Vaishali Amit Kapasiyawala, L/H of Late Mrudulaben Pravinchandra Kapasiyawala, Surat V. ACIT, Circle-1(3), Surat

ITA 492/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0050 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-07-2024
• Assessment Year: misc
• Appeal Filed On: 25-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 68; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.492/SRT/2024 (Assessment Year: 2017-18) (Physical Hearing) Vaishali Amit Kapasiyawala, Legal Heir of Late Mrudulaben Pravinchandra Kapasiyawala, 8, Arham Bunglow, Khandwala Estate, Parle Point, Surat - 395007 Vs. The ACIT, Circle – 1(3), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ADPPK7282L (Appellant) (Respondent) Appellant by Shri P. M. Jagasheth, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 24/07/2024 Date of Pronouncement 14/08/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee, emanates from the order passed under section 250 of the Income-tax Act [in short, ‘the Act’] of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘the CIT(A)/NFAC’], dated 26.02.2024 for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as follow: “1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs.1,25,00,000/- on account of alleged cash deposited in bank account from alleged cash receipts shown as other income in the Return of Income treated as characterized as alleged unexplained income u/s.68 of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in 2 ITA No.492/SRT/2024 Vaishali Amit Kapasiyawala confirming the action of the Assessing Officer in applying higher tax rate with retrospective the provisions of section 115BBE of Income Tax Act, 1961. 3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO. 4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penalty u/s.271AAC of the Income Tax Act, 1961. 5. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper. 6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 3. The facts of the case in brief are that the assessee has filed return of income for the year under consideration on 15.12.2017, declaring total income of Rs.1,90,14,120/-. The case of the assessee was selected under limited scrutiny for the examination of large cash deposit during demonetization. During the course of assessment proceedings, it was informed that the assessee is no more. The assessee expired on 14.02.2018. The AO issued notice u/s 292B to the legal heir of the assessee which was uploaded on ITBA on 25.10.2019, thereby validating the notice issued u/s 143(2) of the Act. The AO has mentioned in the beginning of the assessment order that the order was passed in the name of the legal heir / representative of the assessee as per the ‘Pedinamu’ uploaded on 20.08.2019. The assessee’s case was a limited scrutiny matter with flagged issue of cash deposits during demonetization. Accordingly, a show cause notice was issued to the assessee based on specific findings and calling for specific details and explanations 3 ITA No.492/SRT/2024 Vaishali Amit Kapasiyawala from the assessee. During the demonetization period, the assessee had deposited of Rs.1,25,00,000/- in UCO Bank. The assessee filed details as required by the AO but the source and the nature of the sums credited were not explained by the assessee. The same was recharacterized as unexplained income u/s 68 of the Act by the AO. The AO has computed total income of assessee Rs.1,90,14,120/- by treating Rs.1,25,00,000/- as unexplained income u/s 68 of the Act. Penalty proceedings were also initiated u/s 271AAC of the Act. 4. Aggrieved, the assessee filed appeal before the Ld. CIT(A). Despite of issuance of four notices by Ld. CIT(A), the assessee did not respond to the notices. Thereafter, Ld. CIT(A) observed that assessee was not vigilant and proceeded to decide the appeal based on material available on record. The Ld. CIT(A) has stated at para 5 of the appellate order that there was delay of 28 days in filing the appeal. The assessee had not filed any reason for the delay nor filed any application for condonation of delay. As per Section 249(2) of the Act, the appeal should be presented within the 30 days of service of the notice of the demand. The Ld. CIT(A) may admit belated appeal if sufficient cause is shown by the applicant. In case of the assessee, no sufficient cause was given for delay of 28 days. Therefore, even the preliminary onus to establish the existence of sufficient cause has not been discharged. In view of the above appeal was not admitted and it was treated as dismissed. 5. At the outset, Learned Authorized Representative (Ld. AR) of the assessee assailed the impugned order by contending the legal heir of the assessee could not 4 ITA No.492/SRT/2024 Vaishali Amit Kapasiyawala represent his case before Ld. CIT(A) because the assessee expired on 14.02.2018. To persue the appeal, the legal heir had to sign all documents. The ITBA took some time to accept the signature of the legal heir; hence there was delay in filing the appeal which in any case is very small, i.e. 28 days only. Therefore, the Ld. CIT(A) should have condoned the delay and decided the case on merit. Since, adequate opportunity of hearing was not given to the assessee, it is a clear case of violation of principles of natural justice. The Ld. AR submits that during the appellate proceedings, the assessee could not appear before the Ld. CIT(A) due to circumstances beyond its control. Therefore, Ld. AR contended that in the interest of justice, one more opportunity should be given to the assessee to plead his case before the Ld. CIT(A). 6. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) submitted that assessee was negligent during the appellate proceedings; hence, appeal of the assessee should be dismissed. 7. We have heard both the parties. It is an undisputed fact that the assessee expired on 14.02.2018. The Legal heir had to pursue the case before the Ld. CIT(A). The Ld. AR submitted that the non-compliance was neither deliberate nor intentional. He requested for one more opportunity in the interest of justice and fair play. We find that legal heir of assessee could not plead his case properly before the Ld. CIT(A). We also note that Ld. CIT(A) has not admitted the appeal due to delay in filing of appeal as well as non-compliance by the assessee before him. The Ld. AR stated that one more opportunity of hearing may be given to him for 5 ITA No.492/SRT/2024 Vaishali Amit Kapasiyawala presenting his case properly. We are of the view that one more opportunity should be given to the assessee to plead his case. It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving deeper into the merits of the case, in the interest of justice, we set aside the order of Ld. CIT(A) and restore the matter back to the file of Assessing Officer for de novo adjudication and to pass a speaking order after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to be vigilant and furnish explanation and submit relevant details and documents before the CIT(A). For statistical purposes, the appeal of the assessee is treated as allowed. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 14/08/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 14/08/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File // TRUE COPY // By Order Assistant Registrar/Sr. PS/PS ITAT, Surat