Appeal details
Counselvise Citation
[2024] 100 COUNSELVISE.COM (IT) 1270 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-07-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
04-06-2024
Assessment Year
2012-2013
Appeal Filed On
10-12-2023
Judgement Text
IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.855/SRT/2023 AY: (2012-13) (Hybrid process) M/s Royal Diamond C/o Ketan H. Shah, Advocate, 512, Times Squre-1, Opp. Ram Baug Bungalow, Thaltej Shilaj Road, Thaltej, Ahmedabad- 398059 Vs. Income Tax Officer Ward-2(3)(8), Surat, èथायीलेखासं./जीआइआरसं./PAN/GIR No: AANFR 1748 R (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Assessee by Shri Ketan Shah, AR & Shri Aman K Shah, AR राजˢ की ओर से /Revenue by Shri Ravi Kant Gupta, CIT(DR) सुनवाई की तारीख/Date of Hearing 05/06/2024 उद्घोषणा की तारीख/Date of Pronouncement 02/07/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanate from the orders passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) by the Learned Commissioner of Income Tax (Appeals) (in short, “CIT(A) / National Faceless Appeal Centre, Delhi (in short, ‘CIT(A)’, vide order dated 14.07.2023 for assessment year (AY) 2012-13. Grounds of appeal raised by the assessee are as under: “1. The Learned AO has erred in not appreciating the fact that the earlier 143(3) order has been passed on 24-03-2015 after due inquiry with the disputed parties and therefore, it is amounts to change of opinion in the present 148 proceedings initiated on 30-03-2019 and therefore, the same is liable to be quashed. 2 ITA No. 855/SRT/2023 /AY 12-13 M/s Royal Diamond 2. The Learned AO has erred in not appreciating the fact that the so-called approval of Pr.CIT mentioned in 148 notice dated 30-03-2019 has not been provided and therefore, the present proceeding is bad in law and void. 3. The Learned AO has erred in not appreciating the fact that the copy of the reason recorded is dated 22-05-2019 whereas, the 148 notices is dated 30.03.2019 and therefore, there is clear violation of the provision of Section 148(2) and such the same is liable to be quashed. 4. The Learned AO has erred in not appreciating the fact that the so-called notice u/s 148 has not been issued on 30-03-2019 for the AY 2012-13 (issued on last day of ending of 6 years) and therefore, the same has not been served within time limit and as such the proceeding is bad in law. 5. The Learned AO has erred in not appreciating the fact that there is no such copy of the approval of Pr.CIT u/s 151 has been provided and therefore, the present proceeding is bad in law and void. 6. The Learned AO has also erred in not appreciating the fact that the assessee’s books are duly audited and no such Section 145 has been applied nor the books have been rejected and therefore, there is no question of making any addition. 7. The Learned AO has erred in not appreciating the fact that the Assessing Officer has grossly erred in providing complete statement of Bhanwarlal Jain as well as the inquiry made with the disputed parties and no cross- examination has been allowed even though asked for and therefore, the present proceeding is liable to be quashed. 8. The Learned AO has erred in not appreciating the fact that the assessee’s books of accounts are duly audited and the disputed party’s books are also duly audited and assessed to tax and therefore, in any case, there is no justification for making any addition in the case of present assessee. 9. The Learned AO has erred in not appreciating the fact that th9e assessee has provided complete confirmation of all the disputed parties for the purchase value of Rs.15,61,29,568/- and the payment had been made through the banking channel and therefore, the assessee has discharged the onus and as such there is no question of making any addition. 10. The CIT(A)/NFAC has also erred in not providing reasonable opportunity of hearing and even has not considered the submissions made as abstracted by the Assessing Officer in the body of the order and therefore it is prayed that, the order passed by CIT(A) is in violation of rule of natural justice and therefore, liable to be set aside.” 3 ITA No. 855/SRT/2023 /AY 12-13 M/s Royal Diamond 2. Perusal of record shows that there is delay of 24 days in filing appeal before Tribunal. The assessee has filed affidavit giving reasons for delay in filing of appeal before the Tribunal. In the affidavit, it has been stated that minor delay was occurred due to time taken for engaging the advocate either from Surat or from Ahmedabad and discussion was going on for which minor delay occurred. The Ld. Authorized Representative (Ld.AR) has requested to condone the delay in filing appeal in the interest of justice. The Ld.AR submitted that delay of 24 days was caused for preparation of appeal and it was neither deliberate nor intentional. 3. On the other hand, Learned Departmental-Representative (Ld.CIT-DR) for the Revenue has not opposed the delay in filing appeal before the Tribunal. 