Raidhanbhai Jivabhai Basiya, Surat V. Income Tax Officer, Ward-3(2)(3), Surat

ITA 757/SRT/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8532 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-02-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 05-11-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Principle of natural justice; Rule 8D; Set aside
• Section: 68; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 757/Srt/2023 (AY: 2013-14) (Physical hearing) Raidhanbhai Jivabhai Basiya, 8, Rugved Bunglow, TP 32, Adajan, Surat-395009 (Gujarat). PAN No. ABAPB 3099 H Vs. I.T.O., Ward-3(2)(3), Room No. 417, 4 th Floor, Aaykar Bhawan, Majura Gate, Surat. Appellant/ assessee Respondent/ revenue Assessee represented by Shri P M Jagasheth, C.A. Department represented by Shri Vinod Kumar, Sr. DR Date of institution of appeal 06/11/2023 Date of hearing 22/02/2024 Date of pronouncement 23/02/2024 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 National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals) [in short, the ld. CIT(A)] dated 12/09/2023 for the Assessment Year (AY) 2013-14. The assessee has raised following grounds of appeal: “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.2,81,919/- on account of disallowance of interest expenses u/s. 14A of the Act read with rule 8D. 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 confirming the action of the Assessing Officer in making addition of ITA No.757/Srt/2023 Raidhanbhai Jivabhai Basiya Vs ITO 2 Rs.27,97,000/- on account of cash deposited in bank account treated as unexplained cash credit u/s.68 of the 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. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.” 2. Rival submission of both the parties have been heard and record perused. The learned Authorised Representative (ld. AR) of the assessee submits that the ld. CIT(A) passed the ex parte without giving fair and reasonable opportunity to the assessee. The ld. CIT(A) confirmed the finding of Assessing Officer in a non-speaking order, which is not in consonance with the mandate of Section 250(6) of the Income Tax Act, 1961. The ld AR for the assessee submits that in Form-35 while filing appeal before the ld. CIT(A), the assessee has given e-mail address, however, such e- mail address of his consultant who has not informed the assessee in time. The ld. AR of the assessee submits that even before the Assessing Officer, the assesse could not make compliance in time, though the assessment order is passed under section 143(3), however, facts remained the same that addition is made due to non-compliance by assessee. The ld AR for the assessee prayed that the assessee has good case on merit and is likely to succeed if the matter may be restored back to the file of Assessing Officer to decide it afresh on merit after giving opportunity to ITA No.757/Srt/2023 Raidhanbhai Jivabhai Basiya Vs ITO 3 the assessee. The ld AR for the assessee submits that he undertakes on behalf of the assessee to be more vigilant in future in making timely compliance to the notice issued by the lower authorities. 3. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that the assessee was given ample opportunity by the lower authorities, it is the assessee who has not availed such opportunity, therefore, even on merit, the assessee is not eligible for any relief. 4. We have considered the submissions of both the parties and perused material available on record. We find that the Assessing Officer made various additions on account of disallowance of interest expenses under Section 14A of the Income Tax Act, 1961 with Rule 8D of the IT Rules of Rs. 2,81,919 and Rs. 27,97,000/- on account of cash deposited in bank account treated as unexplained cash credit under Section 68 of the Act. The assessing officer while making addition held that despite giving opportunity to the assessee, no compliance was made. The action of Assessing Officer was upheld by the ld. CIT(A) in ex parte proceedings by not following the mandate of Section 250(6) of the Act. We are of the view that the substantial right of assessee is involved in the present appeal, therefore, keeping in view the principle of natural justice, the assessee is giving one more opportunity to explain the case on merit. Considering the facts the impugned order is passed ex-parte and without discussing the merits of the case as mandated by section 250(6) of the ITA No.757/Srt/2023 Raidhanbhai Jivabhai Basiya Vs ITO 4 Act, and the fact that the assessing officer also made addition for the want of compliance, therefore, we deem it appropriate to restore the issue back to the file of Assessing Officer to decide all the issue afresh in accordance with law. Needless to direct that before passing the order, the Assessing Officer shall grant opportunity of hearing to the assessee. The assessee is also directed to be more vigilant in future and not to cause further delay and seek adjournment without any valid reason and to furnish all the details and his submissions and evidences on various grounds of appeal raised by him, as soon as possible, if so desired without any further delay. In the 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 pronounced in the open court on 23 rd February, 2024. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 23/02/2024 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT 4. DR By order 5. Guard File Sr. Private Secretary, ITAT, Surat