GUNWANT SOHANLAL KHERODIYA, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2, KALYAN

ITA 1334/MUM/2023

AI Insights

This case involves an appeal by Gunwant Sohanlal Kherodiya against the order of the Commissioner of Income Tax (Appeals)-11, Pune, which was dated 17.03.2023 for the assessment year 2016-17. The primary grievance of the assessee was the passing of an ex-parte order by the CIT(A) without providing a proper opportunity of hearing, which the assessee claimed was a violation of natural justice. The assessee, engaged in the business of contracting and real estate, had his income tax return for the year under consideration assessed, which included additions and disallowances on various grounds such as disallowance of expenses, unreported capital gains, and undervalued property transactions. The Tribunal noted the absence of the assessee and his representative during the hearings and the lack of written submissions or relevant documents to support the appeal. Despite these shortcomings, the Tribunal decided to set aside the CIT(A)'s order and remand the case for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299310 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 05-07-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 19-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI ABY T. VARKEY, JM AND SHRI AMARJIT SINGH, AM आयकर अपील सं/ I.T.A. No.1334/Mum/2023 (निर्धारण वर्ा / Assessment Year: 2016-17) Gunwant Sohanlal Kherodiya 504, AE, Swami Devprakash Garden, Said Section Ambernath-421501. बिधम/ Vs. DCIT, Circle-2 Plot No.30, Office No.101, Jeevandeep Apartment, Opp Sibu Place, Ambarnath, Thane- 421501. स्थधयी लेखध सं./जीआइआर सं./PAN/GIR No. : AGEPK2846E (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) सुनवाई की तारीख / Date of Hearing: 06/07/2023 घोषणा की तारीख /Date of Pronouncement: 27/07/2023 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. Commissioner of Income Tax-11, Pune dated 17.03.2023 for assessment year 2016-17. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) passing ex-parte order. 3. None appeared for the assessee, despite notice issued by RPAD dated 12.06.2023 informing the assessee about fixing of appeal on 06.07.2023. Since, none appeared after being served the notice, we proceed to adjudicate the grounds of appeal raised by assessee. Firstly we take note of ground no. 1 which is against the action of the Ld. CIT(A) in passing the impugned order without giving opportunity of hearing to the assessee. It is noted that the Ld. CIT(A) has fixed the appeal on thirteen (13) occasions. However, on perusal of the dates of Assessee by: None Revenue by: Shri Ram Krishna Kedia (Sr. AR) ITA No.1334/Mum/2023 A.Y. 2016-17 Gunwant Sohanlal Kherodiya 2 hearing refered to by Ld. CIT(A) it is noted few of the dates would fall during Covid-19 Pandemic period and as per the spirit of Hon’ble Supreme Court suo-motto decision we need to condone those non- compliance upto May, 2022 which stands condoned. Still, we find that the appeal was fixed before the Ld. CIT(A) on five (5) occasions; and only once the assessee requested for adjournment on 25.07.2022. And thereafter, neither filed written submission/relevant documents nor any adjournment application. The main grievance of the assessee is that he has not been given proper opportunity of hearing. 4. It is noted that the assessee an individual was carrying out the business of a contractor and is partner in various partnership firms which are engaged in the business of real estate/builders and developers. For the year under consideration, the assessee has filed his return of income on 28.06.2017 declaring total income of Rs.39,27,520/- and agriculture income of Rs.40,86,036/-. The AO has made an addition/disallowance on the following issues which are as under: - “(i) Addition of Rs. 41,99,045/- was made on account of disallowance of expenses claimed against the remuneration from partnership firm and interest on capital from partnership firm totaling to Rs. 82,95,839/- as the assessee could not file any documentary evidence in support of such claim of expenses. ii) Addition of Rs. 47,50,000/- on account of capital gains based on AIRIITS details indicating that the appellant has sold a property along with other co-owners and no working of capital gains was filed either in the ITR or during the assessment proceedings. ITA No.1334/Mum/2023 A.Y. 2016-17 Gunwant Sohanlal Kherodiya 3 iii) Addition of Rs. 64.96,300/- was made u/s 96(2)(vii)(b) of the Act as the appellant purchased 3 properties during the year under consideration, at a value less than the value for stamp duty purposes, along with other co-owners. The reasons for making this addition have been explained in detail by the Assessing Officer in the assessment order.” 5. The Ld. CIT(A) has partly allowed the appeal of the assessee, still not satisfied, the assessee is before us. As noted (supra) the main grievance of assessee is for passing the impugned order without giving proper opportunity to assessee, which according to assessee is violative of natural justice. As noted, the assessee has not appeared despite notices before Ld. CIT(A). However, a perusal of the ground no. 1.3 reveals that there was medical exigency due to which the assessee could not appear/file/written submission/relevant documents before the Ld. CIT(A) which fact the Ld. AR ought to have brought to the notice of Ld. CIT(A). The assessee/Ld. AR should be vigilant once they have entered into litigation and the law does not help a sleeping litigant. The Ld.AR of assessee need to be vigilant in future. And be that as it may, we note that the Ld. CIT(A) has passed an exparte order without hearing the assessee because assessee neither appeared nor filed written submission/relevant documents necessary for supporting the grounds of appeal raised by him. In such a scenario, we are inclined to set aside the impugned order of the Ld. CIT(A) and direct the Ld. CIT(A) to decide the grounds of appeal as law mandated i.e. in accordance to section 250(6) of the Income Tax Act, 1961 (hereinafter “the Act”) and the assessee is directed to be diligent and appear/file ITA No.1334/Mum/2023 A.Y. 2016-17 Gunwant Sohanlal Kherodiya 4 written submission/relevant documents and the Ld. CIT(A) to decide the grounds of appeal after hearing the assessee in accordance to law. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on this 27/07/2023. Sd/- Sd/- (AMARJIT SINGH) (ABY T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 27/07/2023. Vijay Pal Singh, (Sr. PS) आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 4. आयकर आयुक्त / CIT 5. ववभागीय प्रवतवनवि, आयकर अपीलीय अविकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यावपत प्रवत //True Copy// उि/सहधयक िंजीकधर /(Dy./Asstt. Registrar) आयकर अिीलीय अनर्करण, मुंबई / ITAT, Mumbai