RAYOMAND ADIL SHETHNA, SURAT V. Assistant Commissioner of Income Tax, Circle-2(1)(1), Surat, Surat

ITA 736/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2626 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 24-10-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 736/Srt/2023 (Assessment Year: 2018-19) (Physical hearing) Rayomand Adil Shethna, 12/1134, Vanki Bordi, Shahpore, Surat-395003. PAN No. ACRPS 0191 F Vs. N.F.A.C., Delhi. Appellant/ Assessee Respondent/ Revenue Assessee represented by Ms. Richa Tosniwal, C.A. Department represented by Shri Vinod Kumar, Sr.DR Appeal instituted on 26/10/2023 Date of hearing 24/04/2024 Date of pronouncement 30/04/2024 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 29/08/2023 for the Assessment Year (AY) 2018-19. Following grounds of appeal have been raised by the assessee. “1. Because the ld. CIT(A) order was bad in law as per the facts of the case. 2. Because the ld. CIT(A) sustained the order of A.O. imposing penalty u/s 271AAC(1) of Income Tax Act, 1961. 3. That the appellant/assessee craves for a leave to add, alter and amend any grounds of appeal at the time of appellate hearing.” 2. Rival submissions of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that while passing the assessment order, the Assessing Officer besides other additions, made addition under Section 69A of the Income Tax Act, 1961 (in short, the ITA No. 736/Srt/2023 Rayomand Adil Shethna Vs NFAC 2 Act) on account of unexplained cash deposit of Rs. 23,72,800/- and taxed the same @ 60% under Section 115BBE of the Act. The Assessing Officer also proposed penalty under Section 271AAC(1) of the Act. The Assessing Officer levied penalty of Rs. 1,46,640/- under Section 271AAC (1) of the Act being 10% of tax of Rs. 14,66,390/-. The ld. CIT(A) confirmed the penalty vide impugned order dated 28/09/2023. The ld. AR of the assessee submits that the assessee could not file reply to the show cause notice of penalty before Assessing Officer as it was a Nationwide severe COVID pandemic period, nor could file submission before the ld. CIT(A) due to proper notice. The assessee has good case on merit and is likely to succeed if one more opportunity is given to the assessee to explain reasonable and sufficient cause for not levying the penalty under Section 271AAC of the Act. The ld. AR of the assessee submits that she undertakes on behalf of assessee to be more vigilant in future in making timely compliance. The addition by Assessing Officer was also made on account of non-compliance with regard to deposits in the bank account. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr.DR) for the revenue submits that the assessee has not shown reasonable and sufficient cause for non-compliance either during the assessment or during the penalty proceedings or before the ld. CIT(A). The assessee does not deserve any second round of litigation without disclosing a reasonable and sufficient cause. 4. We have considered the submissions of both the parties and have gone through the orders of the lower authorities carefully. We find that the ld. AR of the assessee has fairly made her submission that addition in the assessment order ITA No. 736/Srt/2023 Rayomand Adil Shethna Vs NFAC 3 under Section 69A of the Act of Rs. 23,72,800/- was made on account of non- compliance. The Assessing Officer while making addition under Section 69A of the Act taxed such addition under Section 115BBE of the Act i.e. @ 60% + 3% higher education cess thereby created a demand of tax on such addition of Rs. 14,66,390/-. The Assessing Officer levied penalty under Section 271AAC of the Act @ 10% of the tax liability on addition under Section 69 of the Act. We find that before passing the order, the Assessing Officer issued show cause notice dated 04/10/2021, 23/07/2021 and 15/09/2021. The Assessing Officer recorded that the assessee failed to respond such notice and ultimately levied penalty @ 10% of tax payable on the addition under Section 69A of the Act. On appeal before the ld. CIT(A), the action of Assessing Officer was upheld in an ex parte order. We find that the lower authorities passed the order for want of compliance. Considering the facts that at the time of hearing in penalty proceedings it was a COVID pandemic period. The ld CIT(A) also confirmed the order of penalty for want of submissions. Now before us, the ld AR for the assessee prayed that one more opportunity may be allowed to explained the show cause notice of penalty. We find that valuable rights of assessee are involved in the present appeal, thus, keeping in view the principles of natural justice, the matter is restored back to the file of Assessing Officer to pass the penalty order afresh after giving reasonable and fair opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and not to cause further delay by seeking adjournment without any valid reason and to furnish all the details and his submissions and evidences on various grounds of appeal raised, as soon as possible, without any further delay. In the ITA No. 736/Srt/2023 Rayomand Adil Shethna Vs NFAC 4 result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 5. In the result, this appeal of assessee is allowed for statistical purposes only. Order announced in open court on 30 th April, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 30/04/2024 *Ranjan Copy to: 1. Assessee 2. Revenue 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat