Mr.Akshat Doneria, Greater Noida V. ITO-4(1), Agra

ITA 2/AGR/2021

AI Insights

The case involves Sh. Akshat Doneria, the appellant, who contested the ex parte assessment and subsequent appeals conducted by the Income Tax Department, Agra. The assessments for the year 2011-12 were initially processed based on the return filed by the assessee, declaring a total income significantly lower than what was later assessed. The case was selected for scrutiny, and despite multiple notices, the assessee did not appear, leading to an ex parte assessment. The assessee argued that the notices were sent to an outdated address, despite having informed the department of his new address. The Tribunal found merit in the assessee's argument regarding the improper service of notices and directed a de novo assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114070 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 19-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 16-02-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P.K. SAHEGAL
• Keywords: Principle of natural justice; Non compliance
• Section: 131; 144; 143(3); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH ‘SMC-5’ : AGRA (Through Video Conferencing) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI YOGESH KUMAR US, JUDICIAL MEMBER (Through Virtual Hearing) ITA No. 02/AGR/2021 Assessment Year : 2011-12 SH. AKSHAT DONERIA, STAR COURT 8/1902, JAYPEE GREENS, GOLF COURSE, SURAJPUR KASNA ROAD, GREATER NOIDA (PAN: AGHPD8686Q) Vs. ITO, WARD 4(1), INCOME TAX DEPARTMENT, AGRA (Appellant) (Respondent) Appellant by : Shri P.K. Sahegal, Advocate Respondent by : Shri Shailendra Srivastava, Sr. DR. Date of hearing : 20.07.2023 Date of pronouncement : 25.07.2023 ORDER PER SHAMIM YAHYA, AM : This appeal by the assessee for the assessment year 2011-12 is directed against the Order dated 31.08.2008 of Learned CIT(A)-1, Noida on as many as following 09 Grounds of Appeal:- 2 2 1) That in view of the facts and circumstances of the case, the learned authorities below have erred both in law and on the facts in not properly serving the notice(s) for fixation of hearing on the address intimated by the appellant and in the absence of any information about the date of hearing / compliance, the appellant could not defend his case properly and judiciously, resulting into denial of an adequate opportunity and completion of exparte assessment and appeal in exparte manner. 2) That as the appellant, on account of reason beyond control, could not participate in the assessment as well as in the appeal proceedings, resulting into exparte order(s), thus in view of the principles of equity and natural justice, he deserves an adequate opportunity to defend his case properly and judiciously. Thus his case may be restored back to Leanred AO for denovo assessment after ensuring proper opportunity to the appellant. 3) That in view and circumstances of the case, the Ld. CIT(A)-I, Noida has erred both in law and on facts in dismissing the appeal of the appellant, solely on the basis of his uncalled for and unwarranted observations, which are even contrary to the facts of the appellant’s case. 4) That the various debit and credit transactions emerging in the regular and disclosed saving bank accounts of the appellant 3 3 being fully explained and verifiable with reference to the relevant evidences / material, thus the Ld. CIT(A)-I, Noida has erred both in law and on facts in sustaining the arbitrary addition of Rs. 17,20,688/- made by the AO, by treating the credit entries appearing in the saving back accounts, as alleged undisclosed income of the appellant. 5) That on the facts and circumstances of the case, the Ld. CIT(A)-I, Noida has erred both in law and on facts in the arbitrarily sustaining the estimated addition of Rs. 5,00,000/- made by the Ld. AO towards the so called “Margin Money” allegedly deposited by the appellant for making transactions in derivatives, equity and commodities with MCX and various brokers solely on the basis of his wrongly drawn unilateral adverse inferences and on surmises and conjectures. There being no evidence on record justifying such estimated addition, thus the same deserves to be deleted. 6) That upon due consideration of facts and in the circumstances, the Ld. CIT(A)-I, Noida has been arbitrary and unjust in sustaining the addition of Rs. 91,200/- made by the AO, treating the agriculture income declared by the appellant as income from other sources, by completely brushing aside the past history and material, facts in this regard. 4 4 7) That in view of the facts and circumstances of the case, the Ld. CIT(A)-I, Noida has erred both in facts and in law, in upholding the denial of deduction of Rs. 66,809/- claimed by the appellant under chapter VI-A, though the related payment and source thereof were duly verifiable from the appellant saving bank account(s), which were available with the AO. 8) That the Ld. Authorities below have erred both in law and facts in charging interest under ss. 234A, 234B, 234C & 234D and initiating penalty proceedings under section 271(1)© of the I.T. Act, 1961. 9) That the appellate order dated 31.8.2018 passed by the Ld. CIT(A)-I, Noida is against the law and on facts of the appellant’s case. The appellant seeks permission to modify and / or any other ground/grounds of appeal as the circumstances of the case might require or justify. 2. At the time of hearing, the Ld. Counsel for the assesee has only argued the grounds no. 1 to 3 and did not press the ground no. 4 to 9, hence, the grounds no 4 to 9 are dismissed, as not pressed. 3. The brief facts of the case are the assessee filed his return of income on 22.2.2012 declaring total income of Rs. 2,39,900/-, Net agricultural income of Rs. 91,200/- and aggregate income at Rs. 3,31,100/- in the status of individual through e-filing and the same was processed 5 5 accordingly. Later the case was selected for scrutiny and notice u/s. 143(2) dated 25.9.2012 was issued and served upon the assessee well within time fixing date of compliance for 28.9.2012.. Subsequently, notices u/s. 142 of the Act dated 19.6.2013 and dated 17.10.2013 alongwith basic questionnaire was issued to the assessee, but none appeared on behalf of the assessee. However, on 22.1.2014, the AR appeared and filed the computation of income and challans of tax paid for AY 2011-12, however, no compliance of any sort was made regarding the questionnaires and the case was adjourned for 04.2.2014, but assessee not attended. AO issued summons u/s. 131 dated 6.2.2014, but not response was received by the assessee, hence, the AO completed the assessment u/s. 144 of the Act vide order dated 10.3.2014 by making various additions assessed the total income at Rs. 26,18,590/-. Against the assessment order, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 31.08.2018 has confirmed the order of the AO by observing that the assessment order suffers from no infirmity and dismissed the appeal of the assessee. Aggrieved with the order dated 31.08.2018 of the Ld. CIT(A)-1, Noida, now the assessee is in appeal before the Tribunal. 4. At the time of hearing, Ld. AR for the assessee submitted that the assessee filed the return with the ITO, Ward 4(1), Agra and at that time the assessee was residing at “Flat No. B-5, Kripa Dham Complex, Fatehabad 6 6 Road, Tajganj, Agra and the notice u/s. 143(3) of the Act dated 25.9.2012 was issued and served on that address and on the date fixed for compliance, the AR of the assessee appeared and the case was then adjourned sine die. It was further submitted that in between the assessee alongwith his family permanently shifted to NOIDA at Star Court 8/1902, Jaypee Greens, Gold Course, Surajpur Kasna Road, Greater Noida, Uttar Pradesh-201306, which intimation was given to the Income Tax Department, which is evident from the letter issued by the Income Tax PAN Services Unit, Pune bearing reference No. F.No. DIT(E).PAN/ITMN_REG, PKGID:PCI/0016/18-04-2013/FFL, KNP/80/8810302090760801111/90223254, a copy of which is placed on record and also the assessee sent a letter on 17.3.2013 informing the change of his address. It is further submitted that despite such change of address notified to the Income Tax Department, the AO continued to send the notices on the old address of the assessee and thus these were never received by him and accordingly he could not make compliance to such notice for bonafide reasons. Upon change of address and jurisdiction, the assessee started filing his return of income from AY 2015-16 with the correct jurisdiction i.e. ITO, Ward 5(1)(1), GB Nagar, Noida, but AO did not take cognizance of change of address and jurisdiction and made the assessment exparte u/s. 144 of the Act vide assessment order dated 10.3.2014. Further, on the request of the assessee vide letter dated 13.2.2018, the appeal filed by the assessee before the Ld. 7 7 CIT(A)-2, Agra was transferred by the CCIT, Kanpur to the CIT(A)-I, Noida, but unfortunately, the Ld. CIT(A)-1, Noida despite having knowledge of the changed address, continued to send the notice on the old address, resulting into unintentional non compliance by the assessee before the Ld. CIT(A)-1, Noida and even the appellate order was sent by the Ld. CIT(A)-1 Noida on assesee’s wrong address, and thus could not be received by the assessee. It was further submitted that such facts came to the knowledge of the assessee only during the inspection of the records and he had obtained the certified copy of appellate order for filing the appeal before the Tribunal. In view of above, he submitted that the exparte assessment and appeal have been completed for the fault of the assessee but solely on account of improper service of notices, on the old addresss, which did not come to the knowledge of the assessee and thus the principles of equity and natural justice have been grossly violated in case of the assessee. Hence, he requested to restore back the case of the assessee to the file of the AO for de novo assessment with the directions he shall afforded proper opportunity to defend his case properly and judiciously. 5. On the contrary, Ld. DR relied upon the orders of the authorities below and observing that proper opportunity was given to the assessee, but he could not respond, thus the assessment and appeal orders were 8 8 rightly passed exparte, which do not require any interference and therefore, may be upheld. 6. We have gone through the rival contentions and perused the records. We find that assessment order was passed exparte u/s. 144 of the Act 10.3.2014 by determining the total income of the assessee at Rs. 26,18,590/- against the return of income of Rs. 2,39,900/- on account of non-appearance of the assessee before the AO which was occurred by non-receipt of the notice, due to change of address, which the assessee has intimated to the Income Tax Department, evidence of which are placed on record, hence, non compliance to such notices are based on bonafide reasons and even the appellate order was sent by the Ld. CIT(A)-I Noida on the wrong address and thus could not be received by the assessee. In view of above, it is established that the exparte assessment and the appeal have been completed not for the fault of the assessee but solely on account of improper service of notices, on the old address, which did not come to the knowledge of the assessee. Accordingly, in our considered opinion, interest of justice, will be served if the matter is remitted back to the file of the Assessing Officer to consider the issues de novo, after giving adequate opportunity of being heard to the assessee and by sending the notices on the correct address, in accordance with law. Hence, we hold and direct accordingly. 9 9 7. In the result, the appeal of the assessee is partly allowed for statistical purposes. Above decision was pronounced on 25 th July, 2023 Sd/- Sd/- (YOGESH KUMAR US) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRB Copy forwarded to: - 1. Appellant. 2. Respondent. 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar