Shri Maulik G. Patel, Ahmedabad V. The Income Tax Officer, Ward-3(2)(10), Ahmedabad

ITA 462/AHD/2023

AI Insights

The case involves Shri Maulik G. Patel, who was accused of making unexplained investments amounting to Rs. 10,00,000 in M/s Jaidev Trading, which was allegedly run by Mr. Nazirbhai Karimbhai Sheikh, an entry provider. The Income Tax Officer reopened the case under Section 147 of the Income Tax Act, 1961, and made additions under Section 69 as unexplained investments. The CIT(A) upheld this decision. The Tribunal found that the assessee had adequately responded to the notices and provided evidence that contradicted the claims of the lower authorities. The Tribunal noted the failure of the lower authorities to provide the necessary documents and evidence to the assessee, which constituted a violation of the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129096 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 30-08-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 04-06-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAVIK KHANDHEDIYA
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence; Reason to believe
• Section: 147; 69; 148; 144; 142(1); 250; 143(2)

Judgement Text

ITA No. 462/Ahd/2023 Shri Maulik G Patel Vs. ITO Assessment Years: 2012-13 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD \ BEFORE Ms. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No. 462/Ahd/2023 Assessment Year: 2012-13 Shri Maulik G. Patel, 37, Chandraprabha Society, Nr. GebansaDargah, Isanpur, Ahmedabad PAN : BQZPP 0773 P Vs Income Tax Officer, Ward-3(2)(10), Ahmedabad अपीलाथ / (Appellant) यथ / (Respondent) Assessee by : Shri Bhavik Khandhediya, AR Revenue by : Ms. Saumya Pandey Jain, Sr DR सुनवाई की तारीख/Da te of Hear ing : 31/ 08/2 023 घोषणा की तारीख /Date of Pro noun ce men t : 13/1 0/20 23 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "CIT(A)" for short] dated 13.02.2023 passed under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short] for the Assessment Year (AY) 2012-13. 2. The grounds raised by the assessee in its appeal read as under:- “A. LEGAL GROUNDS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE 1. Because the Ld. CIT(A) erred in law in sustaining the additions made in the assessment order by Ld. Assessing officer by overlooking the facts of the case thereby denying the assessee a right of Impartial hearing of the case and consequential failure to pass a speaking order, thereby violating the principle of natural justice. 2. Because the Ld. CIT(A) erred in law by failing to take into consideration additional evidences produced before him in terms of Rule 46A of the Act, notwithstanding the fact that additional evidences go to the very root of the matter. ITA No. 462/Ahd/2023 Shri Maulik G Patel Vs. ITO Assessment Years: 2012-13 Page 2 of 4 3. Because the lower authorities erred in law by not supplying the copies of chits, bank statement extracts of search party etc. on the basis of which the lower authorities formed "reason to believe" to re-open this case in terms of section 147 of the Act; thereby, again denying the principle of natural justice by not affording the opportunity to the assessee to rebute the same. B. FACTUAL GROUNDS: 4. Without prejudice to the above, the Ld. CIT(A) erred in law and on facts by upholding the addition of Rs. 10,00,000/- without apprehending correct facts on record. C. GENERAL: 5. Assessee reserves rights to add / alter or amend any ground(s) of appeal till the finalization of this appeal.” 3. As per the information received from ADIT (Inv.) Bhavnagar vide letter dated 19.03.2019, the assessee has carried out transaction of Rs. 10,00,000/- with M/s Jaidev Trading Prop. Shri Nazirbhai Karimbhai Sheikh being entry provider. The assessee has not filed any return of income, therefore, the case of the assessee was reopened u/s 147 of the Act with prior approval of the Pr. CIT. Accordingly, notice u/s 148 was issued on 31.03.2019 and served upon the assessee. In response to the said notice assessee filed return of income on 04.10.2019 declaring total income of Rs. 96,000/-. The reasons for re-opening was provided to the assessee. Notice u/s 143(2) and 142(1) were issued on various dates, but the assessee has not replied the same. Therefore, the Assessing Officer passed assessment order u/s 144 r.w.s. 147 of the Act, thereby making addition of Rs. 10,96,000/- under Section 69 as unexplained investment. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the assessee filed additional ground thereby submitted that the CIT(A) erred in upholding the assessment order under Section 144 of the Act, notwithstanding the fact that the assessment has been framed by the Assessing Officer in a very arbitrary manner without following the due provisions of Section 144 of the Act. On merit, the Ld. AR submitted that the assessee is a salaried employee and never known any person named Mr. Nazirbhai Karimbhai Sheikh or ITA No. 462/Ahd/2023 Shri Maulik G Patel Vs. ITO Assessment Years: 2012-13 Page 3 of 4 his proprietary concern – M/s. Jaidev Trading. In fact, the bank account which was mentioned by the Revenue was not provided and the assessee has provided his bank statement from 01.04.2011 to 31.03.2011 maintained at Kotak Mahindra Bank. The Ld. AR submitted that the amount made as addition by the Assessing Officer is not there in assessee’s account and the income received by the assessee as salary which is disclosed in response to the notice u/s 148 while filing return of income cannot be termed as unexplained investment u/s 69 of the Act. 6. The Ld. DR relied upon the assessment order and order of the CIT(A). 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has filed return of income in response to notice u/s 148 of the Act as well as the reply to the assessment proceedings. The Assessing Officer was not right in observing that the assessee is non-co-operating. But the additional ground taken by the Assessee does not have footing as the assessee has not file any documentary evidence before the Assessing Officer. Thus, additional ground does not sustain. As regards to merits of the case it is pertinent to note that the assessee before the CIT(A) has given the details of the salary earned from its employer and the bank statement maintained by him which clearly shows that he never made any investment in M/s Jaidev Trading. The information received by the Revenue was also not confronted and shown to the assessee. The affidavit and the subsequent evidence shows that assessee is not aware about the person Mr. Nazirbhai Karimbhai Sheikh. Thus, the addition made by the Assessing Officer and confirmed by the CIT(A) is not justifiable. 8. In result, appeal of the assessee is partly allowed. Order pronounced in the open Court on this 13 th day of October, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 13 th day of October, 2023 Bt* ITA No. 462/Ahd/2023 Shri Maulik G Patel Vs. ITO Assessment Years: 2012-13 Page 4 of 4 Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad 1. Date of dictation: .... Words processed by Hon’ble JM on her laptop...11.10.2023 2. Date of dictation: .... Words processed by Hon’ble JM on her laptop...12.10.2023 3. Date on which the typed draft is placed before the Dictating Member: ...12.10.2023.... 4. Date on which the approved draft comes to the Sr. P.S./P.S.: ...12.10.2023.... 5. Date on which the fair order is placed before the Dictating Member for Pronouncement: ......13.10.2023..................... 6. Date on which the file goes to the Bench Clerk : ......13.10.2023............. 7. Date on which the file goes to the Head Clerk : .................................. 8. The date on which the file goes to the Assistant Registrar for signature on the order: ...... 9. Date of Despatch of the Order: ........................