Shri Ramesh Mavji Patel, Ahmedabad V. The ITO, Ward-3(2)(2), Ahmedabad

ITA 227/AHD/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7779 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: DIVYANG J SHAH
• Keywords: Unexplained investment; Set aside
• Section: 147; 148; 144

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD ( CONVENED THROUGH VIRTUAL COURT ) BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 227/AHD/2020 ( ASSESSMENT YEAR : 2011-12) RAMESH MAVJI PATEL C/O. DIVYANG J SHAH 201, 2 ND FLOOR, DEVASHISH COMPLEX, NR. BAWARCHI RESTAURANT, OPP. KUSHAL HOUSE, C. G. ROAD, AHMEDABAD - 380006 / VS. THE INCOME TAX OFFICER WARD -3(2)(2), ROOM NO.502, A WING 5 TH FLOOR, PRATYAKSH KAR BHAWAN, AMBAWADI, AHMEDABAD 380 014 ./ ./ PAN/GIR NO. : BBBPP8230L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DIVYANG J SHAH, A.R. / RESPONDENT BY : SHRI L. P. JAIN, SR.D.R. DATE OF HEARING 18/01/2021 !'# / DATE OF PRONOUNCEMENT 19/01/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-3, AHMEDABAD, (CIT(A) IN SHORT), DATED 13.01.2020 ITA NO. 227/AHD/20 [RAMESH MAVJI PATEL VS. ITO] A.Y. 2011-12 - 2 - ARISING IN THE ASSESSMENT ORDER DATED 13.12.2018 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 144 R.W.S. 147 OF T HE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2011-12. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE C ASE AND IN LAW, LD. ASSESSING OFFICER HAS ERRED IN MAKING ADDI TION OF RS.4,50,000/- AS UNEXPLAINED INVESTMENT U/S.69 OF T HE ACT? 2. WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. AO ERRED IN SERVING ASSESSMENT ORDER PASSE D U/S 144 R.W.S. 147 OF THE ACT? 3. WHETHER, ON FACTS AND IN CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. ASSESSING OFFICER HAS ERRED IN ISSUING NOT ICE U/S.148 OF THE ACT? 3. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL. AS PER THE ASSESSMENT ORDER, THE CASE OF THE ASSESSEE WAS REOP ENED BY ISSUANCE OF NOTICE UNDER S.148 OF THE ACT HAVING REGARD TO T HE INFORMATION RECEIVED BY THE AO THAT THE ASSESSEE HAD MADE PAYME NT OF PREMIUM OF RS.4,50,000/- TO BAZAZ ALLIANZ INSURANCE PVT. LT D. DURING THE FINANCIAL YEAR 2010-11 CONCERNING AY 11-12 IN QUEST ION. WHILE RECORDING REASONS FOR INVOKING SECTION 148 OF THE A CT, IT WAS FURTHER OBSERVED BY THE AO THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME. HAVING REOPENED THE CASE UNDER S.147 R.W.S. 148 OF THE ACT, THE AO PROCEEDED TO MAKE SCRUTINY ASSESSMENT. THE AO NOTE D THAT NOTICE UNDER S.142(1) OF THE ACT WAS ISSUED AT TWO INSTANC ES IN THE MONTH OF OCTOBER AND NOVEMBER 2018, FOR WHICH, THERE WERE NO COMPLIANCES MADE ON BEHALF OF THE ASSESSEE AND NO A DJOURNMENT WAS SOUGHT. THE AO ACCORDINGLY PROCEEDED TO MAKE BEST JUDGMENT ASSESSMENT UNDER S.144 R.W.S. 147 OF THE ACT AND PA SSED AN ASSESSMENT ORDER DATED 13.12.2018 WHEREBY AN ADDITI ON OF RS.4,50,000/- WAS MADE UNDER S.69 OF THE ACT ON THE GROUND THAT ITA NO. 227/AHD/20 [RAMESH MAVJI PATEL VS. ITO] A.Y. 2011-12 - 3 - INVESTMENT MADE TOWARDS PAYMENT OF PREMIUM OF RS.4, 50,000/- TO BAZAZ ALLIANZ INSURANCE PVT. LTD. HAS REMAINED UNEX PLAINED. THE ASSESSMENT WAS THUS FRAMED AT RS.4,50,000/-. 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A) ALSO OBSERVED THAT THREE OPPORTUNITIES W ERE GIVEN BY HIM TO REBUT THE ADDITIONS BUT HOWEVER THE ASSESSEE HAS SOUGHT ADJOURNMENT ON TWO OCCASIONS AND DID NOT APPEAR ON THE THIRD OCCASION. THE CIT(A) ACCORDINGLY ENDORSED THE EX PARTE ACTION OF AO. 5. AGGRIEVED BY THE DISMISSAL OF THE APPEAL BY THE CIT(A), THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. WITH THE ASSISTANCE OF THE LEARNED COUNSEL FOR T HE ASSESSEE, WE FIND THAT THE CIT(A) HAS DISMISSED THE APPEAL OWING TO NON- ATTENDANCE. AS SUBMITTED ON BEHALF OF THE ASSESSEE , THE ASSESSEE IS A NON-RESIDENT PERSON AND THE ADDRESS OF THE ASSESS EE IN IN UNITED KINGDOM. THE NOTICES IN THE COURSE OF THE ASSESSME NT PROCEEDINGS WERE NOT SERVED OWING TO CHANGE OF ADDRESS FROM DUG ARD ROAD, UNITED KINGDOM TO MYHILL CLOSE, UNITED KINGDOM WHIC H RESULTED IN NON-SERVICE OF NOTICE. THE ASSESSEE EVENTUALLY LEA RNT OF THE ASSESSMENT DUE TO WITHDRAWAL OF RS.84,260/- TOWARDS TAX DEMAND RAISED IN IMPUGNED ASSESSMENT ORDER FROM THE BANK A CCOUNT OF THE ASSESSEE. IT IS FURTHER POINTED OUT ON BEHALF OF T HE ASSESSEE THAT BEFORE THE CIT(A) THE ASSESSEE ATTENDED AND SOUGHT ADJOURNMENT IN THE FIRST TWO INSTANCES. TWO OUT OF THREE NOTICES ISSUED WERE DULY ATTENDED AND SHORT ADJOURNMENT WAS ASKED. HOWEVER, ON THE THIRD OCCASION, THE REPRESENTATIVE OF ASSESSEE DID NOT KN OW ABOUT THE DATE OF HEARING DUE TO CHANGE IN ADDRESS OF THE CHARTERE D ACCOUNTANT ITA NO. 227/AHD/20 [RAMESH MAVJI PATEL VS. ITO] A.Y. 2011-12 - 4 - SITUATED IN INDIA. FOR SUCH AVERMENT, A REFERENCE WAS MADE TO THE ELECTRICITY BILL OF THE CHARTERED ACCOUNTANT SHOWIN G CHANGE IN ADDRESS. THE BONAFIDES OF THE ASSESSEE WAS FURTHER SUPPORTED FROM THE FACT THAT INVESTMENT OF RS.4,50,000/- WAS MADE OUT OF THE REGULAR BANK ACCOUNT MAINTAINED BY THE ASSESSEE AND IS FULLY EXPLAINABLE. IT IS ALSO POINTED OUT THAT SIMILAR P REMIUMS WERE PAID CONCERNING AY 2012-13 AND 2014-15 ALSO WHERE IN SIM ILAR FACTS, THE REGULAR ASSESSMENT WAS CARRIED OUT WITHOUT ANY ADDI TIONS. 7. ON WEIGHING THE CIRCUMSTANCES NARRATED ABOVE, WE ARE CONVINCED WITH THE REASONING GIVEN ON BEHALF OF THE ASSESSEE FOR FAILURE TO ATTEND BEFORE THE LOWER AUTHORITIES. TH E EXPLANATION OFFERED CARRIES THE ELEMENT OF BONAFIDES. THE ASSE SSEE CARRIES THE ADDRESS OF CORRESPONDENCE OF UNITED KINGDOM WHICH A PPEARS TO HAVE UNDERGONE A CHANGE. THE PAYMENT MADE IS SHOWN TO BE OUT OF BANKING CHANNEL. THE OPPORTUNITIES GIVEN BY THE CI T(A) CANNOT BE CONSIDERED TO BE EFFECTIVE OPPORTUNITY IN THE INSTA NT CASE WHERE THE APPEAL WAS DISMISSED ONLY BECAUSE OF NON-ATTENDANCE WITHOUT PERMISSION AT A SOLITARY INSTANCE. 8. IN THE TOTALITY OF CIRCUMSTANCES, WE CONSIDER IT JUST AND EXPEDIENT TO RESTORE THE MATTER BACK TO THE AO IN T HE INTEREST OF JUSTICE WITH A VIEW TO ENABLE THE ASSESSEE TO AVAIL PROPER OPPORTUNITY TO SUPPORT THE NATURE AND SOURCE OF INV ESTMENT IN QUESTION. NEEDLESS TO SAY, THE ASSESSEE SHALL EXTEN D FULL CO- OPERATION TO THE AO WITHOUT ANY DEMUR FAILING WHICH THE AO SHALL BE AT LIBERTY TO CONCLUDE THE ASSESSMENT IN ACCORDA NCE WITH LAW. HENCE THE ORDER OF THE CIT(A) APPEALED AGAINST, IS SET ASIDE AND THE GRIEVANCE RAISED IN THE IMPUGNED APPEAL ARE RESTORE D BACK TO THE FILE ITA NO. 227/AHD/20 [RAMESH MAVJI PATEL VS. ITO] A.Y. 2011-12 - 5 - OF THE AO FOR FRESH DETERMINATION IN ACCORDANCE WIT H LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 19/01/2021 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 19/01/20 21