Shaileshbhai Jadavbhai Patel, Mehsana V. The ITO, Ward-5, Mehsana

ITA 467/AHD/2022

AI Insights

The case involves Shaileshbhai Jadavbhai Patel, the appellant, contesting an order from the CIT(A), National Faceless Appeal Centre, Delhi, which confirmed an assessment under Section 144 of the Income Tax Act, 1961, labeling an amount of Rs.21,03,600 as unexplained investment. The assessee argued that the order was passed ex-parte and violated principles of natural justice, as he was not given a proper opportunity to respond due to non-compliance by his tax consultant and the complexities of tax laws, exacerbated by the COVID-19 pandemic. The Tribunal noted procedural lapses in the handling of the case and the need for a detailed examination of the additional evidence provided by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129414 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 31-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 23-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence
• Section: 69; 148; 144

Judgement Text

ITA No.467/Ahd/2022 Assessment Year: 2011-12 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.467/Ahd/2022 Assessment Year: 2011-12 Shaileshbhai Jadavbhai Patel, vs. The Income Tax Officer, A-26, City Park Society, Ward – 5, Mehsana. Thol Road, Kadi, Mehsana – 382 715. [PAN – AZPPP 0787 P] (Appellant) (Respondent) Assessee by : Shri S.N. Divatia, AR Revenue by : Shri Ramesh Kumar, JCIT Date of hearing : 01.02.2023 Date of pronouncement : 15.02.2023 O R D E R This appeal is filed by the Assessee against order dated 15.06.2022 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2011-12. 2. The Assessee has raised the following ground of appeal :- “1. The order u/s.250 passed on 15.06.2022 by NFAC Delhi making ex- parte disposal of appeal whereby confirming assessment u/s.144 upholding amount of Rs.21,03,600/- as unexplained investment is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. NFAC has grievously erred in law and or on facts in not appreciating that there was sufficient cause in failure to make compliance with the alleged notices issued by them as explained on statement of facts herein above. Therefore, the impugned order has been passed in gross violation of principles of natural justice. 1.3 The Ld. NFAC has grievously erred in law and or on facts in not considering the explanation and evidence filed by the appellant during the physical hearings before CIT(A)-GNR prior to faceless appeal regime. 2.1 The Ld. NFAC has grievously erred in law and or on facts in upholding the addition of Rs.21,03,600/- being cash deposits with Corporation Bank as unexplained investment. ITA No.467/Ahd/2022 Assessment Year: 2011-12 Page 2 of 4 2.2 That in the facts and circumstances of the case as well as in law, the Ld. NFAC has grievously erred in upholding the addition of Rs.21,03,600/- being cash deposits with Corporation Bank as unexplained investment It is therefore prayed that the ex-parte order passed by NFAC and addition of Rs.21,03,600/- made by the AO should be deleted.” 3. The Assessing Officer had reason to believe that the assessee escaped the income for A.Y. 2011-12. Therefore, the case was reopened by way of issuing notice under Section 148 of the Income Tax Act, 1961 dated 30.03.2018. In response to the notice under Section 148 of the Act, no return of income was filed by the assessee. Hence, show-cause notice dated 26.02.2018 was issued to the assessee. Similarly, show-cause notices were issued on 26.07.2018 and 06.09.2018 but no reply or any document was filed by the assessee and, therefore, the Assessing Officer made addition of Rs.21,03,600/- under Section 69 of the Act as unexplained investment in his bank account. The assessment was passed under Section 144 r.w.s. 147 of the Act. 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 notices of hearing were received by the assessee and was handed over to the Tax Consultant Shri Kanubhai Patel to attend and comply with the same. Unfortunately, the said Tax Consultant did not attend any of the notices and when final notice was received, the assessee appeared before the Assessing Officer and filed his reply on 12.11.2018. The reply was in Gujarati and the same was self-explanatory. The Ld. AR submitted that the assessee was totally ignorant about the complicated tax laws and does not understand English. Therefore, the notices issued by the Assessing Officer as well as by CIT(A) were not responded. The Ld. AR submitted that the documentary evidences somehow was submitted before the CIT(A) but the same was not considered by the CIT(A)/NFAC. The Ld. AR submitted that the notices issued was during Corona Covid period and, therefore, the additional evidences filed by the assessee before the CIT(A) upon which the remand report was also submitted by the Assessing Officer should have been taken into account while deciding the appeal by the CIT(A). As relates to merits of the case, the Ld. AR submitted that the cash deposits were sales proceeds of the land at Village Nandoliya of which the assessee has given explanation that the assessee derived ITA No.467/Ahd/2022 Assessment Year: 2011-12 Page 3 of 4 income mainly from agricultural produce. In the present case, the land sold admittedly belonged to the Mother of the assessee who had executed the sale deed on 14.12.2010 which was inherited from her father. The capital gain arising on sale of this land was not taxable in her hand and the same was a distress sale inasmuch as the assessee required money for her medical treatment. Therefore, the Ld. AR submitted that the cash deposit was genuine deposit of sale proceeds of the land. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). Ld. DR submitted that ample opportunity was given by the Assessing Officer as well as by the CIT(A) but the assessee has not responded the same notices and, therefore, the addition may be confirmed. 7. Heard both the parties and perused all the relevant material available on record. From the perusal of the records, it is seen that the CIT(A)/NFAC has issued notices on 26.04.2021 which is seen on the portal and, therefore, ample opportunity was not given to the assessee for pleading his case before the Appellate Authority. From the perusal of remand report, the Assessing Officer has simplicitor stated that the evidences should not be accepted but has not commented on evidences independently. As such, it will be appropriate to remand back this issue to the file of the CIT(A) as the evidences filed was not taken into account by the CIT(A). Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice. 8. In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 15 th day of February, 2023. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 15 th day of February, 2023 PBN/* ITA No.467/Ahd/2022 Assessment Year: 2011-12 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 UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad