Payal Niravkumar Shah, Ahmedabad V. The Income Tax Officer, Ward-2(2)(4), Ahmedabad

ITA 271/AHD/2022

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 4794 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-11-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Sham transactions; Set aside
• Section: 148; 144; 142(1); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Payal Niravkumar Shah 301, Sujay Apartments Naranpura Char Rasta, Ahmedabad-380013 PAN: BGXPS1307L (Appellant) Vs The ITO, Ward-2(2)(4), Ahmedabad (Respondent) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, A.R. Revenue Represented: Ms. Saumya Pandey Jain, Sr. D.R. Date of hearing : 22-11-2023 Date of pronouncement : 06-12-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the appellate order dated 12.04.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the exparte assessment order passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2012-13. ITA No. 271/Ahd/2022 Assessment Year 2012-13 I.T.A No. 271/Ahd/2022 A.Y. 2012-13 Page No Payal Niravkumar Shah vs. ITO 2 2. The Registry has noted that there is a delay of 24 days in filing the above appeal. The assessee filed an Affidavit explaining that there is miscommunication between his Chartered Accountant and her Advocate in filing the above appeal. Ld. Sr. D.R. has no objection in condoning the delay of 24 days in filing the above appeal. Thus we hereby condone the delay in filing the above appeal and taken up the appeal for hearing. 3. The brief facts of the case is that the assessee is an individual and homemaker. The Assessing Officer received information from Deputy Director of Income Tax, Mumbai that the assessee has made investment in share transactions in penny stock scrip M/s. Exelon Infrastructure Ltd. to the tune of Rs. 8,10,000/-, however the assessee has not filed her Return of Income for the Assessment Year 2012-13. Therefore the assessment was reopened by issuing a notice u/s. 148 of the I.T. Act on 27.03.2019. In response, the assessee has not filed any return and also not complied with the various notices issued and served on the assessee u/s. 142(1) of the Act. Therefore the Assessing Officer completed exparte assessment by making additions on investment in Exelon Infrastructure, VMS Industries and Diamant Infrastructure Ltd. amounting to Rs. 52,63,219/- as income u/s. 69A of the Act and demanded tax thereon. 4. Aggrieved against the same, the assessee filed an appeal before Commissioner of Income Tax (Appeals)/NFAC. During the appellate proceedings, the assessee filed written submission dated 16.11.2021 and 07.04.222 explaining that the shares of VMS I.T.A No. 271/Ahd/2022 A.Y. 2012-13 Page No Payal Niravkumar Shah vs. ITO 3 Industries were purchased for Rs. 2,29,057/- and sold the same for Rs. 2,32,263/-. Thus there is a profit of Rs. 3,206/-, which is an “intra-day transaction” and there is no question of any investment. But the Assessing Officer has noted that there is an investment of Rs. 42,21,404/- without any basis. Regarding the investment in shares of Excelon Infrastructure Ltd., the assessee relying upon MTM Summary Statement of broker SPS for the period from 01.04.2011 to 31.03.2012. The assessee earned a profit of Rs. 11,621/- in this transaction but in the end of the year, she incurred a loss of Rs. 4,38,209/-. 4.1. Similarly in the case of Diamant Infrastructure Ltd., the assessee incurred a short term capital loss of Rs. 2,83,296/-. Without considering the above, the assessing officer made an addition of Rs. 52,63,219/- and also produced MTM Summery Statement from the broker, relevant contract note-cum-bills. However the same were not considered by the Ld. CIT(A) and confirmed the addition made by the Assessing Officer by observing as follows: “.....8. I have carefully considered the action of the Assessing Officer and the submissions of the appellant. I agree with the conclusion of the Assessing Officer that the transactions were sham transactions and aimed only to bring unaccounted money in the guise of capital gains and paperwork was done merely to give a colour of authenticity to the transaction by creating a façade of legitimate transactions. In view of the above, I do not find any need to interfere with the order of the Assessing Officer.” 5. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. The learned CIT(A) has erred in law and on the facts in confirming Ex-parte assessment order framed by the Assessing Officer u/s. 144 I.T.A No. 271/Ahd/2022 A.Y. 2012-13 Page No Payal Niravkumar Shah vs. ITO 4 of the Act. He further erred in not appreciating that notices could not be served upon the appellant as a result of change in address. 2. The learned CIT(A) has erred in law and on facts in passing an unreasoned and non-speaking order without dealing with any of the contentions raised in the written submission. Thus, Learned CIT(A)'s order is bad in law as it suffers from the vice of principals of natural justice. 3. The learned CIT(A) has erred in law and on facts in confirming an addition of Rs. 52,63,219/- u/s.69A of the Act. Learned CIT(A) further erred in not appreciating that the appellant being only a joint account holder where these credits are allegedly found. The first name in the said account was that of the husband of the appellant. 4. Learned CIT(A) has erred in law and on facts in invoking provisions of section 69A of the Act which is not at all applicable in the facts of the present case. He further erred in not appreciating that there is no income chargeable to tax in the case of the appellant. 5. Learned CIT(A) has erred in law and on facts in not granting an opportunity of video conference while disposing of the appeal in question. 6. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 7. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in charging interest u/s.234A/B/C/D of the Act. 8. The learned CIT(A) has erred in not considering various facts and in not appreciating the facts and law in their proper perspective. 9. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. I.T.A No. 271/Ahd/2022 A.Y. 2012-13 Page No Payal Niravkumar Shah vs. ITO 5 6. Heard rival submissions and perused the materials available on record. It is an undisputed fact that the assessee has not responded to the various notices issued by the Assessing Officer which has resulted in passing an exparte assessment order. During the Appellate proceedings, the assessee filed a detailed submissions dated 16.11.2021 and 07.04.2022 with relevant documents. However the same were not considered by the Ld. CIT(A) and confirmed the addition made by the Assessing Officer. We find that the Ld. CIT(A) has not made any verification of the documents filed before him nor called for a Remand Report from the Assessing Officer, but simply confirmed the addition made by the Assessing Officer, which in our considered opinion is against the Principles of Natural Justice. Therefore we deem it fit to set aside the matter back to the file of the Jurisdictional Assessing Officer (JAO) with a direction to look into the details filed by the assessee and pass the assessment in accordance with law by giving proper opportunity to the assessee. Needless to say, the assessee should cooperate with the JAO by submitting all the relevant documents for completing the assessment. 7. In the result, the appeal filed by the Assessee is allowed for statistical purpose. Order pronounced in the open court on 06-12-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 06/12/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- I.T.A No. 271/Ahd/2022 A.Y. 2012-13 Page No Payal Niravkumar Shah vs. ITO 6 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद