Late Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi), Jamnagar V. The ITO Ward-1 (3), Jamnagar, Jamnagar

ITA 264/RJT/2022

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3378 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 11-03-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Reassessment proceedings
• Section: 145; 148; 142(1); 264

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH VIRTUAL COURT] Before: Ms. Suchitra Kamble, Judicial Member And Shri Waseem Ahmed, Accountant Member Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi), Ashok Sadan, Near Town Hall, Jamnagar- 361004 PAN: ACDPD9371Q (Appellant) Vs The ITO, Ward-1(3), Jamnagar (Respondent) Assessee by: Shri Dushyant Maharshi, A.R. Revenue by: Shri Shramdeep Sinha, CIT-D.R. Date of hearing : 12-03-2024 Date of pronouncement : 15-03-2024 आदेश/ORDER PER : SUCHITRA KAMBLE, JUDICIAL MEMBER:- These two appeals filed against the order dated 14-09- 2022 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment years 2009-10 and 2010-11. ITA Nos. 264 & 265/Rjt/2022 Assessment Years 2009-10 & 2010-11 I.T.A Nos. 264 & 265/Rjt/2022 A.Y. 2009-10 & 2010-11 Page No Late Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi vs. ITO 2 2. The grounds of appeals are as under:- ITA No. 264/Rjt/2022 A.Y. 2009-10 “All the below mentioned grounds of appeal are independent and without prejudices to each other. 1. Re-opening u/s 148 of The IT Act is bad in law as there was no reason to believe' and there is no new material coming to the possession of Assessing Officer as Reopening was merely based upon information received from ADIT (Investigation). 2. The notice issued u/s 148 of the IT Act is improper and without jurisdiction as it is issued by obtaining sanction of Pr. CIT as per section 151 of the IT Act in mechanical manner and therefore, notice issued u/s 148 is invalid and reassessment proceedings are liable to be quashed. 3. Ld. A.O. erred in law as well as on facts in making addition of total of credits appearing in bank accounts amounting to Rs. 11,14,31,597/- as unaccounted income. 4. Ld. A.O. erred in not considering the "Peak Theory" for making addition of amounts credited in bank account of appellant and made addition of whole amount credited Appellant craves leave to add, amend or withdraw any ground of appeal.” ITA No. 265/Rjt/2022 A.Y. 2010-11 “All the below mentioned grounds of appeal are independent and without prejudices to each other. 1. Re-opening u/h 147 of the Act is not valid as the copy of the reasons have not been provided by the M. AD within I.T.A Nos. 264 & 265/Rjt/2022 A.Y. 2009-10 & 2010-11 Page No Late Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi vs. ITO 3 30 days of the filing of the return by the assessee as per directions issued by the Hon'ble Gujarat High Court in the case of Sahkari Khand Udyog Madal Ltd. (SCA. No. 3955 of 2014) 2. Re-opening u/s 145 of The IT Act is bad in law as there was no reason to believe' and there is no new material coming to the possession of Assessing Officer as Reopening was merely based upon information received from ADIT (Investigation). 3. The notice issued u/s 145 of the IT Act is improper and without jurisdiction as it is issued by obtaining sanction of Pr. CIT as per section 151 of the IT Act in mechanical manner and therefore, notice issued u/s 148 is invalid and reassessment proceedings are liable to be quashed. 4. Ld. A.O. erred in law as well as on facts in making addition of total of credits appearing in bank accounts amounting to Rs. 12,14,31,842/-as unaccounted income. 5. Ld. A.O. erred in not considering the "Peak Theory" for making addition of amounts credited in bank account of appellant and made addition of whole amount credited. Appellant craves leave to add, amend or withdraw any ground of appeal.” 3. The assessee was engaged in the business of financial commission running proprietor concern in the name of M/s. Abhi Enterprise. The assessee passed away on 12-11-2010. Return of income was filed for assessment year 2009-10 by his legal heir on 01-08-2011 declaring total income of Rs. I.T.A Nos. 264 & 265/Rjt/2022 A.Y. 2009-10 & 2010-11 Page No Late Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi vs. ITO 4 2,34,060/-. Assessment proceedings u/s. 147 of the Income Tax Act, 1964 was initiated and notice u/s. 148 of the Act was issued to the assessee on 21-03-2016. In response to the notice u/s. 148, the legal heir of the assessee filed return of income on 03-05-2016 declaring income of Rs. 2,34,060/- and requested to provide reasons recorded for reopening. Further, notice u/s. 142(1) r.w.s. 129 of the Act dated 21-08-2016 was issued upon the assessee and duly served. Reasons for reopening were completed on 09-11-2016 against which the assessee filed objection vide letter dated 16-11-2016 and the same was disposed of by the Assessing Officer vide order dated 25-11-2016. The Assessing Officer observed that the assessee has made cash and cheque deposit in bank accounts with the Jamnagar Peoples Co-operative Bank Ltd. and ICICI Bank Ltd. amounting to Rs. 22,39,10,489/-. The assessee filed his explanation which was taken into account by the Assessing Officer and the Assessing Officer made addition of Rs. 11,14,31,597/- 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The ld. A.R. submitted that the CIT(A) has not taken into account the contention of the assessee as well as passed the I.T.A Nos. 264 & 265/Rjt/2022 A.Y. 2009-10 & 2010-11 Page No Late Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi vs. ITO 5 ex-parte order without deciding anything on merit. Therefore, the ld. A.R. submitted that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issues contested therein. 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the CIT(A) has not stated out in his order whether the notice for hearing was served to the assessee or not. Besides this, the CIT(A) has not at all considered even the grounds as well as the statement of facts submitted by the assessee to Form No. 35 which is appeal folder before the CIT(A), therefore, it will be appropriate to remand back this matter to the file of CIT(A) for proper adjudication of the issues contested by the assessee in the appeal before the CIT(A) on merit after considering the legal aspects as well the factual aspect of assessee’s case. The CIT(A) is directed to adjudicate all the issues as per income tax statutes. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. The facts of the second appeal i.e. for assessment year 2010-11 are identical and therefore the same direction is given in ITA 265/Rjt/2022 as well. I.T.A Nos. 264 & 265/Rjt/2022 A.Y. 2009-10 & 2010-11 Page No Late Chhotalal Vallabhdas Doshi (Legal Heir Smt. Prabhavatiben Chhotalal Doshi vs. ITO 6 8. In the result, both the appeals of the assessee are partly allowed for statistical purposes. Order pronounced in the open court on 15-03-2024 Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 15/03/2024 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot