Govindbhai Bhavandas Patel, HUF, Ahmedabad V. The Income Tax Officer, Ward-4(2)(2), Ahmedabad

ITA 443/AHD/2022

AI Insights

The case involves Govindbhai Bhavandas Patel, HUF, who appealed against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed exparte assessments and penalties for the Assessment Years 2010-11 & 2011-12 under various sections of the Income Tax Act, 1961. The assessments were based on unexplained cash deposits in bank accounts, and penalties were levied for non-compliance with statutory notices. The Tribunal found that the assessee was not properly served with notices due to an address change and had not responded adequately during the appellate proceedings. The Tribunal decided to set aside the orders and remand the case for a fresh assessment, emphasizing the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114113 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-07-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 17-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Principle of natural justice; Reasonable cause; Set aside
• Section: 148; 271(1)(c); 250; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Govindbhai Bhavandas Patel, HUF B/7/302, Shrifal Appartment, Vandematram Road, Gota, Ahmedabad-382481 PAN: AAFHG1579K (Appellant) Vs The Income Tax Officer, Ward-4(2)(2), Ahmedabad (Respondent) Assessee Represented: Shri P.D. Shah, A.R. Revenue Represented: Ms. Saumya Pandey Jain, Sr.D.R. Date of hearing : 24-07-2023 Date of pronouncement : 26-07-2023 आदेश/ORDER PER BENCH:- These eight appeals are filed by the Assessee as against the separate orders all dated 21.09.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “NFAC”) as against the exparte orders passed u/s. 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and confirmation of Penalties levied under sections ITA Nos: 443 to 450/Ahd/2022 Assessment Years: 2010-11 & 2011-12 I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 2 271(1)(c), 271(1)(b) and 271F of the Act relating to the Assessment Years 2010-11 & 2011-12 respectively. 2. The brief facts of the case is that the assessee is Karta of HUF has not filed the Return of Income for the Assessment Years 2010-11 & 2011-12. As per the AIR information in respect of the assessee on the ITD system, the assessee had made cash deposits in bank accounts Rs. 21,50,000/- and Rs. 2.13 crores during the Financial Year 2009- 10 & 2010-11, however not filed the Return of Income. Therefore the assessment was reopened by issuing notice u/s. 148 on 31.03.2017 for the above Assessment Years requiring the assessee to file the return within 30 days of receipt of the notices. 2.1. The assessee has not responded to the above notices, therefore a reminder was issued on 08-09-2017 requesting the assessee to file the Return of Income within seven days, the assessee again not responded. However the last opportunity vide letter dated 02-11-2017 was issued to the assessee, to file the Returns on or before 08-11- 2017 failing which penalty proceedings will also be initiated u/s. 271(1)(b) of the Act. The assessee neither complied with the final notice nor filed the Return of Income or any submissions in response to the above notices. Therefore the Assessing Officer left with no other alternative but to pass a Best Judgment Assessment order u/s. 144 of the Act thereby added the cash deposits of Rs.21,50,021/- as the unexplained income of the assessee relating to the Assessment Year 2010-11 and Rs.2,13,49,297/- as the income of the assessee for the Assessment Year 2011-12. The Assessing Officer also initiated penalty proceedings u/s. 271(1)(c) for concealment of income, u/s. I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 3 271(1)(b) for not responding to the statutory notices issued u/s. 142(1) of the Act and u/s. 271F penalty for not filing the Return of Income u/s. 139(1) of the Act. During the penalty proceedings also, the assessee has not responded to the notices issued by the Assessing Officer thereby the Assessing Officer levied penalty u/s. 271(1)(c), u/s. 271(1)(b) and u/s. 271F of the Act respectively. 3. During the recovery proceedings initiated by the Assessing Officer, the assessee came to know about the exparte assessment orders and penalty orders passed by the Assessing officer since the assessee had moved out from the house address being C-104, Green Villa, Ahmedabad in the year 2010 itself by selling the above property. It is thereafter the assessee collected the assessment orders and penalty orders from the Assessing Officer vide letter dated 25-10-2019 and thereafter filed the quantum appeals for the Assessment Years 2009- 10 & 2011-12 with a delay of 658 days and penalty appeals with a delay of 477 days, 511 days and 512 days respectively. 3.1. The Ld. CIT(A) on considering reasonable cause adduced by the assessee condoned the delay in filing the above appeals. During the Faceless Appellate proceedings, the assessee was required to furnish written submissions electronically on 24-11-2021, 02-12-2021 and 05-01-2022. The assessee requested for a Video Conference hearing on 12-01-2022 whereby Video Conferencing was given on 15-07-2022 then on 03-08-2022 at 12 P.M. During the Video Conferencing hearing, the Authorized Representative did not file his Power of Attorney since the assessee was in USA. Further on merits, the Ld. A.R. could not produce any bank details and no explanations on the I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 4 cash deposits made in the bank account. Even in the written submissions filed by the assessee, the assessee sought for adjournments on the ground that bank accounts details are yet to be collected by the assessee. In the absence of any details on the cash deposits made by the assessee in spite of various opportunities including Video Conference hearing given to the assessee and the assessee failed to furnish the required details, thereby the Ld. NFAC dismissed all the appeals filed by the assessee. 4. Aggrieved against the same, the assessee is in appeal before us filing a Paper Book consisting of three documents namely (i) IDBI Bank Account statement for the period 01.04.2008 to 31.03.2011. (ii) USA Visa dated 21-10-2014 (passport copy) and (iii) Sale Deed (in Gujarati) dated 20-10-2011 sale of C-104, Green Villa Apartment, Ahmedabad. 4.1. The Ld. Counsel submitted that the assessee sold his residential property namely C-104, Green Villa, Apartment by sale deed dated 20-10-2011 but the notice u/s. 148 and other notices were issued only to the above old address of the assessee. Further the assessee was away from India to USA for certain period. Thus the assessee was not served with the above notices which has resulted in exparte assessment and consequential levy of penalties u/s. 271(1)(c), 271(1)(b) and 271F of the Act. The above assessments were made exparte because the assessee could not furnish the bank account details and explain the cash deposits made by the assessee. Therefore requested to set aside the exparte assessment orders and penalty I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 5 orders to the file of the Assessing Officer by giving one more opportunity to the assessee to explain its case in the Interest of Natural Justice. 5. Per contra, the Ld. Sr. D.R. Ms. Saumya Pandey Jain appearing for the Revenue supported the order passed by the Lower Authorities. The Ld. D.R. brought to our notice, though exparte assessment orders were passed by the Assessing Officer, during the appellate proceedings, adequate opportunities were given to the assessee by condoning the extraordinary delay of 658 days to 477 days. However the assessee could not produce any details before the Appellate Authority in spite of adequate opportunities given to the assessee. This clearly shows that the assessee is not interested in pursuing the appeals with appropriate material evidences, therefore the appellate orders passed by the Ld. NFAC does not require any interference and assessee’s appeals are liable to be dismissed. 6. We have given our thoughtful consideration and perused the materials available on record. It is seen from the Paper Book filed by the assessee, the two bank statements by IDBI Bank account was dated 16-03-2023 taken print out at 11:14:51 and dated 20-04-2023 taken print out at 12:51:46 hours. The same were not filed before any of the lower authorities. Similarly, the passport entry which is carrying USA Visa permit and Sale Deed dated 20-10-2011 of sale of the residential house at Green Villa, Apartment are also not filed by the assessee before any of the lower authorities. It is seen from the appellate order that NFAC was pleased to accept the reasons given by the assessee namely the service of notices to the old address of the I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 6 assessee on sale of his residential property on 20-10-2011 itself and condoned the substantial delay in filing the appeals. Further as stated before the Appellate Authorities, the assessee could not file the relevant details/cash deposits since he was away from India. To meet the ends of Principle of Natural Justice, we think it fit to set aside the cases back to the file of the Assessing Officer to consider the cash deposits made in the bank account of the assessee. But on going through the appeal folders, it is noticed that only one Letter of Authority dated 31.08.2022 that too with a Court Fees Stamp of Rs.2/- only affixed in favour of Chartered Accountant Shri Prakash D. Shah. This Power of Attorney is authorized by the assessee to appear before the Income Tax Authorities for any proceeding u/s. 250 of the Income Tax Act. Primarily, this Power of Attorney is invalid since the appropriate Stamp of Rs. 300/- to be affixed in any Letter of Authority or Power of Attorney in favour of Chartered Accountant. Therefore these appeals were listed for clarification on 13-07-2023, due to paucity of time, the appeals were again adjourned to 24-07- 2023. Today Ld. Counsel filed eight Power of Attorney for each appeal with proper Stamping of Rs. 300/- and authorizing him to appear before this Tribunal and the same are taken on record. 6.1. It is seen from the Assessment orders and Penalty orders that statutory notices were issued to the assessee in the last known address available with the Department namely C-104, Green Villa Appartment, Opp. Gurukul Tenamets, Nr. Auda Garden, Ghatlodia, Ahmedabad-380061 (Gujarat) and the assessee failed to inform the change of address to the department. However vide assessee’s letter dated 14-10-2019, he requested the Income Tax Officer, Ward-4(2)(2), I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 7 Ahmedabad to provide copies of the Assessment orders and Penalty orders. The ITO vide its letter dated 15-10-2019 furnished the copies to the assessee observing as follows: “3. In this connection, it is to inform you that order u/s. 144 r.w.s 147 of the Act for A.Ys. 2010-11 & 2011-12 dated 21/12/2017 has already been sent through Speed Post vide EG No. 072509901IN and EG No. 072510017IN and penalty orders u/s. 271F of the Act vide Speed Post EG028461651IN, penalty orders u/s. 271(1)(b) of the IT Act, 1961 dated 29/05/2018 vide Speed Post EG028461651IN and penalty order u/s. 271(1)(c) of the I.T Act, 1961 dated 26/06/2018 vide Speed Post EG028462095IN 4. However, as per your request, kindly find enclosed herewith copies of above orders for A.Ys. 2010-11 & 2011-12.” 6.2. With these copies of the Assessment orders and Penalty orders, the assessee filed appeals before Ld. CIT(A) with delay of 658 days to 477 days which were condoned, however the assessee was given hearing opportunities on 29-01-2021, 10-02-2021, 10-03-2021, 30- 11-2021, 27-01-2022, 15-07-2022, 03-08-2022 and finally on 17-08- 2022 for Video Conference hearing to submit details submissions and documentary evidences. As there was no submissions received by Ld. NFAC on 17-08-2022, final show cause notice was issued on 02-09- 2022 fixing the case for hearing on 19-09-2022. Again the assessee sought for an adjournment which was rejected by the NFAC and with available materials on record and non-cooperation of the assessee, Ld. NFAC confirmed the additions made by the Assessing Officer. 6.3. It is clear from the record of the Lower Authorities, the assesse was not cooperative with the Department in filing his Return of Income and not responding to the notices issued to the last known address of the assessee. Thus the assessee unnecessarily wasted the precious time of the quasi-judicial and first appellate authorities. Therefore it is in the interest of Principle of Natural Justice, we I.T.A Nos. 443 to 450/Ahd/2022 A.Ys. 2010-11 & 2011-12 Page No Govindbhai B. Patel, HUF vs. ITO 8 hereby impose a consolidated cost of Rs. 50,000/- (Rupees Fifty Thousand only) payable by the assessee to the Prime Minister National Relief Fund within two weeks of receipt of this order copy, thereby we set aside the assessment and penalty orders passed by the Lower Authorities and remit the cases back to the file of the Assessing Officer to decide the cases on merits. The assessee is directed to produce copy of the Receipt of Rs. 50,000/- paid towards Prime Minister National Relief Fund before the Assessing Officer and then file all the relevant materials before the Assessing Officer to adjudicate the case on merits for both Assessment Years 2010-11 & 2011-12. It is open to the A.O. to proceed with the Penalty proceedings in accordance with law. 7. With these directions, the appeals filed by the Assessee are allowed for statistical purposes. Order pronounced in the open court on 26-07-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 26/07/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद