KALABEN PRAMOD SHAH, MUMBAI V. ITO-27(2)(1), VASHI

ITA 1104/MUM/2023

AI Insights

This case involves an appeal by Kalaben Pramod Shah against the order of the CIT(A)/NFAC, Delhi, which confirmed the AO's action under sections 144 and 147 of the Income Tax Act, 1961. The AO had added the entire purchase and sale consideration of Rs.26,52,250 as income, disregarding the assessee's contention that only the profit from the transaction should be taxed. The appeal was complicated by the assessee's advanced age and her husband's serious health issues, which affected their ability to participate in the reassessment proceedings and subsequent appeals. The Tribunal considered these circumstances, along with a precedent from the Supreme Court, and decided to remand the case for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300076 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-06-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2023
• Other Referred Cases: Tin Box Company Vs. CIT (249 ITR 216) (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Onus to prove
• Section: 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM आयकर अपील सं/ I.T.A. No.1104/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2011-12) Kalaben Pramod Shah G-6, Lal Ashish Bldg, Garodia Nagar, Ghatkopar East, Mumbai-400077. बिधम/ Vs. ITO-27(2)(1) 3 rd & 4 th Floor, Vashi Railway Station, Vashi- 400703. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AAMPS4027P (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 27/06/2023 घोषणा की तारीख /Date of Pronouncement: 30/06/2023 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Ld. CIT(A)/NFAC, Delhi dated 19.12.2022 for AY. 2011-12. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) confirming the action of the AO passed u/s 144 r.w.s 147 of the Income Tax Act, 1961 (hereinafter “the Act’) wherein the AO has added the entire purchase and sale consideration on of Rs.26,52,250/- as income and ignored the contention the profit from the transaction should be taxed. 3. Regarding the cause of delay in filing of appeal, the Ld. AR for assessee, brought to my notice that assessee is an individual who is more than 75 years old lady and her husband was looking after the commodity business and filing of return of income etc. However, during the re-assessment proceedings, her husband had by-pass Assessee by: Shri Pankaj Mall Revenue by: Shri Dharmvir D Yadav (Sr. DR) ITA No.1104/Mum/2023 A.Y. 2011-12 Kalaben Pramod Shah 2 surgery in 2015 and because of medical complexities he was bedridden and thereafter he ultimately passed away in July, 2020. And it was brought to my notice that re-assessment order was framed by AO after reopening the assessment on 20.03.2015 while assessee’s husband was undergoing treatment in hospital and was discharged only 1 ½ months i.e. 30.01.2015 before the date of re-assessment order, which fact is evident from the copy of discharge summary issued by Fortis Hospital placed before this Tribunal. It is noted that assessee is an old lady and the commodity business as well as return of income of assessee was taken care by her husband who had Cardiac problems, which led to by- pass surgery and hospitalisation and discharge only fifty (50) days before the re-assessment was framed u/s 144 of the Act [i.e. best judgment assessment for non-participation of assessee during re- assessment proceedings]. And further it has been brought to my notice that due to medical/cardiac problems, the assessee’s husband health deteriorated and needed constant medical attention which prevented him from pursuing the appeal filed by the assessee before the Ld. CIT(A), which prompted the Ld. CIT(A) to dismiss the appeal of the assessee on 19.12.2022 since the assessee failed to produce any evidences before him. Taking into consideration the aforesaid facts and circumstances of the case, and that the assessee is an old lady and her husband had passed away during the midst of Covid-19 (July, 2020) due to the lock-down etc, the assessee could not approach the Ld. AR, which led to the dismissal of the appeal. Taking into consideration, aforesaid facts, we find that there was reasonable cause ITA No.1104/Mum/2023 A.Y. 2011-12 Kalaben Pramod Shah 3 for not appearing before the AO as well as Ld. CIT(A). Therefore, by relying on the decision of the Hon’ble Supreme Court in Tin Box Company Vs. CIT (249 ITR 216) (SC) wherein it was held that if an assessee did not get proper opportunity before the AO, then the assessment should be restored back to the file of AO for assessing the income of assessee. The order of Hon’ble Supreme Court reads as under: - “ It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus : "We will straightway agree with the assessee's submission that the ITO had not given to the assessee proper opportunity of being heard." That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. 2. Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding ITA No.1104/Mum/2023 A.Y. 2011-12 Kalaben Pramod Shah 4 arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee ?" In our opinion, there can only be one answer to this question which is inherent in the question itself: in the negative and in favour of the assessee. 3. The appeals are allowed. The order under challenge is set aside. The assessment orders, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated. No order as to costs.” 4. Since from the facts and circumstances discussed (supra), it has been found that assessee had reasonable cause for not appearing before the AO which led to the passing of the best-judgment assessment u/s 144 of the Act, accordingly, I am inclined to set aside the impugned order of the Ld. CIT(A) and restore the issues back to the file of the AO with a direction to denovo assess the income of the assessee. Needless to say that the assessee be given proper opportunity of hearing. And the assessee to file relevant documents to substantiate the return of income she has filed along with computation of income, the bills, ledger, bank-statement etc to substantiate the primary facts necessary for supporting the return of income. The assessee is given liberty to file the relevant documents (Primary documents) to substantiate return of income and should discharge the burden of proof as per settled position of law. And the AO to assess the income denovo as per law after giving opportunity to assessee. ITA No.1104/Mum/2023 A.Y. 2011-12 Kalaben Pramod Shah 5 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 30/06/2023. Sd/- (ABY T. VARKEY) JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 30/06/2023. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai