Shri Raj Dipakkumar Patel L/h of late Dipakkumar M.Patel, Ahmedabad V. The Income tax Officer,Ward-11(4), Ahmedabad

ITA 3147/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6539 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 26-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SOORYAWANSHIDR
• Assessee Lawyers: R K MOTWANI
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence; Set aside
• Section: 142(1); 143(1); 143(2); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI T K SHARMA,JM & SHRI A N PAHUJA,AM ITA NO.3147/AHD/2010 (ASSESSMENT YEAR:-2007-08) RAJ DIPAKKUMAR PATEL L/H OF LATE SHRI DIPAKKLMAR M PATEL, PROP. SAI MARKETING, J-102, GHANTAKARAN MARKET, NR. NEW CLOTH MARKET, SARANGPUR, AHMEDABAD V/S INCOME-TAX OFFICER, WARD- 11(4), AHMEDABAD PAN: AGMPP 7015 N [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI R K MOTWANI, AR REVENUE BY:- SHRI G S SOORYAWANSHI,DR O R D E R A N PAHUJA: THIS APPEAL FILED BY THE ASSESSEE AGAINST AN ORDER DATED 11-10-2010 OF THE LD. CIT(APPEALS)-XVI, AHMED ABAD, FOR THE ASSESSMENT YEAR 2007-08, RAISES THE FOLLOWING GROU NDS:- 1. THE HON'BLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN D ECIDING THE APPEAL EX-PARTE ON 11-10-2010 CONFIRMING THE ASSESSMENT ORDER PASSED U/S. 144 OF THE ACT BY THE LD. ASSESSING OFFICER AS TH E APPELLANT WAS DIED ON 18-07-2010 JUST BEFORE 3 MONTHS DUE TO SEVERE ACCIDENT. 2. THE L/H OF THE APPELLANT IS VERY SMALL AND JUST HE I S BECOMING MAJOR AND HE DOES NOT KNOW THE INCOME TAX PROCEEDINGS AND THE IR CONSEQUENCES. THE TWO NOTICES FOR HEARING WERE RECEIVED IN THE MONTH OF SEPTEMBER 2010 BUT HE WAS UNDER THE DEPRESSIO N DUE TO SAD DEMISE OF HIS FATHER AND SO HE COULD NOT COMPLIED TH E SAME. THEREFORE, THERE IS NO NATURAL JUSTICE IN THE ACTION OF THE HON'BLE CIT(A). 3. THE APPELLANT HAD GOT ALL THE EVIDENCES OF THE CRED IT ENTRIES IN THE SAVING BANK ACCOUNT MAINTAINED IN STANDARD CHARTERED B ANK, AHMEDABAD. AT THE TIME OF ASSESSMENT PROCEEDINGS, THE APP ELLANT WAS OUT OF STATION AND SO HE COULD NOT HANDEDOVER THE E VIDENCES TO HIS C.A. AND AT THE APPEAL STAGE THE APPELLANT WAS DIE D AND HIS L/H 2 ITA NO.3147/AHD/2010 2 IS SO SMALL AND HE IS VERY MUCH IN SHOCKED DUE TO LOST OF BEL OVED FATHER, COULD NOT ATTENDED THE OFFICE OF THE HON'BLE CIT(A). 4. IT IS THEREFORE PRAYED THAT THE ADDITIONAL EVIDENCE S MAY KINDLY BE ALLOWED TO PRODUCE BEFORE THE HON'BLE TRIBUNAL AND I T IS HUMBLY PRAYED THAT BOTH THE ADDITIONS, VIZ ALLEGED ADDITION O N ACCOUNT OF INCOME FROM UNDISCLOSED SOURCE OF RS.8,06,314/- AND ALLEGE D ADDITION ON ACCOUNT OF UNEXPLAINED CHEQUE DEPOSITED IN B ANK AND BANK INTEREST OF RS.1,26,001/-, (CREDIT ENTRIES OF RS.1 ,25,911/- + INTEREST RS.90/-) MAY KINDLY BE DIRECTED TO DELETE. 5. THE APPELLANT CRAVES LEAVE TO AMEND, ALTER OR DELET E ANY OF THE ABOVE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HE ARING. 2 ADVERTING FIRST TO GROUND NOS.1 TO 4 IN THE APPE AL, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLA RING INCOME OF RS.97,925/- FILED ON 31-03-2008 BY THE ASSESSEE, AF TER BEING PROCESSED ON 21-08-2008 U/S 143(1) OF THE INCOME-TA X ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT], WAS SELECTE D FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ON 24 -09-2008. SUBSEQUENTLY, A NOTICE U/S 142(1) OF THE ACT FOR T HE HEARING ON 10- 06-2006 WAS SERVED ON THE ASSESSEE ON 4-06-2009. HO WEVER, NONE ATTENDED. IN RESPONSE TO ANOTHER NOTICE DATED 23-07 -2009 U/S 142(1) OF THE ACT FOR THE HEARING ON 03-08-2009, THE AR OF THE ASSESSEE SUBMITTED THE DETAILS IN PART. THE AR WAS ,INTER AL IA, ASKED TO SUBMIT COPY OF THE BANK STATEMENT OF SAVING BANK ACCOUNT W ITH THE STANDARD CHARTERED BANK. HE WAS ALSO ASKED TO SUBMI T THE SOURCE OF CASH DEPOSITED IN THE SB ACCOUNT AS PER THE AIR INFORMATION AND THE CASE WAS ADJOURNED TO 10-08-2009,WHEN SHRI GAUT AM MEHTA, C.A. SUBMITTED A COPY OF THE BANK STATEMENT OF STAN DARD CHARTERED BANK