Sangeeta Bhatia, Jaipur V. The DCIT, Circle-1 Jaipur

ITA 422/JPR/2022

AI Insights

The case involves Smt. Sangeeta Bhatia, the proprietor of M/s. Jaipur Traders, who appealed against the order of the ld. CIT(A) dated 07-10-2022 for the assessment year 2012-13. The primary grievances included the passing of an ex-parte order without proper consideration of an adjournment request and the re-opening of the assessment under section 147 of the Income Tax Act based on information from DDIT(Inv.) Panipat regarding bogus bills. The assessee contested the additions made to her income, which were based on alleged accommodation entries and without proper establishment of nexus or opportunity for cross-examination. The Tribunal noted procedural lapses in handling the adjournment request and the need for a fair hearing, leading to the decision to remand the case back to the CIT(A).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132487 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 14-02-2023
• Assessment Year: misc
• Appeal Filed On: 04-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Opportunity of being heard; Principle of natural justice; Accommodation entries
• Section: 147; 44AD

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR JhlaanhixkslkbZ]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 422/JP/2022 fu/kZkj.ko"kZ@Assessment Year :2012-13 Smt. Sangeeta Bhatia Prop. M/s. Jaipur Traders 394l, Maniharon Ka Rasta, Tripolia Jaipur cuke Vs. The DCIT Circle-1 Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABLPB 8185 B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Manish Agarwal , CA jktLo dh vksj ls@Revenue by: Mrs. Monisha Choudhary, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 15/02/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/03/2023 vkns'k@ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 07-10-2022, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2012-13 wherein the assessee has raised the following solitary ground of appeal. ‘’1. On the facts and in the circumstances of the case and in law, Id.CIT(A) has grossly erred, in passing order ex parte on 07.10.2022, even though assessee had requested for adjournment on line on 23.09.2022 upto 8.10.2022. Appellant prays that order passed by Id.CIT(A) without rejecting such adjournment request 2 ITA NO.422-2022 SMT. SANGEETA BHATIA VS DCIT, CIRCLE-1, JAIPUR and without intimating it to assessee of rejection, if any, is against the principles of natural justice and deserves to be quashed. 2. On facts and in the circumstances of the case Id.CIT(A) has grossly erred in confirming the action of Id.AO in re-opening the assessment of the assessee, arbitrarily u/s 147 of the Act, solely on the basis of some information received from DDIT(Inv.) Panipat that Shri Dinesh Jain (prop. M/s Adieshwar Traders) had accepted on oath in statements recorded, that his proprietary concern was engaged in providing accommodation entries in the form of bogus bills. Appellant prays such re-assessment initiated merely on the basis of information received from some other official, without independent application of mind by ld.AO and on borrowed satisfaction, deserves to be held bad-in-law, and the consequent order deserves to be quashed; 2.1 That the Ld. CIT(A) has further erred in confirming the re opening the assessment without recording any subjective belief as to escapement of income, who had merely acted upon suspicion formed on the basis of so-called information received from some other officials, by completely ignoring the prerequisite condition for re-opening of assessment which can be done only on the basis of subjective belief of escapement of income and that suspicion cannot take the place of belief. Thus, the impugned reassessment order deserves to be held bad in law and consequent additions deserves to be deleted. Without prejudice to above on merits 3. On facts and in circumstances of case Id CIT(A) has grossly erred in confirming the addition of Rs. 15,87,200/- made by Id. AO by alleging purchases made from M/s Adieshwar Traders as being accommodation entry taken by assessee without disturbing the sales declared, and further without establishing any nexus between the information so received and genuine purchases made by assessee. Thus the addition so confirmed deserves to be deleted. 3.1 That the Id.CIT(A) has further erred in confirming the addition merely on presumptions and assumptions, without any contrary material on records, despite the fact that the assessee had filed full details regarding purchases and sales made along with complete stock register showing complete quantitative details, and audited books. Appellant thus prays that such addition made merely on surmises deserve to be deleted. 3.2 That the Id.CIT(A) has grossly erred in confirming the addition made by Id.AO, solely on the basis of information received from DDIT(Inv) Panipat and statements said to have been recorded of some person by some officials in some 3 ITA NO.422-2022 SMT. SANGEETA BHATIA VS DCIT, CIRCLE-1, JAIPUR other case and behind the back of assessee, which were not confronted to the assessee, thus not providing any opportunity to the assessee to cross-examine the person. Hence the addition made merely on the basis of presumptions and assumptions deserves to be deleted. 4. On facts and in the circumstances, Id. CIT(A) has grossly erred in confirming the lumpsum addition of Rs. 2,00,000/- out of expenses claimed in profit and loss a/c, arbitrarily without pointing any specific expense as being excessive, and without appreciating the fact that the books of the assessee were audited u/s 44AD of the Act, wherein no adverse remark was made. Appellant prays that the addition made thus deserve to be deleted.’’ 2.1 At the outset of the hearing, the main thrust of the ld. AR of the assessee is that the ld. CIT(A) has passed the ex-parte order without considering the request made by the assessee for adjournment of the case till 8-10-2022. 2.2 On the other hand, the ld. DR supported the order of the ld. CIT(A) 2.3 We have heard both the parties and perused the materials available on record. In this case, we noticed that the order passed by ld. CIT(A) is ex-parte order dated 7-10-2022. In this regard, the ld. AR of the assessee submitted that the ld. CIT(A) has grossly erred in passing the impugned ex-parte on 17-10-2022 even though the assessee had requested for adjournment online on 23-09-2022 upto 8-10-2022 but the ld CIT(A) without rejecting said adjournment request and without intimating to the assessee had passed the impugned ex-parte order (supra) which is against the principles of natural justice which deserves to be quashed. However, from the records, we noticed that several opportunities were given to the 4 ITA NO.422-2022 SMT. SANGEETA BHATIA VS DCIT, CIRCLE-1, JAIPUR assessee through various notices/ communications through ITBA Portal i.e. on 31- 12-2020, 30-08-2022, 13-09-2022 and 23-09-2022 and in our view it was an obligation on the part of the assessee to cooperate the Department and pursue his appeal. In this case, although the assessee has taken a specific stand that the assessee had requested for adjournment upto 8-10-2022 through online on 23-09- 2022 but the matter was decided ex-parte on 7-10-2022 by the ld. CIT(A) . In this context, we may point out that seeking adjournment for a particular period is not the substantive right of the party rather it is the discretion of the authority based on the papers put forth for seeking adjournment. At the same time, we also noticed that the ld. CIT(A) had nowhere communicated the rejection of adjournment request of the assessee which in our view was the obligation on the part of the Revenue Authority to intimate the assessee regarding rejection of his adjournment request. In view of the above deliberation, the Bench feels that it will be in the interest of equity and justice to restore the matter to the file of the ld. CIT(A) to decide it afresh by providing adequate opportunity of being heard to the assessee. 2.4 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld.CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(A) independently in accordance with law. 5 ITA NO.422-2022 SMT. SANGEETA BHATIA VS DCIT, CIRCLE-1, JAIPUR 3.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28 /03/2023. Sd/- Sd/- ¼jkBksMdeys'kt;UrHkkbZ ½ ¼lanhi xkslkbZ½ (Rathod Kamlesh Jayantbhai) (Sandeep Gosain) ys[kklnL;@Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/03/2023 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Smt. Sangeeta Bhatia, Jaipur 2. izR;FkhZ@ The Respondent- The DCIT, Circle-1, Jaipur 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No. 422/JP/2022) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar