Sheetal Shah, Mumbai V. ITO 17(3)(3) Mumbai, Mumbai

ITA 3402/MUM/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3820 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-02-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 25-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RYAN SALDHANA
• Keywords: Bogus purchase; Set aside
• Section: 147; 148; 271(1)(c); 144; 142(1); 143(1); 250; 274; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.3402/Mum./2023 (Assessment Year : 2009–10) Sheetal Shah Raj Sons, 3, Latif House 250, Sant Tukaram Road Carnac Bunder, Mumbai 400 020 PAN – ASEPS2196K ................ Appellant v/s Income Tax Officer Ward–17(3)(3), Mumbai ................ Respondent Assessee by : Shri Ryan Saldhana Revenue by : Shri Manoj Kumar Singh Date of Hearing – 14/02/2024 Date of Order – 19/02/2024 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 21/08/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2009–10. 2. In its appeal, the assessee has raised the following grounds:– “1. On the facts and circumstances of the case and in law, the Id NFAC erred in not granting an opportunity of hearing to the appellant. The appellant craves that the matter be set aside to the NFAC for hearing afresh. Sheetal Shah ITA no.3402/Mum./2023 Page | 2 2. On the facts and circumstances of the case and in law, the Id NFAC erred in confirming the penalty levied by the Id Assessing Officer of Rs 27,37,130/- despite the fact that penalty cannot be levied on bogus purchases disallowed on estimate basis of 12.5% of the purchases. 3. On the facts and circumstances of the case and in law, the Id NFAC erred in confirming the penalty levied by the ld Assessing Officer in respect of purchases of Rs 76.09 lakhs allegedly made from ISK Trading Company Pvt Ltd despite the fact that such purchases were never debited to the Profit and Loss account. 4. The appellant craves leave to add, alter or amend any ground of appeal at the time of hearing or before.” 3. The brief facts of the case are that the assessee is an individual and for the year under consideration filed her return of income on 30/09/2009 declaring a total income of Rs. 8,95,690. The return filed by the assessee was processed under section 143(1) of the Act. Subsequently, on the basis of the information received from DGIT(Inv.), Mumbai that the assessee is the beneficiary of bogus sales bills, proceedings under section 147 of the Act were initiated and notice under section 148 was issued on 01/03/2014. However, there was no reply from the assessee to the aforesaid notice. Even in respect of notices issued under section 143(2) as well as section 142(1) of the Act, the assessee did not file any details/submissions. Accordingly, the Assessing Officer (“AO”) proceeded to conclude the assessment under section 144 of the Act on the basis of material available on record. As per the information received from DGIT(Inv.), Mumbai, the assessee obtained bogus purchase bills aggregating to Rs. 80,52,750. Since the assessee failed to provide any details regarding the purchases and sales, the AO treated the purchase of Rs. 80,52,750 as non-genuine and added the same to the total income of the assessee. Sheetal Shah ITA no.3402/Mum./2023 Page | 3 4. Meanwhile, the penalty proceedings vide notice dated 26/03/2015 issued under section 274 r/w section 271(1)(c) of the Act were initiated. In the absence of any evidence to show that income was not concealed, the penalty of Rs. 27,37,130 was levied vide order dated 29/03/2017 passed under section 271(1)(c) of the Act. 5. In the appeal before the learned CIT(A), despite notices being issued, no reply/submission was filed on behalf of the assessee. Accordingly, vide impugned ex–parte order dated 21/08/2023, the learned CIT(A) dismissed the appeal filed by the assessee. Being aggrieved, the assessee is in appeal before us. 6. We have considered the submissions of both sides and perused the material available on record. It is evident that the learned CIT(A) has passed the order ex-parte due to the non-appearance of/on behalf of the assessee. During the hearing, the learned AR furnished the affidavit of the assessee, wherein it is submitted that all the notices for the hearing were sent by the learned CIT(A) on assessee’s email account. However, the assessee does not regularly access her email ID and also does not have access to the Income Tax website. It is further submitted that the assessee was under the impression that her Chartered Accountant was appearing before the learned CIT(A) and is attending to the appellate proceedings. Accordingly, it is prayed that the assessee is a layman and not aware of the technical formalities, therefore non-appearance was not attributable to any deliberate default. Sheetal Shah ITA no.3402/Mum./2023 Page | 4 7. Now in appeal before us, the assessee is duly represented by the learned AR and wishes to pursue the litigation against the penalty levied by the AO. The learned AR further submitted that he is the new Chartered Accountant of the assessee and will now be looking after the income tax cases of the assessee. In view of the above, we are of the considered opinion that in the interest of justice, the assessee be hereby granted one more opportunity to represent its case on merits before the learned CIT(A). Consequently, we deem it fit and proper to restore the matter to the file of the learned CIT(A) for de novo adjudication of the appeal on merits after consideration of all the details/submissions as may be filed by the assessee. Needless to mention no order shall be passed without affording reasonable opportunity of hearing to the parties. Further, the assessee is directed to appear before the learned CIT(A) on all the dates of hearing as may be fixed without any default. As the matter is being restored to the file of the learned CIT(A) for adjudication on merits, the other grievances raised by the assessee in the present appeal do not call for adjudication at this stage. Accordingly, grounds raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 19/02/2024 Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 19/02/2024 Sheetal Shah ITA no.3402/Mum./2023 Page | 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai