Smt. Heenaben Maheshbhai Gadhethariya, Rajkot V. The ITO Ward-3 (1) (1), Rajkot, Rajkot

ITA 117/RJT/2023

AI Insights

The case involves Smt. Heenaben Maheshbhai Gadhethariya, the appellant, contesting an order from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, pertaining to the assessment year 2017-18. The primary issues revolved around the alleged failure of the CIT(A) to provide adequate opportunity of being heard and the unjustified addition of Rs. 40,58,800 as unexplained credit in bank accounts under sections 69A and 115BBE of the Income Tax Act, 1961. The appellant argued that the delay in filing the appeal was due to the inaction of her previous consultant, which was deemed justifiable by the ITAT, leading to the condonation of the delay and the remand of the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 133711 (ITAT-RAJKOT)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 27-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH KUMAR PANDEY
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Set aside; Audi alteram partem
• Section: 144; 250; 69A; 139(4)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND MISS SUCHITRA RAGHUNATH KAMBLE, JUDICIAL MEMBER ITA No.117/RJT/2023 Assessment Year :2017-18 Smt. Heenaben Maheshbhai Gadhethariya Flat B/21, Copper Elegance Nr.Ambika Township, Mavdi Police Ground Rajkot, Gujarat PAN : AHWPG 7174 J Vs. The ITO, Ward-3(1) Rajkot. अपीलाथ / (Appellant) यथ /(Respondent) Assessee by : Shri R.B. Shah, Ld.AR Revenue by : Shri Ashish Kumar Pandey, Sr.DR स ु नवाई क तार ख/Date of Hearing : 28/08/2023 घोषणा क तार ख /Date of Pronouncement: 06/09/2023 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the Assessee against order passed by the ld.Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, (NFAC), Delhi [hereinafter referred to as “Ld.CIT(A)”] under section 250(6) of the Income Tax Act, 1961 ("the Act" for short) dated 30.12.2022 pertaining to the Asst.Year2017-18. 2. At the beginning of hearing, it is noted that the Registry has noted that the appeal filed by the assessee is time barred by 59 days. To explain the delay, the assessee has filed an affidavit stating among other that, the delay was caused mainly because of omission ITA No.117/RJT/2023 2 on the part of her consultant in not attending the proceedings before the ld.CIT(A) and not complying with various notices issued by the Department from time to time. The assessee was not aware of the appellate proceedings and the outcome thereof, and because registered email id was of her consultant, the fate of the appellate proceedings was not in the knowledge of the assessee. The ld.counsel for the assessee therefore submitted that the assessee on getting the appellate order, immediately approached another consultant, and filed the present appeal, and in the meanwhile, the delay of 59 days was occurred, which is genuine and justifiable to condone, and to take up appeal of the assessee for adjudication on merits. On the other hand, the ld.DR objected to condone the delay in filing the present appeal, as the assessee had remained absence continuously both before the AO and the ld.CIT(A), despite repeated opportunities having been given, and such non-serious and dormant litigant deserve no leniency in law, and therefore, condonation of the impugned delay is to be rejected. 3. After hearing both the sides, we find from the affidavit of the assessee that the impugned delay of 59 days caused mainly due to inaction on the part of the assessee’s earlier consultant in attending the proceedings before the first appellate authority or complying with the various notices issued to the assessee. The assessee was not kept abreast of the appellate proceedings by her earlier consultant, and when ultimately the CIT(A)’s order reached at the address of the assessee, she came to the knowledge of the same. The assessee immediately engaged another advocate and filed the present appeal before the ITAT, and in the process, 59 days of delay was caused in ITA No.117/RJT/2023 3 filing the appeal. We find, the reasons attributed by the assessee for the impugned delay, is justifiable and unintentional so as to condone the delay of 59 days, because the assessee is gaining nothing by not filing the appeal in time before the Tribunal. On the other hand, if the appeal is not filed before the Tribunal, then the assessee shall be fastened with huge tax and penalty in view of nature of addition made under section 69A read with section 115BBE of the Act. Therefore, to meet ends of justice, we condone the delay of 59 days in filing the appeal before the Tribunal, and proceed to adjudicate the appeal of the assessee on merit. 4. The grounds raised in the appeal reads as under: “1. On the facts and in law, the CIT (A) has erred in sustaining the Assessment Order passed by the ITO u/s 144 despite the Appellant had made full and true submission during the course of hearing to justify the Cash Deposits vide letter dated 28.06.2019. 2. The CIT(A) has erred in passing the Appellate Order u/s 250 without providing adequate Opportunity of being heard/ short hearing Notices and thereby violated the principle of Audi alteram partem. The Order passed u/s 250 by the CIT (A) needs to be quashed and/or the matter needs to be restored for adjudication before the CIT(A) In the interest of justice. 3. The Ld. CIT(A) and the AO has erred on facts and in law in making addition u/s 69A r.w.s. 115BBE of the IT ACT-1961 of Rs. 40,58,800/- being aggregate credit in Bank Accounts with HDFC Bank needs to be deleted as: 3.1 Despite the fact that the appellant was having opening cash on hand balance of Rs.858673/- as on 01.04.2016 and the amount of Rs.3900000/- deposited during the year out of the opening cash balance, the addition is unjustified, unwarranted and needs to be deleted in toto. 3.2 The remaining amount of Rs. 1,58,800 are bank to bank transactions which has been blindly ignored by the AO and CIT(A). 4. The CIT(A) has also disregarded the return of income filed for A.Y. 2016-17 on the premise that it was filed after demonetization period. The mere invalidation of return due to technical grounds should not hinder natural justice. The return was filed within due dates allowed u/s 139(4) providing appropriate income for the year. ITA No.117/RJT/2023 4 5. At the outset, the ld.counsel for the assessee argued that the primary rule of principles of natural justice has been violated in the present case, because the ld.CIT(A) without giving proper opportunity of being heard to the assessee, and even without considering the material available on record, passed the exparte order, and therefore, the order passed by the Ld.CIT(A)are in violation of fundamental rights of the assessee of being heard. He submitted that during the assessment proceedings the assessee had filed written submissions dated 28.6.2019 and furnished complete details of the source of cash deposits, which were treated as unexplained credit entries and taxed the same under section 69A of the Act read with section 115BBE of the Act by the AO. Therefore, in the absence of non-consideration of material placed on record and absence of fair and reasonable opportunity of hearing, the impugned order of the CIT(A) is illegal and liable to be set aside, and the claim of the assessee should be allowed in terms of material placed on record. 6. On the other hand, the ld.DR defended the order of the ld.CIT(A) and drew our attention to page nos.4 and 4 of the impugned order, where the ld.CIT(A) has given reasons for passing the ex parte order due to non-prosecution. 7. We have heard rival submissions and gone through the orders of the Revenue authorities. We have also gone through the details which were furnished by the assessee before the Revenue authority during the assessment proceedings, copies of which are placed in PB Page No.23 to 59. Prima facie it appears from the order of the ld.CIT(A), the reason for ex parte proceedings mentioned by the ld.CIT(A) in his impugned order was that the assessee was given ITA No.117/RJT/2023 5 repeated opportunities, but did not furnish any documents/evidences, and therefore, the ld.CIT(A) accepted the decision of the AO as such. However, the material available with us suggest otherwise. It appears that the ld.CIT(A) has missed to consider the details furnished by the assessee while passing appellate order and outrightly accepted the finding of the AO. In this regard, it is to be noted that section 250(5) clearly provides the order of the ld.CIT(A) disposing of the appeal shall be in writing and shall state the points for determination, and the decision thereon and the reason for the decision. Therefore, we find the impugned order of the ld.CIT(A) is not in consonance with provisions of section 250(5) of the Act, which require the ld.CIT(A) to pass a speaking order. No doubt on the face of the record, it suggests that the assessee had furnished the details with regard to the dispute and filed written submissions, however, the ld.CIT(A) did not consider the same while passing the impugned order. Thus, we are of the view that the assessee deserves hearing of its case on merit. At the same time, we also note, the assessee has been given opportunities for prosecution of her appeal before the ld.CIT(A), but has not substantially responded. However, based on the fact that impugned order was passed without considering written submissions filed by the assessee and the material available on record, therefore, in the interest of justice the grounds of appeal raised by assessee are set aside back to the file of NFAC/Ld. CIT(A) to re-adjudicate the same on merit after providing fair opportunity of hearing to the assessee. The assessee is also directed to appear before NFAC/Ld. CIT(A) as and when the date of hearing is fixed and to provide all necessary evidence and information without any ITA No.117/RJT/2023 6 further delay and not to seek adjournment without any valid reasons. 8. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the Court on 6 th September, 2023 at Ahmedabad. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 06/09/2023