4. We have considered the reasons given by the Ld. AR and perused the accompanied application. We find that the delay of 24 days in filing appeal was neither deliberate nor intentional on the part of assesse. Therefore, considering the fact that assessee is not going to benefitted by filing appeal belatedly and further considering the fact that when technical consideration and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred, the delay in filing the appeal is condoned. Now let us advert to the merits of the case. 5. The facts of the case in brief are that the assessee-firm is engaged in the business of export, import and trading in diamond. The appellant filed its return of income for AY.2012-13 on 05.09.2012 declaring total income of 4 ITA No. 855/SRT/2023 /AY 12-13 M/s Royal Diamond Rs.2,25,815/-. Subsequently, case was selected under CASS on 24.03.2015. Information was received from Investigation Wing, Mumbai that a search and seizure action was carried out by the Investigation Wing, Mumbai on 03.10.2013 in case of Shri Bhanwarlal Jain and his group concerned who provided accommodation entries of bogus purchases, sales and unaccounted loans to various parties. The assessee was a beneficiary of such group and it had shown bogus purchase of Rs.15,61,29,598/- from 9 parties of Shri Banwarlal Jain group. The AO issued show-cause notice and notice u/s 142(1) of the Act on 03.11.2019. In response thereto, appellant filed reply dated 11.11.2019 regarding purchase of Rs.15,61,29,598/- and urged that it should not be added to total income of assessee as assessee has purchased the goods from parties through its director and assessee was not aware in what capacity of Shri Bhanwarlal Jain is connected to parties. In this regard assessee relied on various case law and filed tax invoice, stock register, bank statements and books of account of party concerned. The assessee invited the ratio laid down in Section 106 of the Indian Evidence Act, 1862. The explanation of assessee was not accepted by AO. The AO rejected the books of account u/s 145(3) of the Act and treated the above bogus purchase as accommodation entry to the tune of Rs.15,61,29,598/-. He added it to the total income of the assessee and assessed total income at Rs.15,63,77,620/-. The AO was also initiated penalty proceedings u/s 271(1)(c) of the Act. 5 ITA No. 855/SRT/2023 /AY 12-13 M/s Royal Diamond 6. Aggrieved by this order of the AO, the assessee filed appeal before Ld.CIT(A). The Ld.CIT(A) has passed ex pate order after issuing various notices upon assessee, which were not complied with. He has merely dismissed appeal for non-prosecution and has not decided the case on merit. Hence, grounds of assessee was dismissed. 7. The Ld. AR of the assessee strongly objected the order of lower authorities. He filed paper book which contains pagers 1 to 152 containing various case law. He argued that Ld.CIT(A) passed an ex parte order without giving reasonable and sufficient opportunity of being heard. His order is also not as per mandate of Section 250(6) of the Act. 8. On the other hand, Learned CIT-DR for the Revenue relied on the order of Ld.CIT(A) and argued that the AO has initiated the reassessment proceedings based on credible information. He has followed the due procedure of law and issued the notice u/s 148 of the Act after receiving sanction u/s 151 of the Act from the Competent Authority under the Act. The Ld.Sr-DR for the Revenue submits that Ld. CIT(A) issued several notices to assessee but assessee failed to availed such opportunities. It is duty of assessee to file complete details on the date of hearing or within reasonable time in a faceless regime. He requested to confirm order of Ld.CIT(A). 6 ITA No. 855/SRT/2023 /AY 12-13 M/s Royal Diamond 9. We have heard the rival submissions and perused the materials on record. We have also gone through the decisions relied upon by the parties. The Ld. AR has argued that both AO and Ld.CIT(A) have passed order without giving reasonable and sufficient opportunities of being heard to assessee. AO made the addition on bogus purchases. The Ld.CIT(A) dismissed appeal by passing a cryptic order without discussing merits of the case. We find that impugned order passed by the Ld.CIT(A) is clearly violative of the express provisions of Section 250(6) of the Act, which provides that the appellate orders of the Ld.CIT(A) are to state the points arising in the appeal, the decision of the authority thereon and the reasons for such decisions. The underlying rationale of the provision is that such orders are subject to further appeal to the appellate Tribunal. Speaking order would obviously enable a party to know precise points decided in his favour or against him. Considering the facts and circumstances of the case and the submission of Ld.AR for the assessee that the Assessing Office made addition for the want of evidence, which was confirmed by Ld.CIT(A) in ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest his case on merit. Considering all the facts, in the interest of justice, we remit the matter back to the file of Ld.CIT(A) with a direction to pass order in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is directed to be vigilant and to furnish all details and explanation as needed by Ld.CIT(A) by not seeking adjournment without valid reason. With this direction, 7 ITA No. 855/SRT/2023 /AY 12-13 M/s Royal Diamond the grounds of appeal raised by the assessee is treated as allowed for statistical purposes. 10. In the result, appeal filed by the assessee is allowed for statistical purposes. Order is pronounced on 02/07/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER स ू रत /Surat Ǒदनांक/ Date: 02/07/2024 Dkp Outsourcing Sr.PS 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 By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat
