SHAILABEN SANJAYBHAI DESAI, SURAT V. THE INCOMETAX OFFICER WARD -1(3) (5) SURAT, SURAT

ITA 9/SRT/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7182 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 03-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Opportunity of being heard; Transactions in derivatives; Set aside
• Section: 68; 69; 148; 271(1)(c); 142(1); 133(6); 250

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.09/SRT/2024 Assessment Year: (2011-12) (Physical court Hearing) Shailaben Sanjaybhai Desai, 43, Narmad Nagar, Athwalines, Surat-395007 Vs. Income Tax Officer, Ward–1(3) Surat, Income Tax Office, Room No.207, Anavil Business Centre, Nr. Adajan BRTS Bus Stand, Adajan Hazira Road, Surat-395009 èथायीलेखासं./जीआइआरसं./PAN/GIR No: ADWPD 3881 H (अपीलाथŎ/Appellant) (ŮȑथŎ /Respondent) िनधाŊįरती की ओर से /Appellant by Shri Hiren R. Vepari, CA राजˢ की ओर से /Respondent by Shri Vinod Kumar, Sr. DR अपील पंजीकरण/Appeal instituted on 04.01.2024 सुनवाई की तारीख/Date of Hearing 01.05.2024 उद ् घोषणा की तारीख/Date of Pronouncement 16.05.2024 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, 1961 (in short, ‘the Act’) dated 07.11.2023 by the learned Commissioner of Income Tax (Appeals), [in short, ‘Ld. CIT(A)’] /National Faceless Appeal Centre (in short ‘NFAC’), Delhi, for the Assessment Year (AY) 2011-12. Grounds of appeal raised by the assessee are as under: “(I) Ex-parte order: The learned CIT(A) was not justified in passing the ex-parte order. (II) Reopening: The learned CIT(A) did not deal with the grounds on reopening. (III) Addition of Rs.45,00,000: 2 IAT No.09/SRT/2024/ AY.11-12 Shailaben S Desai (1) The learned CIT(A) was not justified in confirming addition of Rs.45,00,000 to the total income of the appellant particularly when the time deposit made with the Surat People’s Co-op. Bank Ltd. was only of Rs.15,00,000 and that too was made out of maturity of old deposits. (2) On the facts and circumstances of the case, the addition is required to be deleted. (IV) Addition of Rs.12,60,000: (1) The learned CIT(A) was not justified in confirming addition of Rs.12,60,000 particularly when Rs.4,12,000 did not pertain to the appellant while the appellant clearly proved the source of cash deposit of balance Rs.8,48,000. (2) On the facts and circumstances of the case, the addition is required to be deleted. (V) Addition of Rs.1,93,690: (1) The appellant submits that she denies having earned any such income. Despite specific request, the AO chose not to part with the information making the appellant handicapped in providing explanation, if any. (2) The addition having been made without any information to the appellant, it is required to be deleted. (3) On the facts and circumstances of the case, the addition is required to be deleted. (VI) Addition of Rs.4,31,762: (1) The appellant submits that she denies having earned any such income. Despite specific request, the AO chose not to part with the information making the appellant handicapped in providing explanation, if any. (2) The addition having been made without any information to the appellant, it is required to be deleted. (3) On the facts and circumstances of the case, the addition is required to be deleted. (VII) Miscellaneous: (1) All of the above grounds are prejudice to one another. (2) The appellant craves leave to add, alter or vary any of the grounds of appeal.” 2. The facts of the case in brief are that the assessee has not filed return of income for the AY.2011-12. As per information in the NMS module the assessee had sold immovable property of Rs.1,00,70,000/-, time deposits of Rs.15,00,000/-, interest income of Rs.1,93,690/- and commodity transactions of Rs.53,97,032/- during the year under consideration. Therefore, the AO 3 IAT No.09/SRT/2024/ AY.11-12 Shailaben S Desai reopened the assessment by issuing notice u/s 148 of the Act on 28.03.2018, which was duly served upon the assessee. The assessee has not complied with the permitted time. Thereafter, a notice u/s 142(1) r.w.s. 129 of the Act was issued on 10.07.2018 asking assessee to furnish details within seven days. The assessee again failed to comply with the above notices. Thereafter, further notice u/s 142(1) of the Act was issued upon assessee on 19.09.2018 but assessee again failed to comply. The AO conducted third party enquiries by issuing notices u/s 133(6) of the Act calling for various information. A final show-cause notice was issued on 19.11.2018. The reply filed by assessee in response to above show-cause notice was found to be partly acceptable. The assessee in support of her claim furnished copy of purchase deed of immovable property sold during the year under consideration. The AO noticed that immovable property pertains to partnership firm, M/s Sanjay Twisters and name of assessee was as a partner and as signing authority. Therefore, no addition on account of sale of immovable property was being made. The AO further noticed that assessee made three deposits of Rs.15,00,000/- each with the Surat Peoples Co-Op. Bank Ltd. However, assessee failed to furnish any details to explain the source of time deposits. The AO treated such investments as unexplained and made addition of Rs.45,00,000/- to the total income of assessee u/s 69 of the Act. 2.1 During the assessment proceedings, it was found that the assessee made cash deposits of Rs.12,60,000/- in her bank account during the year 4 IAT No.09/SRT/2024/ AY.11-12 Shailaben S Desai under consideration. The AO issued show-cause notice on 19.11.2018 as to why said cash deposits should not be added to the total income of the assessee. In response thereto, assessee furnished explanation that cash belonged to her partnership firm; some amount was in her OD account and some cash had been withdrawn earlier and remained unutilized. However, assessee failed to furnish proper explanation about the nature and source of cash deposited. Therefore, AO made addition of cash deposit of Rs.12,60,000/- as unexplained investment u/s 68 of the Act. 2.2 During assessment proceedings, it was also noticed that assessee had received interest income of Rs.1,93,690/- but she failed to offer it for taxation by failure to file ITR. Therefore, AO issued show-cause notice dated 19.11.2018. In response, assessee submitted that above interest income would be included in total income of the assessee. The AO treated the same to the income of assessee as undisclosed interest income. 2.3 The AO noticed that assessee had entered into commodity transaction of Rs.53,97,032/- during the year under consideration. The assessee had not offered any profit from above commodity transaction. As the assessee failed to offer any profit from such commodity transaction addition of Rs.4,31,762/-, being 8% of Rs.53,97,032/- was made to the total income of assessee as undisclosed profit. The total income was accordingly determined at Rs.63,85,452/-. The AO initiated penalty proceedings u/s 271(1)(c) of the Act for all these additions. 5 IAT No.09/SRT/2024/ AY.11-12 Shailaben S Desai 3. Aggrieved by the order of AO, appellant filed appeal before Ld.CIT(A). On merit the Ld.CIT(A) sustained the additions made by the AO by stating that though the appellant has challenged the addition, she has not submitted any evidence or counter agreement in respect of her claim. He observed that despite repeated opportunities, the appellant did not attend to substantiate her claim before AO. In absence of details and evidence, the action of AO was upheld by Ld.CIT(A). Further aggrieved by the order of Ld.CIT(A), the assessee has filed present appeal before the Tribunal. 4. The Ld. AR strongly contested the additions made by AO and confirmed by the Ld.CIT(A). He relied on the grounds raised by the appellant and argued that without examining details, the assessment order has been erroneously passed casting a heavy burden on the assessee. He, therefore, requested that one more opportunity may be given to the assessee to plead her case before Assessing Officer. 5. On the other hand, Learned Senior-DR for the Revenue supported the orders of lower authorities. However, he does not have any objection if the matter is remitted back to the file of Assessing Officer for fresh assessment. 6. We have heard both parties and considered the facts of the case. We note that NFAC/Ld. CIT(A) has not passed the order on merits and has 6 IAT No.09/SRT/2024/ AY.11-12 Shailaben S Desai dismissed the appeal ex parte due to non-compliance. We find that the case has not been decided after due consideration of the details and evidence filed by the assessee. The Ld.CIT(A) has dismissed the appeal both on the ground of non-compliance as well as on merit. We therefore, deem it proper to restore the matter back to the file of AO to consider the submissions of assessee including the details furnished before us. It is settled law that the principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to present its case. Accordingly, we set aside the order of NFAC/Ld. CIT(A) and restore the issue back to the file of the Assessing Officer for de novo assessment. We also direct the assessee to provide relevant documents and explanation before the Assessing Officer, as and when required by him and assessee shall co-operate in the proceedings before the Assessing Officer for early disposal of its case. For statistical purposes, the appeal of the assessee is treated as allowed. 7. In the result, appeal of the assessee is treated allowed for statistical purposes. Order is pronounced on 16/05/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER सूरत / Surat िदनांक/ Date: 16/05/2024 Dkp Outsourcing Sr.PS 7 IAT No.09/SRT/2024/ AY.11-12 Shailaben S Desai 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