BIMLADEVI TOSHNIWAL, MUMBAI V. ITO -31(1)(3), MUMBAI

ITA 441/MUM/2023

AI Insights

The case involves M/s. Bimladevi Toshniwal, who appealed against the orders of the National Faceless Appeal Centre (NFAC) for the assessment years 2013-14 and 2014-15. The primary contention was regarding the incorrect determination of total income and wrongful additions under sections 68 and 69C of the Income Tax Act, 1961. The Assessing Officer had made significant additions to the assessee's income based on information about accommodation entries for Long Term Capital Gain (LTCG). The CIT(A) dismissed the appeals for want of prosecution, leading to the current appeals before the Tribunal. The Tribunal decided to remit the case back to the CIT(A) for a decision on merits, emphasizing the need for a fair hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301122 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 14-02-2023
• Other Referred Cases: Commissioner of Income-tax (Central) Nagpur vs. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MISS. KIRAN VADHER; ISSUING NOTICE THROUGH ITBANFACFAPL
• Keywords: Question of law; Accommodation entries
• Section: 147; 68; 148; 69C; 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “B”, MUMBAI BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA Nos. 441 & 454/M/2023 Assessment Years: 2013-14 & 2014-15 M/s. Bimladevi Toshniwal, 1702-B, Anmol Towers, S.V. Road, Near Kamar Club, Goregaon (w), Mumbai- 400 069 PAN: AAAPT7416K Vs. Income Tax Officer- 31(1)(3), C- 41 to C-43, Kautilya Bhavan, BKC, Bandra(E), Mumbai- 400 051 (Appellant) (Respondent) Present for: Assessee by : Shri Pramod Kumar Parida, A.R. & Miss. Kiran Vadher, A.R. Revenue by : Shri Ashok Kumar Ambastha, Sr. AR. Date of Hearing : 24 . 08 . 2023 Date of Pronouncement : 24 . 08 . 2023 O R D E R Per : Kuldip Singh, Judicial Member: Since common question of law and facts have been raised in both the inter-connected appeals, the same are being disposed of by way of composite order to avoid repetition of discussion. 2. The appellant, M/s. Bimladevi Toshniwal (hereinafter referred to as ‘the assessee’) by filing the present appeals, sought to set aside the impugned order dated 08.12.2022 & 13.12.2022 for M/s. Bimladevi Toshniwal ITA Nos.441 & 454/M/2023 2 the assessment years 2013-14 & 2014-15 respectively passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] on identically worded grounds except the difference in figures (for the sake of brevity grounds are taken from ITA No.441/M/2023 for A.Y. 2013-14) inter-alia that :- “1) The learned Commissioner of Income-tax (Appeals)-NFAC, Delhi failed to appreciate that the assessing officer erred in determining the total income of your appellant amounts to Rs.1,41,50,350/- instead of Rs.39,600/-. 2) The Commissioner of Income-tax (Appeals) - NFAC, Delhi failed to appreciate that the learned assessing officer has wrongly added a sum of Rs.1,34,57,007/- being sale proceeds of shares of 2 companies under section 68 of the IT Act, 1961. 3) The Commissioner of Income-tax (Appeals) - NFAC, Delhi failed to appreciate that the learned assessing officer has wrongly added a sum of Rs.6,53,737/- being commission on arranging LTCG at the rate of 5 percentage on Rs.1,30,74,749/- LTCG claimed by your appellant under section 69C of the IT Act, 1961. 4) Your appellant reserves the right to add, amend delete or alter any or all the above ground of appeal each of which without prejudice to the order.” 3. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : the return of income filed by the assessee declaring total income at Rs.4,42,680/- was processed under section 143(1) of the Income Tax Act, 1961 (for short ‘the Act’). Subsequently on the basis of information received from Principal Director of Income Tax (Investigation), Kolkata that a large scale accommodation entries by the entry providers in penny stock for Long Term Capital Gain (LTCG) to the interested parties are being provided to the number of beneficiaries and assessee is one of such beneficiaries. Proceedings under section 147 & 148 of the Act were initiated. Assessing Officer (AO) noticed that the M/s. Bimladevi Toshniwal ITA Nos.441 & 454/M/2023 3 assessee has purchased 2,00,000 shares of Rutron International Ltd. on 05.12.2011 by way of preferential allotment from the company and sold 1708420 shares from 16.04.2013 to 28.01.2014 in financial year 2013-14 by rigging the price. The assessee sold the aforesaid shares for Rs.2,70,58,758/- and claimed LTCG of Rs.2,53,50,339/-. The assessee also claimed Short Term Capital Loss (STCL) of Rs.26,74,263/-. Declining the contentions raised by the assessee the AO proceeded to make the addition of Rs.3,99,52,528/- under section 68 of the Act, addition of Rs.19,02,204/- being the commission income for arranging LTCG under section 69C of the Act and thereby framed the assessment under section 143(3) read with section 147 of the Act. 4. The assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the addition by dismissing the appeal for want of non prosecution on the part of the assessee. Feeling aggrieved with the impugned order passed by the Ld. CIT(A) the assessee has come up before the Tribunal by way of filing present appeals. 5. We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto. 6. Bare perusal of the impugned order passed by the Ld. CIT(A) goes to show that the Ld. CIT(A) has decided the present appeals ex-parte at the back of the assessee for want of prosecution without touching the merits of the case. In para 4.1 of the impugned order M/s. Bimladevi Toshniwal ITA Nos.441 & 454/M/2023 4 five opportunities are reported to have been given to the assessee by issuing notice through ITBA/NFAC/F/APL_1/2019- 20/1025568505(1) system but stated to have not complied with by the assessee. On the other hand, the Ld. A.R. for the assessee contended that she has not received any notice. It may be due to the fact that the system has been changed from physical hearing to faceless hearing. To impart the justice and to decide the issue once for all on merits case is required to be remitted back to the Ld. CIT(A) to decide afresh after providing opportunity of being heard to the assessee. Even otherwise in view of the decision rendered by Hon’ble Bombay High Court in case of Commissioner of Income-tax (Central) Nagpur vs. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) the Ld. CIT(A) is required to decide the appeal even if the assessee is ex-parte, on merits and he is not empowered to dismiss the appeal for want of prosecution by the assessee. 7. In view of what has been discussed above the aforesaid appeals filed by the assessee are allowed for statistical purposes, to be decided by the Ld. CIT(A) afresh after providing opportunity of being heard to the assessee. Order pronounced in the open court on 24.08.2023. Sd/- Sd/- (GAGAN GOYAL ) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 24.08.2023. * Kishore, Sr. P.S. M/s. Bimladevi Toshniwal ITA Nos.441 & 454/M/2023 5 Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.