A/C NO. 233-1-006430-3. SINCE THE SOURCE OF C ASH DEPOSITED IN THE BANK WAS NOT EXPLAINED, THE CASE WAS ADJOURN ED TO 09-09- 2009. ON 09-09-2009 NOBODY ATTENDED. A FURTHER NOTI CE U/S 142(1) DATED 14-10-2009 FOR THE HEARING ON 26-10-2009 WENT UNRESPONDED AS ALSO THE NOTICE ISSUED ON 10-12-2009 FOR THE HE ARING ON 16-12- 2009. ACCORDINGLY, ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT AND AN AMOUNT OF 8,06,314/-[31,46,314-23,40,000] ON ACCOUNT OF 3 ITA NO.3147/AHD/2010 3 UNEXPLAINED CASH DEPOSITED IN THE BANK AND RS.1,25, 911/- ON ACCOUNT OF UNEXPLAINED CREDIT IN THE SAID BANK ACCO UNT WERE ADDED. 3. ON APPEAL, NONE APPEARED BEFORE THE THE LEAR NED CIT(A) DESPITE NOTICE DATED 2.8.2010 ,18.8.2010 & 9.9.2010 .CONSEQUENTLY, THE LD. CIT(A) UPHELD THE ACTION OF THE AO IN COMPL ETING THE ASSESSMENT U/S 144 OF THE ACT AS ALSO THE ADDITIONS OF AN AMOUNT OF 8,06,314/- ON ACCOUNT OF UNEXPLAINED CASH AND RS.1, 25,911/- ON ACCOUNT OF UNEXPLAINED CREDIT IN THE BANK . 4. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). AT THE OUTSET, THE LEARNED AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE SHRI DIPA KKUMAR MANUBHAI PATEL EXPIRED ON 18-07-2010 DUE TO SEVERE ACCIDENT AND THE LEGAL HEIR OF THE ASSESSEE BEING UNAWARE OF THE INCOME-TA X PROCEEDINGS AND THEIR CONSEQUENCES, THE TWO NOTICES FOR HEARING IN THE MONTH OF SEPTEMBER 2010 COULD NOT BE COMPLIED WITH NOR EVEN THE LEGAL HEIRS WERE BROUGHT ON RECORD. INTER ALIA, A COPY OF DEATH CERTIFICATE OF SHRI DIPAKBHAI M PATEL & AFFIDAVIT NARRATING THE CIRCUMSTANCE S HAVE ALSO BEEN FILED. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IM PUGNED ORDER . 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. THERE IS NOTHING TO SUGGEST THAT ANY ATTE MPT WAS MADE ON BEHALF OF THE ASSESSEE FOR SUBSTITUTION OF LEGAL HE IRS DURING THE PENDENCY OF APPEAL BEFORE THE LD. CIT(A). WE FIND T HAT DUE TO UNTIMELY DEATH OF SHRI DIPAKBHAI M PATEL ON 18-07- 2010 AND CONSEQUENT DEPRESSION OF LEGAL HEIR SHRI RAJ DIPAKKUMAR PATEL , NO NE APPEARED BEFORE THE LD. CIT(A).SINCE NO ATTEMPT WAS MADE BEFORE THE LD. CIT( A) FOR SUBSTITUTION OF THE LEGAL HEIRS , THE LD. CIT(A) DISPOSED OF THE APPEAL EXPARTE ON 11.10.2010 . APPARENTLY, AN IRREGULARITY HAS BEEN COMMITTED FOR WANT OF SUBSTITUTION OF LEGAL HEIRS AND CONSEQUENT NON-SERVICE OF NOTICE ON THOSE LEGAL HEIRS IN THE APPEAL PROCEEDINGS. THE LACK OF NOTICE TO THE LEGAL HEIRS DOES NOT AMOUNT TO TH E REVENUE AUTHORITY HAVING NO JURISDICTION, AND THE PROCEEDINGS DO NOT CEASE TO BE A 4 ITA NO.3147/AHD/2010 4 PROCEEDING UNDER THE ACT MERELY BY REASON OF WANT OF N OTICE TO THE LEGAL HEIRS. IN VIEW OF THE FOREGOING, WITHOUT GOING IN TO THE MERI TS OF THE APPEAL, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD . CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR ALLOWING THE ASSESSEE TO SUBSTITUT E LEGAL HEIRS .THEREAFTER , THE LD. CIT(A) SHALL DECIDE THE MATTER AFRESH IN ACCOR DANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES I.E THE AO AND THE LEGAL HEIRS SO SUBSTITUTED. NEEDLESS TO SAY THAT WHILE REDECIDING THE AP PEAL, THE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6) OF THE ACT. WITH THESE OBSERVATIONS, AP PEAL IS DISPOSED OF AS INDICATED HEREINBEFORE. 6. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE U S IN TERMS OF RESIDUARY GROUND NO. 5 IN THE APPEAL, ACCORDINGLY, THIS GROUND IS DISMISSED. 7. IN THE RESULT, APPEAL IS ALLOWED AS INDICATED AB OVE FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 3-06-2011 SD/- SD/- ( T K SHARMA ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 3 -06-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI RAJ DIPAKKUMAR PATEL L/H OF LATE SHRI DIPAK KUMAR M PATEL, PROP. SAI MARKETING, L/H, J-102, GHANTAKARAN MARKET, NR. NEW CLOTH MARKET, SARANGPUR, AHMEDABAD 2. ITO, WARD-11(4), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XVI, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD