate that the assessee is an investor and has invested in number of shares as shown in DMAT Account through Stock Broker and also sold the shares of M / s Marvel Capital and Finance (1) Limited through stock broker in the recognized stock exchange after paying due STT, hence the exemption of LTCG u/s 10(38) of I.T. Act cannot be disallowed. (5) The Ld. C.I.T. (A) did not appreciate that Ld. A. O. had not doubted the purchase of shares through Stock Exchange and sale of shares through DMAT Account through approved share broker hence not allowing exemption u / s 10(38) of I. T. Act on the basis of report of DIT (Investigation), Mumbai is contrary to the provisions of Act. (6) The Ld. C.I.T. (A) upheld the addition u /s 68 of I. T. Act Rs. 8,60,714 /- without appreciating that it is the amount of exemption u/s.10(38) of I.T. Act in respect of total shares without appreciating that the assessee is an investor and invested in shares in DMAT Account through SEBI 4 ITA No. 107/Lkw/2023 Registered Stock Broker and shares were sold in recognized stock exchange after paying STT. (7) The Ld. C.I.T. (A) failed to appreciate that the material relied upon by Ld. A. O. as stated in the Assessment Order has not been confronted to Assessee. Further, Shri Naresh Jain and Shri Shirish Shah on whose statement were stated in the Assessment Order has not been allowed to be cross examine. Thus, there is a violation of Principle of natural justice. (8) The addition upheld is highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon.” 5. The ld. Authorized Representative submitted that the assessee was a lady living in rural area of Barabanki and was not at all conversant and acquainted with the digital environment created for Faceless Appeals and, therefore, she was unable to properly follow up with the income tax notices issued/posted on the portal and also sent on the email-ID. It was further submitted that the assessee did not have any email-ID of her own and when the income tax profile was created, the Advocate entered his email-ID and the notices were being delivered on that email-ID, which never came to the knowledge of the assessee and this led to the non-compliance on her part. It was submitted that there was 5 ITA No. 107/Lkw/2023 no intention on the part of the assessee to deliberately ignore the notices, as it was in her interest only that she responded to the notices. The ld. A.R. prayed that the assessee be afforded one more opportunity to present her case before the NFAC. 6. Per contra, the ld. Senior D.R. opposed the prayer of the assessee and submitted that it was hard to accept that the assessee was unaware of as many as eight opportunities having been granted to her by the NFAC and submitted that the assessee had deliberately ignored the notices, as she could not negate the findings and the observations of the Assessing Officer. 7. I have heard the rival submissions and have also perused the material available on record. It is true that the assessee did not respond to the notices which were issued by the NFAC from time to time. However, the bonafide of the assessee are not in doubt in-as-much as stated by the ld. A.R. at the Bar that the assessee is a lady residing in a rural area and was not aware of the computerized environment in which the present First Appellate setup works. In view of the facts of the case and in the interest of substantial justice, I deem it appropriate to restore the appeal to the NFAC for the purposes of adjudicated afresh after 6 ITA No. 107/Lkw/2023 providing proper opportunity to the assessee. Needless to say, the assessee will duly comply with the notices being issued by the NFAC in the set aside proceedings, failing which, the NFAC shall be at complete liberty to proceed ex-parte qua the assessee and pass a speaking order, in accordance with law. 8. In the final result, the appeal of the assessee stands allowed for statistical purposes. (Order pronounced in the open court on 29/02/2024) Sd/- (SUDHANSHU SRIVASTAVA) JUDICIAL MEMBER Aks – Dtd. 29/02/2024 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) Departmental Representative (5) Guard File Assistant Registrar