MOCHA TRADING PVT.LTD, Mumbai V. NATIONAL FACELESS APPEAL CENTRE (NFAC), Delhi

ITA 4685/MUM/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6514 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-05-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ PATEL
• Keywords: Unexplained cash credit; Principle of natural justice; Set aside
• Section: 68; 271(1)(c); 142(1); 234B; 143(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 4685/MUM/2023 (Assessment Year : 2012–13) Mocha Trading Pvt. Ltd. 53, Anand Bhavan, Banganga Road, Walkeshwar, Mumbai–400006 Vs. National Faceless Appeal Centre (NFAC) Delhi. PAN/GIR No. AAFCM7083B (Appellant) .. (Respondent) Assessee by Shri. Pankaj Patel Revenue by Smt. Sanyogita Nagpal (CIT DR) Date of Hearing 27/05/2024 Date of Pronouncement 13/06/2024 आदेश / O R D E R PER SUNIL KUMAR SINGH (J.M): 1. This appeal has been preferred against the impugned order dated 10.11.2023 passed in Appeal No. CIT(A), Mumbai–10/10707/2015–16 by the Ld. Commissioner of Income–tax(Appeals), National Faceless Appeal Centre(NFAC) [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income–tax Act, 1961 [hereinafter referred to as ITA no. 4685/MUM/2023 Mocha Trading Pvt. Ltd. 2 “Act”] for the Assessment year [A.Y.] 2012–13, wherein learned CIT(A) has dismissed assessee’s appeal and confirmed the addition of Rs. 2,25,07,200/– as an unexplained cash credit u/s. 68 of the Act made by Assessing Officer vide assessment order dated 31.03.2015. 2. The brief facts related to the appeal state that the assessee company is engaged in the business of dealing in hardware, fabrics and general items. Assessee filed return of income on 29.03.2013 declaring total income of Rs. 15,93,030/–. The return was processed u/s. 143(1) of the Act. The case was selected for scrutiny and notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. The representative of the assessee Shri Gopal Bhatter, CA attended the assessement proceedings and submitted required details. Assessing Officer found Rs. 2,25,07,200/– as an unexplained cash credit and added in the total income of the assessee u/s. 68 of the Act. Being aggrieved, assessee preferred an appeal before learned CIT(A) who dismissed assessee’s appeal for non prosecution. 3. The appellant assessee has approached this tribunal on the following grounds: “1. On the facts and circumstances of case and law, the Ld. CIT(A) erred in passing an ex parte order u/s 250 against the principles of natural justice. 2. On the facts and circumstances of case and in law, Ld CIT(A) erred in confirming the share premium amount Rs.2,25,07,200/- as unexplained cash credit u/s 68 on assumption that appellant cannot receive huge share premium. 3. On the facts and circumstances of case and in law, Ld. CIT(A) failed to consider that he has no jurisdictional power to make, addition on account of share premium ITA no. 4685/MUM/2023 Mocha Trading Pvt. Ltd. 3 amount as unexplained cash credit u/s 68 in hands of appellant as the proviso to section 68 is inserted vide Finance Act, 2012 w.e.f. 1.4.2013 i.e. applicable from A.Y 2013-14 and not in considering year. 4. On the facts and circumstances of case and in law Ld CIT(A) failed to appreciate that (a) Provision for taxing the share premium amount in hands of the pvt. Ltd. company is inserted in statute in section 56(2)(viib) & proviso to 68 vide Finance Act, 2012 which is effective from the 1/4/2013 i.e. Assessment year 2013 14. Hence, not applicable in considering year. (b) Department cannot guide the businessman from armchair of department that at what amount shares to be valued and issued. (c) Addition cannot be made on presumption basis. 5. On the facts and circumstances of case and in law Ld CIT(A) erred in charging interest u/s 234B and 234C of the income tax act 1961. 6. On the facts and circumstances of case and in law Ld CIT(A) erred in initiating penalty u/s 271(1)(c) of the income tax act 1961. 7. The appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.” 4. In response to the notice issued by the tribunal, learned DR appeared and participated in the proceedings. 5. Assessee moved an adjournment for 2 months to collect the required documents and information. The adjournment was rejected. 6. We have perused the records and heard learned representatives for both the parties in attendance. 7. At the very outset, learned representative for the assessee has submitted that learned CIT(A) has passed ex–parte impugned order on presumption without hearing the assessee in violation of the principles of natural justice. Prayed to set aside the impugned order passed by learned CIT(A). ITA no. 4685/MUM/2023 Mocha Trading Pvt. Ltd. 4 8. Learned DR for the revenue has submitted that the assessee did not respond despite repeated notices issued by learned CIT(A) and supported the impugned order. 9. Considering the submissions made before us, we find that the learned CIT(A) has issued notices on 18 occasions. Appellant assessee did not comply notices and also sought adjournments on some occasions. However, learned CIT(A), while dismissing the appeal has not discussed the merits of the case, whereas learned first appellate authority was expected to state the points for determination, the decision there on and the reasons for the decision as provided u/s. 250(6) of the Act. We are conscious of the fact that the assessee has not responded substantially before the first appellate authority in response to the various notices issued by it. However, in the interest of justice and fair play, we find it appropriate to remit the matter back to the file of learned CIT(A) for denovo adjudication on merit. We further direct the assessee to be diligent and cooperative in attending the hearings and making submissions before the first appellate authority for the expeditious and effective disposal of the ITA no. 4685/MUM/2023 Mocha Trading Pvt. Ltd. 5 appeal. Assessee should refrain from seeking any adjournment but for compelling and unavoidable reasons. Needless to say that learned CIT(A) shall ensure the observance of the principles of natural justice. It is made clear that we have not made any observation on the merits of the case. The appeal is liable to be allowed accordingly. 10. In the result, the appeal is allowed in above terms. The impugned order dated 10.11.2023 is set aside. The appeal is restored back to the file of the learned CIT(A) for statistical purposes. Order pronounced on 13.06.2024. Sd/– (PRASHANT MAHARISHI) Sd/– (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Date 13/06/2024 Anandi Nambi, Steno Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// ITA no. 4685/MUM/2023 Mocha Trading Pvt. Ltd. 6 BY ORDER, (Asstt. Registrar) ITAT, Mumbai