Nilesh Babubhai Kachhadiya, Surat V. Assistant Commissioner of Income Tax, Central Circle-1, Surat

ITA 210/SRT/2022

AI Insights

The case involves two appeals by different assessees, Jayeshbhai Rasikbhai Rajani and Nilesh Babubhai Kachhadiya, against the orders of the CIT(A) for the Assessment Year 2017-18. Both appeals were related to a common issue of an addition of Rs. 7,00,000 under Section 69A of the Income Tax Act, alleging unexplained money. The CIT(A) had dismissed the appeals ex-parte, citing non-attendance of the assessees. The Tribunal found that the CIT(A) had not properly adjudicated the appeals as required by law and restored the matters for fresh consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301537 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 17-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency; Set aside
• Section: 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 209/Srt/2022 (Assessment Year: 2017-18) (Virtual hearing) Jayeshbhai Rasikbhai Rajani, 33, Sharda Vihar Society, Near Dharam Nagr, A.K. Road, Surat-395006. PAN No. AKWPR 3571 M Vs. A.C.I.T., Central Circle-1, Surat. Appellant/ assessee Respondent/ revenue ITA No. 210/Srt/2022 (Assessment Year: 2017-18) Nilesh Babubhai Kachhadiya, 94, Paramhans Society, B/s. Samast Patidar Wadi, Ambatalavadi, Katargam, Surat-395004. PAN No. AQUPK 7241 F Vs. A.C.I.T., Central Circle-1, Surat. Appellant/ assessee Respondent/ revenue Appellant represented by Ms. Chaitali Shah, CA Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 30/01/2023 Date of pronouncement 30/01/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by two different assessees are directed against the separate orders of learned Commissioner of Income Tax (Appeals)-4, Surat (in short, the ld. CIT(A) both dated 19/05/2022 for the Assessment years (AY) 2017-18. In both these appeals, the assessee(s) has raised common grounds of appeal, facts of both these appeals are similar, therefore, with the consent of parties, both these appeals were clubbed, heard together and are being decided by ITA No.209 & 210/Srt/2022 Jayeshbhai Rasikbhai Rajani Vs ACIT & 1 Anr 2 this consolidated order. For appreciation of facts, the appeal in ITA No. 209/Srt/2022 for the A.Y. 2017-18 is treated as a “lead case”. In this appeal, the assessee has raised following grounds of appeal: “1. On the facts and circumstances of the case, the learned CIT(A) has grossly erred in passing the impugned appellate order on an ex- parte basis, without providing the appellant a proper opportunity of being heard and also without properly appreciating the facts and merits of the case as were duly discussed in the memorandum of appeal. Therefore, the appellate order of the learned CIT(A), needs to be quashed as being erroneous, illegal and bad in law. 2. On facts and circumstances of the case and in law, the learned CIT(A) has grossly erred in confirming the action of the learned AO in making an addition of Rs. 7,00,000/- u/s 69A of the Act alleging unexplained money on the basis of the cash found and seized from the appellant, without appreciating that the said seized cash is neither belonging to, nor pertaining to the appellant but the same is belonging to his partnership firm viz. M/s Tapti Jewells and which is even reflected in the regular books of the said firm. Hence, the impugned addition of Rs. 7,00,000/- as made by the learned AO and confirmed by the learned CIT(A) in the hands of the appellant u/s 69A of the Act alleging unexplained money, merely on conjectures, surmises and assumptions, needs to be deleted as being absolutely erroneous, illegal and bad in law. 3. The appellant craves leave to add, amend, alter, substitute, modify in any or all the above grounds of appeal, if necessary, on the basis of submissions to be made at the time of personal hearing.” 2. At the outset of hearing, learned Authorized Representative (Ld.AR) for the assessee submits that Ld. CIT(A) dismissed the appeal of assessee in an ex parte order without considering the merit of the case. The Ld. CIT(A) dismissed the appeal of assessee without adjudicating the various grounds of appeal as per mandate of Section 250(6) of the Act. The ld AR for the assessee submits that the assessee has no intention to avoid the hearing before the ld. CIT(A), ITA No.209 & 210/Srt/2022 Jayeshbhai Rasikbhai Rajani Vs ACIT & 1 Anr 3 in fact, the assessee always attended or filed application for adjournment. The assessee is a partner in a firm and the appeal of firm was also pending before the ld. CIT(A). In case of assessee, the substantive addition was made in the hands of assessee, however, the protective addition was made on the firm of assessee. The assessee made an application for consolidating all the appeals i.e. appeal of assessee other than the partner namely Nilesh Babubhai Kachhadiya who is also partner in the same firm i.e. Tapti Jewells. The assessee was expecting that all the cases would be adjudicated together, however, the ld. CIT(A) dismissed the appeal of assessee and the appeal of firm namely Tapti Jewells, is still pending before the ld. CIT(A). The ld. AR of the assessee submits that the assessee has a good case on merit and likely to succeed if the assessee is to be heard and the appeal is to be decided on merit. The ld. AR submits that complete facts and details in the form of statement of fact was filed before the ld. CIT(A), however, the ld. CIT(A) did not think even to refer the basic fact leading to additions. The ld. AR of the assessee prayed that matter may be restored back to the file of Ld. CIT(A) for adjudicating the issue afresh in accordance with law and she undertake on behalf of the assessee to be more vigilant in attending the hearing before ld CIT(A). ITA No.209 & 210/Srt/2022 Jayeshbhai Rasikbhai Rajani Vs ACIT & 1 Anr 4 3. On the other hand, the ld. Sr. DR for the revenue supported the order of ld. CIT(A) and submitted that the assessing officer as well as ld CIT(A) granted sufficient opportunity to the assessee. The assessee failed to availed such opportunity and now taking plea that sufficient opportunity was not given to him. The assessee has no regards to the public authorities in attending the hearing before them and now claiming that no fair or reasonable opportunity was not given to the assessee. 4. I have heard the submissions of both the parties and have gone through the orders of lower authorities carefully. I find that the Assessing Officer while passing the assessment order under section 143(3) on 20.12.2018 made addition under section 69A of Rs. 7.00 lacs as unexplained money. The ld. CIT(A) dismissed the appeal of assessee by holding that in spite of several opportunities, no one attended the hearing proceedings. On the basis of which, the assessee is not interested in pursuing the appeal. I further find that the ld. CIT(A) has not adjudicated the grounds of appeal raised by assessee as per mandate of Section 250(6) of the Act. Section 250(6) mandates that order of ld. CIT(A) must contain facts of the case, points of determination and decision thereon and reasons of such decision. Considering the fact that ld. CIT(A) passed the ex parte order, in my view, the assessee was not offered sufficient and ITA No.209 & 210/Srt/2022 Jayeshbhai Rasikbhai Rajani Vs ACIT & 1 Anr 5 reasonable opportunity of hearing, therefore, the order of ld. CIT(A) is set aside and all the grounds of appeal raised by the assessee are restored back to the file of ld. CIT(A) to decide all the grounds of appeal afresh and in accordance with law. The ld CIT(A) is also directed to consider the consolidation of the appeal of assessee as well as his firm namely Tapti Jewells as per the practice and procedure. Needless to direct that before passing the order, the ld. CIT(A) shall grant reasonable opportunity of hearing to the assessee. The assessee is also directed to be vigilant and not to cause further delay and seek adjournment without any valid reason. The assessee is further directed to file all the relevant evidence in his power and possession, if so desired without any further delay, before the ld. CIT(A). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 5. In the result, the appeal of assessee is allowed for statistical purposes only. ITA No. 210/Srt/2022 by Nilesh Babubhai Kachhadiya 6. As recorded earlier the assessee has raised common grounds of appeal as raised in appeal in ITA No. 209/Srt/2022 for A.Y. 2017-18, except variation of addition. Considering the fact that I have restored the appeal back to the file of ld. CIT(A) for fresh adjudication of all the issues on merit, therefore, considering the principle of consistency, the ITA No.209 & 210/Srt/2022 Jayeshbhai Rasikbhai Rajani Vs ACIT & 1 Anr 6 appeal of ITA No. 210/Srt/2022 for the A.Y. 2017-18 is also restored back to the ld. CIT(A) with similar direction. In the result, this appeal is also allowed for statistical purposes. 7. In the final result, both these appeals of the assessee(s) are allowed for statistical purposes only. Order pronounced in the open court on 30 th January, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 30/01/2023 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT(A) 4. CIT 5. DR 6. Guard File By order Sr.Private Secretary, ITAT, Surat