Dineshbhai Vallabhbhai Kabariya, Surat V. ITO, Ward 3(3)(1), Surat

ITA 179/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1969 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-05-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 16-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Set aside
• Section: 147; 148; 144; 143(3); 69B; 250; 139(1); 13

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.179/SRT/2024 Assessment Year: (2018-19) (Physical Hearing) Dineshbhai Vallabhbhai Kabariya, Plot No.16, Sahajanand Banglowz, Kosmada Village, Taluka Kamrej, 394185, Gujarat Vs. The ITO, Ward – 3(3)(1), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: AUDPK2435L (Appellant) (Respondent) Appellant by Ms Chaitali Shah, CA Respondent by Shri J. K. Chandnani, Sr. DR Date of Hearing 30/05/2024 Date of Pronouncement 30/05/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the appellant emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 28.12.2023 by the Learned Commissioner of Income Tax (Appeals), [in short, ‘Ld. CIT(A)’] National Faceless Appeal Centre (in short, ‘NFAC’), Delhi, for the Assessment Year (AY) 2018-19. 2. The grounds of appeal raised by the assessee are as under: “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not admitting the appeal u/s 249(4) when no tax was payable as advance tax. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Assessing Officer has erred in passing order u/s 144 instead of passing order u/s 143(3) of the I.T. Act, 1961. 2 179/SRT/2024/AY.2018-19 Dineshbhai V. Kabariya 3. On the facts and circumstances of the case as well as on the subject, the learned assessing officer has erred in re-opening assessment u/s 147 by issuing notice u/s 148 of the I.T. Act, 1961. 4. On the facts and circumstances if the case as well as law on the subject, the learned Assessing Officer has erred in making the addition on account of unexplained investment u/s 69B amounting to Rs.35,64,000/-. 5. It is therefore prayed that assessment framed u/s 144 r.w.s. 147 r.w.s. 144B of the Act may kindly be quashed and/or addition by assessing officer may please be deleted or the case may be set aside to the file of CIT(A) with an appropriate directions. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 3. The facts of the case are in brief are that the assessee had not filed his original return of income u/s 139(1) for AY.2018-19. The assessee was engaged in the business of wholesale and retail trade. The assessee has made various transactions amounting to Rs.2,89,35,998/- from different sources. The case of the assessee was reopened u/s 147 of the Act. A show-cause notice was issued on 19.03.2022 by the Assessing Officer u/s 148A(b). However, the assessee has not complied with notice. The Assessing Officer passed the order u/s 148A(d) of the Act, dated 30.03.2022 for reopening the case. Further, a notice u/s 148, dated 30.03.2022 was issued against which the assessee filed the return on 19.04.2022. Subsequently, various notices were issued to the assessee u/s 142(1) of the Act. In response, the assessee has submitted various documentary evidences. Vide a show-cause notice dated 10.03.2023, the assessee was asked as to why the cost of unexplained investment in immovable property should not be treated as unexplained investment and added to the total income of the assessee. The assessee has filed a reply dated 14.03.2023 along with the 3 179/SRT/2024/AY.2018-19 Dineshbhai V. Kabariya additional reply dated 22.03.2023. The Assessing Officer rejected the reply and re-opened the assessment u/s 144 r.w.s. 147 of the Act. 4. During the assessment proceedings, the assessee has clarified that he purchased agricultural land along with 3 co-owners through registered deed amounting to Rs.1,44,00,000/-. The assessee’s share was only 25% in the said agricultural land, and accordingly the assessee was liable to pay an amount of Rs.36,00,000/- to the sellers for the purchase of the property. The assessee has paid only Rs.36,000/- to the sellers and for the balance payment of Rs.35,64,000/-, the assessee has given post-dated cheques to the sellers. The assessee has submitted various documentary documents and evidences to prove the genuineness of the transactions during the course of assessee proceedings, namely, (i) copy of sale deed, (ii) copy of the related transaction bank statement, (iii) statement of asset and liability, (iv) cash flow statement etc. The Assessing Officer rejected the reply of the assessee and made addition of Rs.35,64,000/- to the total income by treating as unexplained investment u/s 69B r.w.s. 115BBE of the Act. 5. Aggrieved by the order of Assessing Officer, the assessee filed an appeal before Ld. CIT(A). The Ld. CIT(A) observed that the assessee failed to file return of income u/s 139(1) of the Act. The impugned order was passed u/s 147 r.w.s 144 of the Act by creating a demand of Rs.59,29,255/- and the assessee was asked vide notice u/ 156 of the Act to deposit the demand but it is noticed by the Ld. CIT(A) that assessee has not deposited the demand, before filing the appeal. Further, the Ld. CIT(A) observed that as per provision of section 4 179/SRT/2024/AY.2018-19 Dineshbhai V. Kabariya 249(4)(b) of the Act, where no return has been filed by the assessee, the assessee has to pay an amount equal to the amount of advance tax which was payable by him. The Ld. CIT(A) has concluded that the appellant failed to contradict the information given at Sl. No.9 of Form No.35 and to prove that it has made payment of amount equal to the advance tax which was due on its income. 6. Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before this Tribunal. 7. We have heard rival submission of both the parties and perused the material available on record. At the outset of hearing, the Learned Authorized Representative (Ld. AR) of the assessee submits that assessee has not filed return of income u/s 139(1) as the assessee was not having taxable income. However, on receipt of notice u/s 148, dated 30.03.2022, the assessee filed return of income on 19.04.2022. The assessee was not having income above the taxable limit, hence there was no question of payment of amount equal to the amount of advance tax as per the section 249(4)(b) of the Act. The Ld. CIT(A) dismissed the appeal of the assessee by taking view that assessee has not paid the advance tax. The Ld. AR submits that appeal of the assessee was dismissed as un-admitted, therefore matter may be restored back to the file of Ld. CIT(A) to adjudicate the issue on merit. In support of the submission, the assessee relied upon the decisions viz: (i) Ranajitbhai Balvantbhai Patel vs ITO, ITA No.646/SRT/2023, dated 28.11.2023 and (ii) Hotel Sai Siddi (P.) Ltd. (2011) 13 taxmann.com 155 (Pune). 5 179/SRT/2024/AY.2018-19 Dineshbhai V. Kabariya 8. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue supported the order of the Ld. CIT(A). 9. We have considered the rival submission of both the parties and perused the order of lower authorities. We find that the stand of the assessee right from the beginning is that he has no taxable income, and hence, there was no occasion for filing in return of income or payment of advance tax. The addition in the assessment order was made on account of unexplained investment u/s 69B r.w.s. 115BE of the Act. Considering the decisions of Co-ordinate Bench of this Tribunal in the case of Ranajitbhai Balvantbhai Patel vs ITO (supra) and Hotel Sai Siddi (P.) Ltd. (2011) 13 taxmann.com 155 (supra), the order of Ld. CIT(A) is set-aside and the appeal is restored back to the file of Ld. CIT(A)/NFAC to decide the grounds of appeal on merits. For statistical purposes, the appeal of the assessee is allowed. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced on 30/05/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 30/05/2024 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat