D K Mehta (HUF), Umbergaon V. The Income Tax Officer, Ward 2, Vapi

ITA 310/SRT/2022

AI Insights

The case involves two separate appeals by different assessees, Kaushikbhai Jitendrabhai Patel and D.K. Mehta (HUF), against the orders of the National Faceless Appeal Centre (NFAC)/Commissioner of Income Tax (Appeals). Both appeals were consolidated due to the similarity in the grounds raised, which pertained to the ex-parte orders passed by the CIT(A)/NFAC. The main issues revolved around the additions made under Section 68 of the Income Tax Act concerning unsecured loans and unexplained cash deposits. The Tribunal found that the assessee was not given adequate opportunities to present their case, leading to the decision to remand the matter back to the assessing officer for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301552 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-01-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 19-10-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Opportunity of being heard; Rule of consistency
• Section: 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH (SMC), SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 260/Srt/2022 (Assessment Year: 2015-16) (Virtual hearing) Kaushikbhai Jitendrabhai Patel, Amin Falia, Zadeshwar, Bharuch-392011. PAN No. AXLPP 0562 G Vs. I.T.O.,Ward 1(4), Bharuch. Appellant/ assessee Respondent/ revenue ITA No. 310/Srt/2022 (Assessment Year: 2016-17) D.K. Mehta (HUF), 11, At Post Solsumba, Gangadevi Road, Umbergaon Road, Umbergaon-396165, Gujarat. PAN No. AAGDH 4494 R Vs. I.T.O.,Ward-2, Vapi. Appellant/ assessee Respondent/ revenue Appellant represented by Shri Sakar Sharma, CA Respondent represented by Shri Vinod Kumar, Sr. DR Date of hearing 03/01/2023 Date of pronouncement 03/01/2023 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 National Faceless Appeal Centre, Delhi (in short, the NFAC)/learned Commissioner of Income Tax (Appeals) (in short, the ld. CIT(A) dated 29/06/2022 and 12/09/2022 for the Assessment years (AY) 2015-16 and 2016-17 respectively. In both these appeals, the assessee(s) has raised one common grounds of appeal which relates to passing ex- prty order by ld CIT(A)/NFAC, therefore, both these appeals were clubbed, ITA No.260 & 310/Srt/2022 Kaushikbhai Jitendrabhai Patel Vs ITO & 1 Anr 2 heard together and are being decided by this consolidated order. For appreciation of facts, the appeal in ITA No. 310/Srt/2022 for the A.Y. 2016-17 is treated as a “lead case”. In this appeal, the assessee has raised following grounds of appeal: “1. The ld. CIT(A)-NFAC erred on facts and in law in deciding appeal ex parte without adjudicating the appeal on the grounds raised in For, No. 35 in terms of Section 250(6) of the Income Tax Act, 1961. 2. The ld. CIT(A)-NFAC erred on facts and in law in confirming addition of Rs. 28,00,000/- by treating the unsecured loans received during the year by invoking provisions of Section 68 from whom loans had also been obtained in earlier years genuineness of which has not been disputed and ignoring the statement of facts wherein appellant stated that all necessary evidences in support of receipt of loans had been furnished in the course of assessment proceedings. 3. The ld. CIT(A)-NFAC erred on facts and in law in confirming the addition of Rs. 21,70,000/- by treating cash deposits in Axis Bank accounts to be unexplained income of the appellant without appreciating the explanation of appellant that cash deposits were made out of the cash withdrawals made from the bank accounts held by the appellant as stated in statement of facts.” 2. At the outset of hearing, Ld. Authorized Representative (Ld.AR) for the assessee submits that Ld. CIT(A) passed the impugned ex parte order without giving fair and reasonable opportunities of hearing to the assessee. The Ld. CIT(A) in para-4 of impugned order has recorded that despite giving final opportunity no compliance was made on the part of assessee. The Ld. CIT(A) finally 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 no notice was served on the assessee through email provided in Form-35 (Appeal form before ld CIT-A). The Ld. AR for the assessee further submits that even the Assessing Officer made addition under section 68 of Rs. 28.00 lakhs ITA No.260 & 310/Srt/2022 Kaushikbhai Jitendrabhai Patel Vs ITO & 1 Anr 3 and unexplained investment of Rs. 21.70 lakhs by taking view that the assessee filed to provide complete details. Both the lower authorities have not given fair and reasonable opportunities of hearing to the assessee. The Ld. AR for the assessee further submits that matter may be restored back to the file of Ld. CIT(A) for adjudicating the issue afresh in accordance with law. 3. On the other hand, the ld. Sr. DR for the revenue supported the order of ld. CIT(A) and would submits 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 absence of written submission of any evidence the ld CIT(A) has no option except to decide the appeal on the basis of material available on record. 4. I have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Senior Departmental Representative (ld. Sr. DR) for the revenue 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 17.12.2018 made addition under section 68 of Rs. 28.00 lakhs and unexplained investment of Rs. 21.70 lakhs by taking view that the assessee filed to provide complete details. The ld CIT(A)/ NFAC dismissed the appeal of assessee by holding ITA No.260 & 310/Srt/2022 Kaushikbhai Jitendrabhai Patel Vs ITO & 1 Anr 4 that the notice to the assessee was served through email provided by the assessee but no response was received. The ld CIT(A) dismissed the appeal of the assessee without adjudicating the issues on merit and as per the mandate of section 250(6) of Income-tax Act. I find that substantial right of the assessee is involved in the present appeal. The assessee in statement of fact narrated in Form-35. In such statement of fact the assessee clearly stated that he was given only one effective day for making compliance of notice issued by assessing officer. Even such facts are not considered by ld CIT(A) while dismissing the appeal. 5. Therefore, considering the facts of the present case and the submissions of parties, the grounds of appeal raised by the assessee are restored back to the file of assessing officer to adjudicate all the issues afresh, after giving fair and reasonable opportunity of being heard. The assessee is also directed to file all the required documents as desired by the assessing officer. The assessee is also directed to not to take adjournment without any valid reason. In the result, the grounds of appeal raised by assessee are allowed for statistical purpose. 6. In the result, the appeal of assessee is allowed for statistical purposes only. ITA No. 260/Srt/2022 by Kaushikbhai Jitendrabhai Patel 7. As recorded earlier the assessee has raised one ground of appeal as raised in appeal in ITA No. 310/Srt/2022 for A.Y. 2016-17, except nature of ITA No.260 & 310/Srt/2022 Kaushikbhai Jitendrabhai Patel Vs ITO & 1 Anr 5 addition. Considering the fact that I have restored the appeal back to the file of assessing officer for fresh adjudication of all the issues on merit, therefore, considering the principle of consistency, the appeal of ITA No. 260/Srt/2022 for the A.Y. 2015-16 is also restored back to the assessing officer with similar direction. In the result, this appeal is also allowed for statistical purposes. 8. In the final result, both these appeals of the assessee(s) are allowed for statistical purposes only. Order pronounced in the open court on 3 rd January, 2023. Sd/- (PAWAN SINGH) JUDICIAL MEMBER Surat, Dated: 03 /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