Shreeji Trading Co., Vadodara V. Income Tax Officer, Ward-3(1)(4), Vadodara

ITA 275/AHD/2022

AI Insights

The case involves Shreeji Trading Co., which appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the assessment year 2017-18. The primary contention was the failure of the Assessing Officer (A.O.) to serve a notice under Section 142(1) in a timely manner, rendering the assessment void ab initio. Additionally, the A.O. added Rs. 19,49,500 as unexplained money under Section 69A of the IT Act, which the assessee contested. The CIT(A) dismissed the appeal, leading to the current appeal before the Tribunal. The Tribunal noted procedural lapses in serving notices due to the dissolution of the partnership firm and change of address, which were not communicated to the department. Consequently, the Tribunal decided to remand the case back to the CIT(A) for a thorough re-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299963 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 26-04-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 06-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 271(1)(c); 144; 142(1); 69A; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . No .2 75 /A h d / 20 22 ( A s se ss m e nt Y e a r : 20 17- 18 ) Sh r e ej i T r ad in g C o . 5, G a u r av S oc , Pa n ig a t e, V ad od a r a V s . I T O War d - 3 ( 1) ( 4 ) , V a do da r a [ P AN N o. A A GF S 1 78 7A ] (Appellant) .. (Respondent) Appellant by : Shri Darshan Gandhi, A.R. Respondent by: Shri R. R. Makwana, Sr. D.R. D a t e of H ea r i ng 27.04.2023 D a t e of P r o no u n ce me nt 03.05.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi on 31.03.2022 for A.Y. 2017-18. 2. The grounds of appeal raised by the assessee are as under: “Your appellant being dissatisfied with the order dated 10.12.2019 passed by Ld. A.O. presents this appeal on the following grounds. Ld. A.O. has failed to serve the notice u/s 142(1) in the timely manner. Thus, the assessment made without service of notice in timely manner is void-ab-initio. Moreover, Ld. A.O. has added Rs. 19,49,500/- as unexplained Money U/s 69A of the IT Act without considering the submission made during assessment proceedings and facts of this case. The Ld. A.O. has both erred in facts and in law. To the extent of above, the order of the Learned Assessing Officer is bad in law and is prayed to be quashed. The ld AO also erroneously directed charging of interest under ss 234A/. 234B/ 234C/ 234D without application of mind. ITA No. 275/Ahd/2022 Shreeji Trading Co. vs. ITO Asst.Year–2017-18 - 2 - The ld AO also erroneously initiated penalty proceedings under s. 271(1)(c) as there is neither concealment nor any inaccurate particulars have been furnished. It be so held now. The order passed by the ld. AO is illegal, invalid, against the principles of natural justice and bad in law. The same be so held now.” 3. The assessee did not file his return of income and the case was selected under Section 144 for scrutiny assessment. Notice under Section 142(1) was issued to the assessee on 25.01.2018, but the assessee did not file his return of income. The Assessing Officer observed that on going through bank account statement of the assessee it was found that there are cash deposits of Rs. 19,09,500/- on various dates of Financial Year 2016-17 and therefore, the show-cause notice was issued which was not replied by the assessee. Therefore, Assessing Officer passed order under Section 144 thereby making addition of Rs. 19,49,500/- and treated the same as deemed income of the assessee for A.Y. 2017-18. 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. There is a delay of 18 days in filing the appeal before the Tribunal for which the assessee has filed the condonation of delay application alongwith affidavit thereby stating that the concerned tax consultant was approached belatedly and the same was not deliberate but a mistake on assessee’s part. The reason for delay appears to be genuine, hence the delay is condoned. ITA No. 275/Ahd/2022 Shreeji Trading Co. vs. ITO Asst.Year–2017-18 - 3 - 6. The Ld. A.R. submitted that the assessee’s address was changed and as the assessee firm was dissolved on 06.10.2008 and therefore, the notice under Section 144, 142(1) was not received by the assessee as well as the notice before the CIT(A) was also not received by the assessee. The Ld. A.R. submitted that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the matter after giving opportunity of hearing to the assessee and allowing the assessee to file the necessary evidences in support of his case. 7. The Ld. D.R. submitted that ample opportunity was granted to the assessee but the assessee choose not to appear before the CIT(A) as well as before the AO. The Ld. D.R. further submitted that the change of address and dissolution of partnership firm was not informed by the assessee. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 8. Heard both the parties and perused all the relevant material available on record. Since there was a dispute in partners and the dissolution of the partnership firm was October 2008 the change of address was not intimated to the department. But this cannot be treated as a deliberate act on part of the firm. The CIT(A) should be given more opportunity to the assessee for contesting the matter on merit. Therefore, in the interest of justice it will be appropriate to remand back this matter to the file of the CIT(A) for proper adjudication of the issues contested therein and pass the appropriate order as per law. Needless to say the ITA No. 275/Ahd/2022 Shreeji Trading Co. vs. ITO Asst.Year–2017-18 - 4 - assessee be given opportunity of hearing by following principles of natural justice. 9. In the result, the appeal of the assessee is partly allowed for statistical purpose. This Order pronounced in Open Court on 03/05/2023 Sd Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 03/05/2023 TANMAY, Sr. PS TRUE COPY आदेश आदेशआदेश आदेश क क क क ितिलिप ितिलिप ितिलिप ितिलिप अ ेिषत अ ेिषतअ ेिषत अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबंिधत आयकर आयु / Concerned CIT 4. आयकर आयु (अपील) / The CIT(A)- 5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार आदेशानुसारआदेशानुसार आदेशानुसार/ BY ORDER, उप उपउप उप/सहायक सहायकसहायक सहायक पंजीकार पंजीकारपंजीकार पंजीकार (Dy./Asstt.Registrar) आयकर आयकरआयकर आयकर अपीलीय अपीलीयअपीलीय अपीलीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad